The Property Tax and Water Finance in Utah

Figure 1 Water Use in Utah by Category during 1995 Total Withdrawls: 4,459 mgd or 5 million acre-feet

Practical Economics of Water About 75% of Utah’s water is used to irrigate crops Crop production is 0.4% of Utah’s GSP Utah uses 75% of its water to produce 0.4% of GSP Water will not be a binding constraint to economic growth during the next 50 years

Figure 2 Water Use in the Greater Wasatch Counties by Category during 1995

Figure 3 M&I Water Use (1995) and Rates (1990) Dollars per 1,000 Gallons

Economic Theory and Water Increasing returns Public goods Second best

Figure 4 Property Tax Revenue by Type of Government during 1999 Total Property Tax: $1.35 Billion

Figure 5 Flow Chart of Water Delivery in the Salt Lake Valley

Figure 6 Sources of Revenue in the Wholesale Water System during 1999 Total Revenue: $149 Million

Figure 7 Property Tax Revenue during 1999 in the Five Largest Wholesale Water Districts

Distribution of Revenue Sources during 1999 in the Five Largest Wholesale Water Districts

Figure 8 Distribution of Property Tax for Water between Wholesale and Retail Water Utilities during 1999 Total Property Tax for Water: $58 million

Figure 9 Sources of Revenue in the Retail Water System during 1999 Total Revenue: $241 million

Figure 10 Property Taxes per Customer in the Five Largest Retail Water Systems during 1999

Sources of Revenue for the Water System Total Revenue: $390 Million

Distribution of Revenue Sources for Water Systems in Utah and California during 1999

7 Year Average of Charges as a Percent of Expenditures for Water Utilities in Western States 1993 to 1999

Charges as a Percent of Expenditures for Water Utilities in Utah from 1993 to 1999

Issues with Removing the Property Tax for Water Financial solvency of Central, Washington, Metro, and others Transitional funding for all water districts Increased debtservice cost and less ability to issue debt Legal exposure from tax covenant in revenue bonds