Water Districts Considering Using Property Taxes to Pay for $25 Billion Delta Tunnels Without Public Vote

In order to help fund Governor Jerry Brown’s $25 billion Delta tunnel plan, California water districts are quietly considering the possibility of using property taxes. The possibility of districts raising property taxes without a vote to help fund the two massive tunnels is also a possibility.

Under California Proposition 13, any raises in property tax need to be approved by a two-thirds public vote. However, water agencies argue they are exempt from such a requirement. They contend that in 1959, a law that was passed that gives them the authority to raise property taxes. Since this law predates Proposition 13 (passed in 1978), they argue the earlier law should still stand.

The Santa Clara Valley Water District discussed raising property taxes from $36 a year to $60 a year over the next decade to help pay for the expenses in constructing the Delta tunnel project through the through the Sacramento-San Joaquin River Delta. They expect to pay $228 million between now and the project’s completion in 2024. 

"Because it was adopted by voters prior to that date, it doesn't qualify for the two-thirds requirement,” said Jim Fiedler, the district's chief operating officer about their ability to raise property taxes without a vote.

The Metropolitan Water District of Southern California is also looking into the agency’s ability to use property tax to pay its share of the cost for the tunnel project. However, general manager Jeff Kightlinger said that the region’s property tax rate would not be increased. He explained that the board has a policy to not raise property taxes. If they run into any issues paying for the project, they will raise water rates instead.

Nancy Vogel, a spokeswoman for the state Department of Water Resources, said that the department is “agnostic on the financing method,” and that they would not dictate how agencies pay for their share of the project. 

Read more about the water district’s plan here.