City Budget Troubles = Higher Water Bills?

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Dave Devine brings us a bulletin from yesterday's meeting of the finance subcommittee of the Citizens' Water Advisory Committee:

Tucson Water customers—including those who live outside the city limits—may soon see a bump in their water bills to help bail out City Hall’s financially strapped general fund.

As an enterprise utility, Tucson Water must generate enough revenue to pay its own expenses.

But as an agency of the city, the utility does not pay property tax on land and buildings owned by the company.

That may be about to change. At its Jan. 27 meeting, the finance subcommittee of the Citizens’ Water Advisory Committee (CWAC) recommended raising water rates substantially next year. This increase, in part, will be used to pay an in-lieu tax that would be imposed on the utility’s real property inside the city limits.

If that were done, approximately $1.6 million in new annual Tucson Water revenue would go to the city’s general fund beginning in July. That fund, which primarily pays for police, parks, and fire protection, is now projected to have a $23 million deficit before the City Council does more slashing in the next few months. Thus, if approved, the new in-lieu property tax would help the council bridge the shortfall.

The subcommittee wasn’t unanimous in its support for the new tax. Some members thought it unfair to ask Pima County residents and businesses, who aren’t aware of the proposal but who are Tucson Water customers, to help solve the city’s general fund budget woes. By a 5-2 vote, however, the majority went along with the staff proposal.

The revenue-raising idea will next be presented to the entire CWAC committee and then make its way to the Tucson City Council.

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