Big Taxes, Slow Sewer Pipes Result From Cali Drought Mandate

California regulators extended mandatory water usage cuts in February as the five-year drought continues to afflict more than 60 percent of the state.

The policy has been effective at compelling Californians to conserve. But it has also had unintended consequences. As The Washington Post recently put it, “No good deed goes unpunished.”

Two of the least-discussed drawbacks of the cuts and other drought policies: sluggish sewer lines and tax hikes.

The sewer line problem: “As customers cut back on the length of their showers, the number of times they flushed their toilets, and the clothes and dishes they washed, they lowered the outflow of water needed to push waste through sewage tunnels. The nation’s outdated sewers were designed to receive about 120 gallons per household per day to shove wastewater through the systems,” the Post reported.

George Tchobanoglous, professor emeritus of environmental engineering at the University of California, said the flow has dropped to 50 gallons. The problem can result in foul odors and corroded pipes.

“You have solids that you flush and there’s not enough water to carry the material,” he said. “When the city says buy low-flush toilets because we all want to save water and save the world, no one can resist. But no one thinks about the consequences. It really is a double-edged sword.”

Tax hikes are another problem for Californians under Brown’s conservation policies.

“When the governor urged homeowners to rip out their lawns, he offered them a carrot: tax-free state rebates of up to $2,000 to help pay for replacement desert-themed foliage,” the report said.

“But California water officials who forgave state taxes on the rebates overlooked a major potential drawback — federal taxes. Now the Internal Revenue Service is preparing to tax the rebates as income, a move that could bring a key water conservation program to a halt,” the report continued.

As of February, the state provided $22 million in rebates to homeowners who replaced grass turf with mulch and drought-resistant plants. But residents like Tina House of Pasadena, who had the grass pulled out of her yard, are realizing the policy also creates a tax burden. The tax bill from her rebate is $1,400.

“You say $4,400 — oh, that’s a big chunk of change,” House said, per the Post. “Nowhere did it mention that we can possibly be on the hook for taxes. My gardener said, ‘Okay, we’re going to do this.’ The next day, my girlfriend [who did the same] calls me and says, ‘Oh my God, we’re going to have to pay taxes on this.’”

State officials and utility managers “thought rebates for water efficiency would be treated the same as energy-efficiency rebates, which the IRS doesn’t tax. But the IRS told the officials and members of the state’s unhappy congressional delegation that they were wrong,” the Post reported.

For utilities, a top drawback to usage cuts is revenue loss.

“Utilities that deliver the water to cities lost more than half a billion dollars over the last eight months as customers cut back,” the Post reported, citing the State Water Resources Control Board.

“Those revenue dips, which are projected to continue through October because of the board’s extension of the water-saving measures, probably will result in rate increases for at least some customers,” the report said.

For more news on the unexpected consequences of drought measures, visit Water Online’s Water Scarcity Solutions Center.