Published: April 23, 2008
By Craig Johnson
The House Tax Committee was scheduled to hear a bill on Monday that would establish a new tax on water in the 11-county metropolitan area. HF 3590 (Rep. Jean Wagenius, DFL, Minneapolis) raises .0002 cents per gallon as a fee on groundwater used in the counties of Anoka, Carver, Chisago, Dakota, Hennepin, Isanti, Ramsey, Scott, Sherburne, Washington, and Wright.
The tax would be collected by municipal water utilities in that area and then would be passed through to the state for groundwater monitoring expenses statewide.
This bill raises several concerns for the League of Minnesota Cities (LMC), including the following:
Senate budget proposals already raise existing water use fees for city water systems by $.50 per million gallons this year, increasing that fee to a total amount ranging from $3.50 to $8.00 per million gallons of water, depending on the size of the utility. That money goes to the state general fund. This proposal would create a new tax of $2.00 per million gallons in addition to that existing fee.
The money would be raised only from communities and businesses using groundwater for their water supplies and only from ones in the metropolitan area. The funds would then be transferred to the state for monitoring groundwater anywhere in the state.
This proposal does not apply to agricultural groundwater users or residential or industrial users that are not connected to a metered public water supply. Metropolitan municipal water utility customers, however, would be the ones paying to monitor water around the state, mostly to watch for potential agricultural and industrial contaminants.
Heavy use of surface water resources by industry, utilities, and other water users can dramatically affect groundwater quantity and quality, yet those users are not included in this tax.
Some cities use a varying combination of surface water and groundwater for their water supplies, depending on demand and water supply issues. This tax could be extremely difficult to accurately set in those cases.
