A bill to ensure that voters in a water or sewer district retain ultimate control over whether a city or town can assume jurisdiction of their district was signed into law this week by Gov. Jay Inslee.
“This law will give taxpayers the ability to insist that 100 percent of the taxes we pay for our water and sewer systems will be dedicated to providing the services and maintaining the system,” said 32nd District Sen. Maralyn Chase, D-Shoreline and the sponsor of Senate Bill 5048. “This can enable taxpayers to prevent cities or towns from taking control of their water-sewer districts and raising rates to pay for new other such as new developments or other non-water-sewer projects.”
SB 5048 lets voters call for a referendum on any attempt by a city or town to assume jurisdiction of all or part of a water or sewer district. As with other special-service districts such as fire districts or school districts, rate payer revenue must be spent solely for the purposes of the special service districts. Utility districts assess and adjust rates to provide for maintenance and service as necessary but may not assess additional taxes for the service.
However, if a city assumes ownership of a water or sewer district, the city may levy taxes without limits, without restrictions on what the funds are used for, and without a vote of the citizens who voted to create the district. Water and sewer districts are the only special service districts that do not have a cap on the taxes that can be levied if these districts are assumed by a municipality.
Utility taxes are among the most regressive taxes levied on citizens, Chase noted. Water and sewer are basic necessities and low-income rate payers have no choice in accepting or refusing service or paying the ever-increasing taxes. For example, low-income working families pay 17 percent of their income in taxes compared to wealthy families who pay only 2.8 percent.
“A year ago, the taxpayers of Shoreline saw their water district taken over and lost their ability to control what they pay and what their dollars are used for,” Chase said. “This new law will protect other communities from cities and towns that try to overreach.”