Southern California braces for water rate and tax hikes

Southern Californians will soon feel the pinch in their wallets as the Metropolitan Water District of Southern California (MWD) implements rate and property tax increases to address the state’s evolving water landscape. The hikes, effective over the next two years, come as California adapts to shifts in water supply and demand, exacerbated by climate change.

MWD Board Chairman Adan Ortega Jr. emphasized the need for the region to stabilize revenue amidst declining sales due to successful conservation efforts. “We’ve made up the revenue and stabilized the past rates with the reserves, and we can’t keep doing that,” Ortega explained.

Retail water suppliers and 26 cities relying on water delivered by the MWD face a rate increase of 8.5% in 2025 and another 8.5% in 2026, as per the district’s 38-member board decision. The property tax assessment in the six-county area of the MWD will also double, affecting the annual property tax bill for homes across Los Angeles and Orange Counties.

MWD’s General Manager Adel Hagekhalil stressed the difficult yet necessary action. “Our costs have risen while revenues have dropped, so we need to take the fiscally responsible step of adjusting our rates,” Hagekhalil said, attributing part of the revenue decline to the extraordinary drought from 2020 to 2022.

Despite the impending cost hikes, the budget includes $100 million set aside for conservation initiatives. Plus, recent budget cuts aim to minimize the need for even steeper rate increases. The MWD also plans to explore major long-term infrastructure investments aimed at future-proofing Southern California’s water resources.

However, not all board members align with the proposed financial adjustments. A group representing Los Angeles, including Carl E. Douglas, Matt Petersen, Nancy Sutley, Tracy Quinn, and Miguel Luna, abstained from the tax rate vote. A joint statement highlighted concerns that “shifting water bill collections onto property taxes will effectively raise the cost of housing for every citizen in the region, especially those in the disadvantaged communities.”

Conversely, Executive Director of LA Waterkeeper Bruce Reznik defended the decision to balance the tax increase with a smaller rate hike, insisting it’s a more equitable solution and enhances MWD’s potential to invest in sustainable water alternatives like local generation and storage methods.

The MWD’s strategy has garnered both support and objection from the community. Moorpark Mayor Chris Enegren called the rate surge “very problematic for our citizens” and questioned the management’s decision. Juan Garza, representing the Central Basin Municipal Water District, expressed his concerns about the need for strategic changes, admitting, “It’s not a perfect budget, but by no means is our future easy.”

Residents and businesses in Southern California are left to consider the implications of these fiscal decisions as they brace for the impact of the increasingly challenging water management landscape in the face of climate change.

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