Senate debates dedicating an eighth-cent sales tax to water projects; amendment would cap annual receipts and add sunset

Senators debated a substantial proposal to dedicate a slice of the sales tax to water and wastewater projects.

Senator Marine presented substitute SB 20, which would allocate an eighth of a percent of existing sales tax revenue to water development without adding a new tax. He explained the proposed split: 40% to projects managed by the Board of Water Resources, 30% to wastewater needs and 30% to safe drinking water projects. "This bill would take an eighth of a percent of the current sales tax... and dedicate that to the water development in the state," Marine said, and noted an amendment to sunset the program in 1996 and cap annual receipts at $12,000,000 (the full eighth-percent was estimated at approximately $19,500,000 under current collections).

Floor debate focused heavily on fiscal policy: several senators warned that earmarking current sales tax revenue reduces legislative flexibility and could erode funds for higher education, children's programs and human services. One senator argued that sunset clauses historically tend to be extended repeatedly: "Sunset date on this would be the same thing as you well know," a senator said. Another described earmarking as "bad tax policy" that could create a precedent for perpetual dedicated funding streams.

Supporters argued the measure would create a predictable funding stream for ready-to-go water projects and avoid the interest costs of bonding. The amendment to limit annual receipts and include a sunset passed on the floor, and discussion was left open with the chamber saying the matter required further work.