In drought-plagued western states, the idea of repealing property taxes that flow to water districts has been catching on, as illustrated by a recent report by the Utah Foundation, titled “Flowing Toward 2050: Utah’s Water Outlook.” The report argues that cheap water, subsidized by property taxes, is the largest inhibitor of conservation. It recommends using market mechanisms to encourage conservation by eliminating property taxes that go to water districts, making water more expensive in order to bring demand in line with supply.
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