Legislator: ‘Toilet Tax’ Could Cost Taxpayers

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October 15, 2010; Source: Long Island Herald | Water, water everywhere, and not a drop will be tax free—at least not in Nassau County, N.Y.  This enormously wealthy part of suburban New York City is governed by a Republican County Executive, Ed Mangano, who has proposed a “water use fee” in the County’s 2011 budget.

The proposed county ordinance reads: “The County is hereby authorized to impose service charges upon exempt users and high water users for the use of services of sewage facilities maintained by the district,” but according to Democratic legislator Dave Denenberg, it is a tax geared to water meters, not sewage meters.  Denenberg calls it a toilet tax, applicable to tax exempt public and nonprofit water and sewerage users, including even the Nassau fire department.

The county exec guesses that the toilet tax could pull in $38 million a year into the public’s coffers.  As we have suggested elsewhere, local governments are unbundling the components of public services that are normally paid for in tax revenues, converting as many of the components into separate fees rather than taxes, and charging those fees to users regardless of their tax exempt status.  This is one more way that the public sector is putting the hit on nonprofit property owners by sidestepping the ornery concept of tax exemption.

Just imagine nonprofits warning their staff about regulating how often they flush, asking their staff to bring in their own bottled water rather than using the tap, and exploring any other mechanism they might think of to reduce water consumption.  It will be an allegory of bitter water for nonprofits in Nassau County this coming year if the toilet tax isn’t flushed away.—Rick Cohen