The City of Canyon Lake repealed its water and sewer Utility Users Tax (UUT) after a state court ruled it unconstitutional.
In Beck v. City of Canyon Lake, the California Court of Appeal decided that the UUT violated Proposition 218, which restricts how property-related taxes and fees can be used. The court found the tax was tied to property ownership and funded general city services, not just the cost of providing water and sewer.
Although voters approved the tax twice—first in 2014 with Measure DD and later through Measure S to extend it—the court said voter approval could not override state constitutional restrictions. The UUT tax rate is 3.95%.
To comply with the ruling, the City Council adopted an ordinance to remove the unconstitutional sections from the city’s municipal code. The repeal will not affect the city’s finances, since the loss of revenue was already built into the city’s budget.
