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IMPROVING NEW MEXICO’S WATER MANAGEMENT - page 43 / 47

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Declarations

Total Revenue

$28,088,021.00

What Is the Economic Impact of a Conservation Charge on Water Users?

Water users would bear the brunt of a conservation charge but, in general, the economic

impact to water users would be minimal. Moreover, if the proceeds from the charge were used

in part to offset the cost of implementing water conservation tools and better water management

for water users, the benefits of the fee would directly accrue to the water user.

Tables 18 and 19 below, itemize the impact to agriculture in the Rio Grande and Pecos

Basin from the assessment of a water conservation charge. Note that a conservation charge of

$2.00 per acre-foot represents less than 2% of the total farm costs incurred by the farmer.

Further, the reduction in net income (% of farm returns) resulting from the fees are less than 10%

in all regions with the exception of Carlsbad in the Pecos Basin.

Table 18: Impact of a Water Diversion Charge on Agriculture in Rio Grande Basin (2001)

$2.00 per aft for surface water and $2.00 per aft for groundwater

Diversion tax as

% of water delivery costs

Mountains

Bernalillo

Socorro

Dona Ana

29%

24%

33%

11%

Northern

% of cash operating costs

0.9%

2.7%

1.2%

0.6%

% of total farm costs

0.8%

1.6%

0.9%

0.5%

43

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