Farm groups have balked at a proposal to more than double Oregon’s water rights transaction fees, which state regulators claim is required to avoid layoffs.

Unless transaction fees are raised 135% under House Bill 2803, the Oregon Water Resources Department says it’ll have to cut seven full-time positions in the upcoming 2025-2027 biennium.

However, a coalition of 15 organizations representing irrigators and other water users opposes the “astronomical” growth in fees, arguing any budget shortfall should be covered at least partly with general fund dollars.

“It simply does not make sense to ask water users to pay more for a system that continues to deliver less,” said Ryan Krabill, government affairs manager for the Oregon Farm Bureau.

The increase is necessary because past fee hikes haven’t kept up with the agency’s labor costs, which have gone up partly due to collective bargaining agreements, said Ivan Gall, OWRD’s director.

Also, the department has been processing fewer water rights transactions but the applications it does receive are generally more complex, he said.

In recent years, federal funds from the COVID-era American Rescue Plan Act helped bolster the agency’s finances, but that money is now running out, Gall said.

“Short-term or stop-gap funding sets us up for bigger deficits down the road,” he said during a recent legislative hearing.

Reducing staff positions at OWRD would likely add to the backlog of water rights transactions that’s been a source of frustration for years, Gall said.

Fees are based on the volume of water and type of transaction and would range from several hundred to several thousand dollars under HB 2803, he said. “The more water you apply for, the more it costs.

For example, the “base fee” to appropriate water through a single point of diversion would climb from $1,090 to $2,565. The fee for appropriating additional increments of water under such a permit would go from $410 to $965.

Natural resources groups have called the proposal “staggering” and “not workable,” since all state taxpayers benefit from the responsible management of water and should help shoulder part of the added cost.

“An abrupt 135% increase to most water transactions without any improvement to service is completely untenable and inappropriately places the entire burden of the department’s fiscal shortfall on the backs of water users,” said Ken Yates, policy coordinator for the Oregon Water Resources Congress, which represents irrigation districts.

Other state agencies have contributed to OWRD’s budget challenges by charging to review water transactions, often resulting in new permit conditions that can spur litigation, according to the coalition of water users.

“That work generally is undertaken to serve the general public and therefore, should be paid by general fund rather than individual water users in the form of fees,” according to the coalition’s written testimony.

The funding mechanisms for OWRD and other natural resource agencies were established with the intent that their leaders would be “beat up” and scrutinized by lawmakers when asking for more money, said Rep. Ken Helm, D-Beaverton, co-chair of the House Agriculture Committee.

Helm said he’s unsure that’s the best system but it’s unlikely to be changed in the current legislative session.

It should be kept in mind that Oregon’s 14 natural resource agencies receive less than 3% of the state’s general fund dollars, Helm said. “Just understand that all these departments that are coming to us with budget issues are between a rock and a hard place from the very start.”