You are correct that sales tax doesn't cover schools or the RFA, but that is due to previous stupid policy choices, where  services of general benefit are paid for by specific taxes.  People who study political policy have been pointing out that this is an unwise way for governments to fund such services for about the last 300 years.  Right now, this stupidity of this with regard to school funding is being looked at carefully in the State legislature, and there is hope that it will be changed.   The funding of the RFA is a continuing scandal of bad government for which no good outcome seems foreseeable.    But your proposal to provide free water  would surpass the foolishness of the RFA scheme considerably, as consumption of water is NOT a general benefit, it is a specific benefit, and so specific funding is appropriate.     I am not familiar enough with the realities of sewage benefit (general vs specific) to evaluate if it would be a reasonable substitute for a tax incentive.