If we agree that overconsumption of groundwater combined with under-replenishment of all frewshwater resources due to climate change implies a coming strategic shortage of water, then yes, absolutely, state and federal government should be severely scrutinizing where water is going and prohibit excess water consumption for luxuries and for exports.

Another way to go about it would be what the person above you said: Create tiered pricing for water such that the reasonable monthly use of water is as close to free (minus upkeep of water infrastructure) as possible, while quickly ramping up marginal cost.