Solution to problem: Raise water rates. Why is this so hard? Might force people out of the state, but clearly there are too many given the present resources.
Cutting off farmers is politically scary.
The yuppie dream maybe...
Raising the rates for the right parties is what we should really be talking about but the question then is, who? Small farms and industry would be hit very hard but the ones with deep pockets likely wouldn't blink and they're the biggest problem.
In my opinion it would need to be a sliding scale. Not just a "$x for n gallons" pricing structure but the more you use the greater the cost per gallon. That would hit the biggest users the hardest while leaving the average person unaffected (unless for some reason they're using absurd amounts in which case they need to be affected).
The "problem" is that the large users go off the grid (via solar, etc). Well, that is not a problem. The problem is that this introduces variability into the grid. That variability is expensive to smooth over, with the result that it can actually be more expensive as a fully loaded cost to supplement your power with solar than getting it from the grid, due to the equipment needed to manage the sun's mood swings.
The result of all this is it is really hard to get the incentives right for pricing electricity. I suspect the same is true for water; it is hard to store, there are demand spikes, and there are things like private wells that have weird effects on the water available to everyone else.