The Pacific Institute issued a lukewarm report this morning about Proposition 1, the water bond on the November ballot.
While taking no formal position on the bond, the institute found that the bond “can be, at best, a down payment on our water future,” depending on how the money is spent, and warned that surely more investment will be necessary down the road.
Some highlights from the institute’s report:
• WHO PAYS?: The new bond will be funded by taxpayers, as opposed to those who directly benefit from whatever projects are build. That’s in contrast to the 1960 bond that paid for the construction of the State Water Project, money which came initially from the state’s general fund but was later repaid by project beneficiaries. Concerns about taxpayers footing the bill are “legitimate,” the institute found.
• GROWING DEBT: The size of water-related bonds has “increased dramatically.” Between 2000 and 2013, California voters approved six water-related bonds totaling $24.8 billion. November’s proposed bond is the fourth-largest in state history.
• BUT FOR CONTEXT: While California has the largest bond debt of all 50 states, on a per capita basis the state’s public debt in 2011 was about $4,000 per resident, ranking 21st in the U.S.
• WHAT GETS FUNDED?: Most of the money in the bond is dedicated to water storage, whether above- or below-ground. In fact, even though this bond is much smaller than its predecessor, the proportion of total funding for storage increased from 30 percent to 36 percent. “Far less” money is available in the new bond for recycling, stormwater capture or water efficiency projects, despite the fact that those strategies typically provide more water at a lower cost. “Funding for water conservation and efficiency is especially low,” the institute finds.
• ”TILT” TOWARD SURFACE STORAGE: When it comes to surface storage vs. groundwater storage, the categories of benefits that must be considered — including recreation — “are considered to be tilted toward favoring surface storage.”
• BANG FOR THE BUCK: Bond money will be doled out through a competitive grants process. However, “there is no requirement that all water supply options compete with one another” when it comes to cost effectiveness. In other words, a proposed dam doesn’t have to compete with new water conservation initiatives. “Thus, there is no assurance that the public is getting the greatest benefit from its investment.”
• TUNNEL TALK: Regarding the Delta tunnels: The bond won’t pay for them. “Proposition 1 does provide some funding for Delta habitat restoration, which is part of the cost of the overall Bay Delta Conservation (Plan) objectives, but this funding is far more limited than in the 2009 proposed bond, which included $1.5 billion explicitly for the BDCP.”
• NO QUICK FIX: Proposition 1 “will do little to alleviate the current drought.”
• MUCH-NEEDED HELP: The bond allocates “considerable funding” to disadvantaged communities — at least $696 million, or 9 percent of the total bond. Most of that money would be for drinking water or wastewater projects.
BOTTOM LINE: IF the bond passes, and IF the funds go to “effective projects,” and IF those projects are well-designed and implemented, “the long-term benefits could include a reduction in the risk of future droughts and floods as well as improvements in the health of California’s aquatic ecosystems.”