Water bond deal reached

by John Seiler | August 13, 2014 6:39 pm

Writing Wednesday afternoon, a deal just was reached [1]among Gov. Jerry Brown and Democratic and Republican leaders in the Legislature on a water bond for the November ballot, costing $7.5 billion. It would replace Proposition 43[2], the $11.1 billion bond currently in place. The Bee reported:

Negotiations continued late into Tuesday night after Republicans rejected a $7.2 billion measure containing $2.5 billion for storage. That amount has since risen to $2.7 billion, enough to convince Republicans who have insisted on enough money to construct dams and reservoirs allowing California to withstand withering droughts like the one currently afflicting the state.

“Yes, there’s a deal,” said Senate Minority Leader Bob Huff, R-Diamond Bar.

And above whatever is spent on storage, the rest of what’s in the bond, as in Prop. 43 and the other (now defunct) proposals, is pork.

Which raises a question: Why not trim down the project to $3 billion for storage and build it just from the general fund? These projects take years to get going. So how about $500 million a year from the general fund for six years, the money taken by cutting waste in a budget that is $108 billion[4] for fiscal 2014-15, and will be even higher in future years? Surely, 0.5 percent waste could be found, and cut.

But that’s not how California does things. Instead, the bond, whatever the amount is, and assuming voters pass it, will be paid down over 30 years. With interest, that means the total cost will be double the actual construction costs.

That’s why I call bonds “delayed tax increases.” Remember all those bonds voters passed a decade ago — for water (not storage), stem-cell research, schools? When the bill came due, taxes were raised $7 billion with Proposition 30 in 2012.

Finally, why not use this as an opportunity to privatize the entire water system? The new companies that run it would raise private capital to fund system upgrades — while also cutting overall rates because the private sector is far more efficient than the government sector.

The current water system is a kind of soggy DMV — politicized, inefficient, expensive.

Put Google and Apple in charge of the water system, and see rates paid by consumers drop as fast as computing costs.

Source URL: https://calwatchdog.com/2014/08/13/water-bond-deal-close/