Solutions for California Water Woes

Solutions for California Water Woes

Last week, California governor Arnold Schwarzenegger called state legislators into a special session to hammer out the details of proposed water legislation. The proposal could include a bond measure of $9.4 billion or more, and would ideally address the highly contentious water allocations and restrictions in the San Joaquin-Sacramento Delta. With so much at stake, it’s important that California gets this right.

To be sure, California’s water situation seems pretty dire. Three years of drought conditions have stressed the state’s water resources, and the pumping restrictions in the Delta aimed at species conservation have raised the ire of farmers who are unable adequately to irrigate their crops. But thanks to the drought there is one thing that is growing nearly unabated in California. That would be frustration.

In convening the special legislative session, Schwarzenegger threatened to hold hostage more than 700 other bills unless legislators started making headway on addressing the state’s water problems. Meanwhile, the battle over the Delta has become so contentious that the Obama administration recently stepped in – Interior Secretary Ken Salazar asked the National Academy of Science to review the pumping restrictions in the Delta. In all of this confusion, and with multiple agencies and governments involved, it’s easy for legislators to feel compelled to do something, or even anything. As they strive to take action, legislators should not lose sight of key realities.

First, water conservation should be incentivized. Appropriate pricing of water that better reflects its scarcity would go a long way. Too many water users in California are still paying artificially low rates and flat fees, regardless of the amount of water used, or prices that reflect old subsidy systems. Changing the way water is paid for seems like an obvious approach, but many locations still rely more heavily on rules and fines than price-based incentives to force conservation.

Consider Los Angeles City Councilman Greig Smith, who openly violates the city’s rule about watering lawns only twice a week for 15 minutes. Smith waters his lawn three times a week for eight minutes, for a weekly total of six minutes less watering than the city rule (local water officials are still not quite sure what to do about him). Pricing would also help alleviate some politically embarrassing situations – such as daily watering by Los Angeles Mayor Antonio Villaraigosa, and last year’s overwatering by the general manager of that city’s Department of Water and Power.

The same goes for infrastructure projects – appropriate pricing matters. Investment in water projects might be a part of a sound plan, but open-minded and unbiased studies should address the benefits and impacts, as well as the costs. In this economically stressed time, it’s even more important to avoid overspending. California already has $67 billion of outstanding debt in the general fund. A bond issue is most appropriate for projects that stand to benefit all taxpayers in the state. For most water infrastructure projects, the costs should be preferentially incurred by those who receive the benefits. For example, some have urged lawmakers to consider revenue bonds backed by user fees. This would ensure some hope of repaying the cost of these projects, which do not create more water.

Contention and frustration over water supplies and management of this limited resource are running high, understandably. It remains important, however, for lawmakers to keep a level head, or else they run the risk of making a bad situation even worse. Lawmakers should opt for common-sense solutions that limit the burden for users who are effective at conserving water. Better incentives and appropriate pricing will help conserve the Golden State’s most precious natural resource.

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Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.