January 2005

CALFED Funding Crisis

New Proposal Still Seeks to Tax Water Users

Avoiding warnings from Federal and State lawmakers, the California Bay Delta Authority (CALFED) unanimously adopted an $8 billion finance plan to pay for the next ten years of projects. The financing proposal intends to shift costs away from the state, instead looking to the federal government and water agencies to carry the burden. It must be noted, this obscene amount of taxpayer money does not (I repeat — does not) include any funding for actual construction of much needed new water storage.

At the two day meeting to address this issue, a spokesman for state Senator Michael Machado advised the Authority that it needed to pare down its wish list. California has carried the effort to the tune of 60% of the funding in recent years. The new proposal reduces the state share to 30%, which equates to approximately $2.4 million over the next ten years. To date, the state has relied heavily on bond monies approved by voters in 2002 to fund the program, money that is running out, and that is unlikely to be renewed due to the financial state of California. In a letter to the Authority opposing the finance Plan, Machado wrote: "To think we can continue a program with such a large unfunded public commitment is folly."

From the federal government, the finance plan seeks $1.7 million (21% of estimated program costs) over the next ten years. A lofty goal in light of the fact that it took six years of tussling to obtain the authorization of $395 million pursuant to HR 2828 over the next five years, monies that still must be appropriated prior to their receipt.

Where does CALFED hope to receive the remaining $4 billion in funding, 9% from major water users, and 40 percent from local governments and water agencies. How are these costs be paid for? Increased fees to water users. As stated in the last edition of the Green Ribbon Report, it is ludicrous to ask for increased monetary contributions from water users north of the Delta to pay for programs that seek to divert increased amounts of water out of the area, for programs that harm local communities and governments, and negatively impact long existing farmland. It equates to paying for your own demise.

Further, the lion’s share of the programs that have been funded are ecosystem restoration projects, benefits that accrue to society as whole, and thus should be paid for by society as a whole. This burden should not be placed on the backs of farmers and ranchers. The key terms employed throughout the dialogue at the two day CALFED meeting were "linkages and assurances". Water users across the board voiced their insistence that any fees must be linked to defined benefits, and participation in such a proposal must come with assurances that the stated benefits will be forthcoming.

In true bureaucratic form, despite the warnings, despite the morbid financial picture, and despite the unresolved issues, the Bay Delta Authority unanimously passed this financing framework. The representatives on the Bay Delta Authority put off resolution of the serious issues looming ahead, and instead chose to proceed with sending a plan, that can be referred to as nothing less than ill-advised and half-baked, to the State Legislature.

The success of this funding framework rests on the agreement and commitment of funds from the federal government, the state government, local governments and water users. Dealt those cards, optimism is not a feeling that is running over. Should the issue of funding not be resolved, it has been predicted that the CALFED program could be dead in three years. For now, CALFED continues to ask all to send money in lieu of flowers.

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