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California Water Bond Politics August 13, 2014

California Water Bond Politics August 13, 2014. Prologue. 2006 Infrastructure Bond Package: Prop 1B Transportation Prop 1C Housing Prop 1D Schools Prop 1E Flood Control and Management 2006 Proposition 84 Park Bond Initiative: Included $1 billion for IRWM

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California Water Bond Politics August 13, 2014

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  1. California Water Bond Politics August 13, 2014

  2. Prologue 2006 Infrastructure Bond Package: • Prop 1B Transportation • Prop 1C Housing • Prop 1D Schools • Prop 1E Flood Control and Management 2006 Proposition 84 Park Bond Initiative: • Included $1 billion for IRWM • Included $1.2 billion for other water accounts No water-only bond proposal on 2006 ballot

  3. The push for a “true” water bond • Negotiations began in early 2008 to put forth a water bond package • Governor Schwarzenegger and Republicans were heavily involved in crafting the package • Democrats were willing to support a water bond, but only if several key water-policy related bills were adopted as well

  4. 2009 Water Bond Package • Ultimately a water bond in the amount of $11.14 billion (SBx7-2) was adopted by the Legislature and signed by GovernorSchwarzenegger for the November 2010 ballot.

  5. 2009 Water Bond Package

  6. 2009 Water Bond Package Spending Cap: “Of the $11.14 billion in bonds authorized in this division, no more than $5.57 billion shall be sold by the Treasurer before July 1, 2015.” Rationale: • Adopt one large funding measure upfront • Avoid going to voters twice in the same decade

  7. 2009 Water Bond Package In conjunction with SBx7-2, four water policy bills were also approved and signed into law: • SBx7-1: Delta Governance • Sets the co-equal goals recommended by the Delta Blue Ribbon Committee • SBx7-6: Groundwater Monitoring • Establishes the first statewide groundwater monitoring program • SBx7-7: Water Conservation • Sets goal of reducing urban water use by 20% by 2020 • SBx7-8: Water Diversion Reporting • Increases SWRCB enforcement of water rights use • Appropriates $546 million for water and environmental projects

  8. 2009 Water Bond Ballot Delay • Water Bond was slated for the November 2010 ballot but was delayed to 2012 at the urging of Governor Arnold Schwarzenegger • Water Bond was delayed again, this time to 2014 at the urging of Governor Jerry Brown. • Statewide drought conditions at the time were smaller than in comparison to today.

  9. Then and Now Graphic Credit: Brad Rippey/U.S. Department of Agriculture

  10. 2013-14 Water Bond Legislation • Over a dozen water bond bills introduced between 2013 -2014 • June 26, 2014 marked “aquapocalypse” the initial deadline for the Legislature to replace the 2009 water bond with a new water bond measure.

  11. Legislative Water Bond Efforts • The dozen of bills introduced was narrowed down to three measures by June: • AB 1331 (Rendon) • SB 848 (Wolk) • AB 2686 (Perea) • Several hearings were held and all three bills went through several rounds of amendments • As of June 25th the Governor still had not weighed in on any proposal

  12. Legislative Water Bond Efforts While a final deal had not been reached by the Legislature, there was consensus on several key issues: • Surface Storage with continuous appropriation • Desalination as an eligible project category • Water Use Efficiency • Water Reuse and Stormwater Capture • Water Recycling • Delta Mitigation

  13. Legislative Water Bond Efforts What wasn’t agreed upon… Funding amounts for: • SurfaceStorage • Delta Mitigation • Overall Bond Amount

  14. The Governor Finally Engages Governor Brown releases Water Action Plan Financing Act of 2014 on June 26th Total Price Tag: $6 billion • $2 billion for Surface Storage • $1.5 billion for Water Quality/Water Reliability • $1.5 billion for Watershed Protection • $500 million for Delta Mitigation • $500 million for Statewide Flood Management

  15. The Governor Finally Speaks “Five years ago, state legislators and the Governor put a pork-laden water bond on the ballot — with a price tag beyond what’s reasonable or affordable. “ “My $6 billion plan provides for water use efficiency and recycling, effective groundwater management and added storage.”

  16. The Democrats Push Back In response to the Governor’s desire for a smaller water bond, Senate Democrats release a scaled-down version of SB 848 (Wolk): • Reduces bond amount from $10.5 billion to $7.5 billion • Funding categories reduced by 30% except: ▫ Groundwater Treatment and Remediation (remains at $1 billion) ▫ Recycled Water (remains at $500 million) The night before summer recess, SB 848 fell apart and the Legislature recessed without reaching a deal.

  17. Summer Recess

  18. Legislature Reconvenes • Legislature reconvenes on August 4th with the Assembly Speaker publicly stating “we have to get something done this week.” • Rumors float that a deal cannot be reached, and thus the 2009 Water Bond might remain in place on the 2014 ballot • No formal hearings or meetings on water bond legislation take place during the entire week

  19. Republicans Push Back On August 7th, the Republican Caucus guts and amends SB 1013 into their new water bond proposal, totaling $8.7 billion: • $3 billion for Surface Storage (with continuous appropriation) • $700 million for Water Recycling • $600 million for Delta Mitigation • $1.5 billion for Watershed Protection • $900 million for Water Use Efficiency

  20. Game of Chicken Governor Brown: “They’re arguing about this $3 billion storage. You’re not gonna get these dams built without more billions, and it’s gonna take many years. We have a problem right now, and the $6 billion covers all the immediate stuff that we can do now.” Senator Jim Nielsen: “Where have we been? Where has the administration been since January? This water crisis has been around all these many months. Now in these last moments of session we’re going to panic, and gear up.” Senator Bob Huff: "You can't build two facilities with less than $3 billion.“

  21. Game of Chicken • Deadlines are looming to finalize a ballot measure with the Secretary of State • Dems need Reep votes in the Senate • Some Republicans are privately grousing that the 2009 bond is better than any current deal the Governor has put forth • Polling shows 9 percent favorability among voters for a $6 billion bond v. $11 billion bond • Polls show support for 2009 bond drops by 17 percent with Governor’s opposition • The Big Question: would the Governor truly fight the 2009 Water Bond in conjunction with his re-election campaign during a public crisis over drought conditions??

  22. The Governor Responds • Mid-day August 11th the Governor releases legislative language outlining a $7.195 billion bond • SB 866 and AB 1471 are amended and introduced the next morning August 12 • Press conference held with the Governor, MWD, agricultural interests, The Nature Conservancy, among others. • Noticeably absent: Republicans

  23. SB 866/AB 1471

  24. SB 866/AB 1471 • Funding eligibility dependent on compliance with 2009 Water Conservation Act and Urban and Agricultural Water Management Plans • Bay Delta Conservation Plan neutral • Protection of existing water rights • Repurposes $105 million from Proposition 84, $95 million from Proposition 50 and takes on $6.99 billion in new debt

  25. What’s Next Three Options • No deal is reached BUT the Legislature and Governor agree to delay the 2009 Water Bond to a future ballot • No deal is reached and the 2009 Water Bond remains on the 2014 ballot • A deal is reached and a new Water Bond is put on the 2014 ballot as a replacement to the 2009 Water Bond

  26. California Water Bonds: A Legacy of Victory • Since 1914, 13 water-related bonds have been put on the state ballot by the Legislature or voter initiative • Of those 13 water bonds, ONLY ONE has ever failed to pass (1982: Peripheral Canal, 62% opposed)

  27. California Water Bonds: A Legacy of Victory

  28. What’s Next • Do Central Valley interests get the $3 billion in surface storage and support the measure? • Does the inclusion of watershed solidify the support of environmental organizations? • Do urban water interests believe there is enough local and regional water reliability in the water bond to garner their support? • Can Delta interests transform the debate on the water bond into a referendum on the tunnels?

  29. Conclusion Christopher Townsend President CTownsend@TownsendPA.com Heather Stratman Senior Director HStratman@TownsendPA.com

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