Yesterday, Senate President Don Perata pushed a vote on his ill-conceived water bond package. Happily, it did not get the 2/3 vote required and failed. Perhaps the only good to come of that vote was that it created a reason for Senator Tom McClintock to put pen to paper (or fingers to keyboard) and pen this floor speech:
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alifornia’s water shortage is real. The last major dam built in this state was the New Melones in 1979. In the intervening time, the population has grown from 23 million to 38 million people. California now stores less than one year’s water consumption in the entire system, which is why the prospect of even a moderate drought has become ominous.
The problem is that in the last ten years, voters have approved SIX bond measures totaling almost $17 billion that ALL promised to enhance California’s water supply.
Meanwhile, our borrowing has gotten completely out of control. In the four years of this administration, annual general obligation debt costs have ballooned from $2 billion to $7 billion (including the ERB’s).
So, we have done an unprecedented amount of borrowing for water projects in the last decade and yet we have very little to show for it.
Compare that to the Burns-Porter Act that financed construction of the entire state water project. It was a total of $1.75 billion approved in 1960. That’s the equivalent of $12.3 billion in today’s money. $12.3 billion. That’s just slightly more than the water bonds ALREADY APPROVED just in the last five years since 2002.
The Burns-Porter Act paid for the entire State Water Project. In the last ten years we’ve approved a significantly LARGER sum of money, promising the public it would solve our water needs. So where’s this generation’s State Water Project?
We went wrong by making a series of utterly foolish mistakes – every one of them exemplified in this bill. Let me list five lessons we need to re-learn about responsible borrowing and public works.
The first lesson is: PROJECT FIRST – THEN FINANCING. A generation ago, the legislature and governor would first agree on a project, commission the engineering, obtain the bids – and ONLY THEN borrow just what was necessary to finance that project.
You don’t go to a banker and say, “I’d like to buy a nice house or something. Please lend me lots of money.” No, you select a house, negotiate a price and THEN obtain a loan.
When we borrow billions of dollars for vague notions like “water” or “parks” or “stem cell research” or “economic recovery,” with no specific projects in mind, we simply create a gigantic grab bag of money for pork projects. And that is exactly what this bill does. There’s not one specific project authorized and financed in this measure – not one – and yet we’re borrowing nearly $7 billion.
The second lesson is: DON’T ROB PIEDMONT TO PAY POMONA. If a project exclusively benefits a local community – it should be exclusively paid for by that local community. State bonds should only be used for projects that benefit the entire state. And yet this bond is almost entirely focused on financing a local project in one community from the tax revenues of another.
The third lesson is: DON’T ROB OUR CHILDREN. Whatever is purchased with a 30-year bond ought to be there 30 years from now when our children are still paying off that debt. And yet this bond includes hundreds of millions of dollars for cleanup and conservation projects that will be obsolete long before these bonds are repaid. Our children are going to have their own pollution to clean up and conservation programs to promote without paying for programs from 30 years ago.
The fourth lesson is: WHEN A PROJECT BENEFITS A DISTINCT CLASS OF USERS, THE DEBT SHOULD BE PAID BY THOSE USERS IN PROPORTION TO THEIR USE. Water projects should be repaid by the users of the water and electricity – and, by the way, that principle should extend to government’s use of water as well. Nearly half of our water supply is now being used to satisfy various environmental mandates imposed by government. That water should be paid for by government – just like any other user. That would give us some rational measurement to determine if these mandates make any sense.
Overall, unless it’s a self-liquidating general obligation bond like those used in the Burns-Porter Act, there’s no excuse for using a G.O. bond for a water project – it should be a revenue bond repaid by the ACTUAL users of the ACTUAL water produced by the ACTUAL project.
Fifth and finally – Dams, aqueducts and levees require massive amounts of concrete. Let’s get real – every pound of cement produces a pound of carbon dioxide. No significant public work can move forward in this state as long as we have arbitrarily imposed a draconian reduction in carbon dioxide emissions. Any serious public works bill must be accompanied by the repeal of AB 32.
Mr. President, the crisis is real, but squandering another $7 billion on top of the $17 billion we’ve already squandered in the last ten years for water projects that never materialized won’t solve that crisis.
I suggest that we determine what specific projects of statewide benefit will most economically meet our water needs and then authorize the engineering and bidding of those projects – and do whatever is necessary to expedite that process. And once the project is engineered and the bids are returned, then let us craft a bond repaid by the actual users of those specific projects, allow them to use whatever amounts of concrete are necessary to build them – and get it done.
This measure does none of those things, and as such takes its place in a long line of bond measures over the last decade that have run up unprecedented debt with little of value to show for it.