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Paying for Water?

Way to Solve the Delta's Water Woes

New America Media, News Report , Vanessa Hernandez Posted: Aug 27, 2009

SACRAMENTO, Calif. -- For years, California has engaged in a never-ending search for money to pay for the staggering cost of improving the Sacramento-San Joaquin River Delta, formed at the western edge of the Central Valley by the confluence of the Sacramento and San Joaquin rivers.

Now, the Public Policy Institute of California, a San Francisco-based nonpartisan research foundation, is proposing to charge those who benefit from Delta water. The PPIC laid out its proposal at a recent briefing in Sacramento.

Known as beneficiary financing, PPICs plan calls for user fees for needed improvements to be paid by those who benefit from Delta water, rather than broad-based taxes on the entire population.

Its intrinsically fairer, said the PPICs Ellen Hank, and it certainly gives an incentive to conserve resources more.

Dean Misczynski, who wrote the PPIC report, also alluded to an intuitive fairness, when water users pay for the benefits they receive.

As of now, everyone pays for water as part of utilities, but maintenance and capital for projects like the Delta are also paid for out of the state budgets general fund.

Large-scale improvements that are too big to be financed by user fees could be financed by bonds, the report said.

Five water bond bills that are currently before the legislature provide $3 billion for dams and reservoirs, and $7 billion for environmental concerns like habitat restoration and water conservation.

The difficulty with using the state fund is we have a lot of competing demands on that fund, so thats one of the reasons to look for beneficiary payment, said Hanak, director of research at PPIC. The report shows that it is the other alternative, but it also acknowledges that it is difficult to raise money for general fund purposes.

The debate over financing the Delta involves both water users and environmentalists. Those who use water farmers, urban dwellers, businesses, cities and counties contend they should only have to pay for the water that they actually receive and use.

The Public Policy Institute favors an approach taken by environmentalists whereby user fees would also finance environmental restoration efforts, the same way we expect an industry thats polluting to pay for clean-up, Hanak said.

In California, the most pressing water concern is the safety of the Deltas levees. Most are in dire need of repair. Critics say the states current unstated approach has been to wait until the last minute and then spend large amounts of money on emergency repairs and liability fees. Rather than continuing this process, they say improvements should be made before a disaster strikes.

There is a need to set priorities and ask contractors to pay to rebuild delta levees that directly affect them, said Misczynski.

Financing aside, the PPIC emphasizes action.

Solving the problems that we are now facing as a state in the Delta really requires some urgent and bold action in order to address the environmental problems that we have there and to also make water supply more reliable, said Hanak. We need to find ways to do business differently and to pay for things differently.

The report can be found at http://www.ppic.org/main/publication.asp?i=908.

NAM editor Aaron Glantz contributed to this report.

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