July 21, 2014
For Immediate Release
California Department of Water Resources Running Out of Funds,
Taxpayers & Ratepayers on the Hook
Even as it continues to promote the ruinously expensive, environmentally destructive and ultimately unworkable Bay Delta Conservation Plan (BDCP), the California Department of Water Resources has failed to collect $125 million for ongoing operations owed by water contractors, and now faces a $60 million shortfall.
The dearth of cash couldn’t come at a worse time for the beleaguered agency. DWR now has only $50 million available, enough for about 60 days of operations, including meeting payroll. This has required the agency to withdraw a $500 million bond proposal for BDCP planning costs because the measure’s draft disclosure form did not cite the financing deficit.
Meanwhile, Governor Jerry Brown and his proxy, DWR, continue to promote the BDCP, which would authorize the construction of two massive water conveyance tunnels beneath the Sacramento/San Joaquin Delta at a final cost to ratepayers and taxpayers of $ 67 billion or more, inclusive of interest and cost overruns.
Ultimately, DWR cannot go broke because it has a default source for funding: property taxes and water rates. They believe property taxes can be increased to meet the agency’s needs without a public vote. This is planned for Santa Clara, where city officials claim the moves are exempt from Proposition 13 and Proposition 218, which restrict state government options on raising property assessments. The Metropolitan Water District of Southern California claims it can raise taxes without a vote.
DWR’s quandary comes at a critical time for the BDCP. The administration has yet to make a strong business case for the Twin Tunnels. The lavishly expensive project is being pushed at a time of growing public resistance to gigantic infrastructure projects that have no palpable benefit. As the facts emerge about the BDCP, it is clear the plan will not increase the state’s net supply of water, the Delta will be placed at great risk, and the beneficiaries will be a handful of corporate farms in the western San Joaquin Valley and Tulare Basin, not southern California urban ratepayers.
Further, secure funding is becoming increasingly elusive. A large water bond seems foredoomed to failure. Property owners are thus the only viable alternative. The $125 million dollars that ratepayers and taxpayers will cough up to pay for DWR’s shortfall is just the beginning. It will take an additional $1.2 billion to complete the planning process for the Twin Tunnels. If the project moves forward, many California residents will see their properties taxes and water rates spike to support the $67 billion Twin Tunnels. Few state citizens understand their properties can be so encumbered without a vote or even token input.
Unfortunately, they may be about to receive an object lesson in property taxation without representation.
Carolee Krieger, Executive Director 805-969-0824
Tom Stokely, Analyst/Media Contact 530-524-0315