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Testimony: Paying for California’s Water Needs

Ellen Hanak November 17, 2015

How can we fund California’s most pressing water needs? And where are we falling behind in paying for a water system that works for all? A hearing convened by the Senate Natural Resources and Water Committee yesterday looked at these and other questions. I joined other speakers from nonprofit groups focused on water, local governments, and water agencies to discuss these challenges and how to address them.

Lester Snow, executive director of the California Water Foundation, set the stage, stating that California is “falling behind in central water resource investments, especially in terms of public health and climate adaptation.” Investing in watershed health and ecosystems will help our water supply and our ability to weather climate change, he noted.

My testimony focused on the need for adequate funding to ensure the long-term success of our water system. In some areas—such as water supply and wastewater treatment—we’re doing fairly well in keeping up with needed investments. As documented in our report What If California’s Drought Continues?, investments in water supply for cities and suburbs helped us weather the current drought. It will be important to maintain the momentum in those areas. But in other key areas, we’ve found significant funding gaps, including safe drinking water in many rural areas, ecosystem management, stormwater management, and flood protection. The total annual funding gap for these “fiscal orphans” is roughly $2–$3 billion.

Local governments have the most responsibility when it comes to funding water systems. But there are looming concerns—including rising costs to address aging infrastructure and new treatment standards—and more uncertainty about the ability of local agencies to raise rates to cover them.

The state’s funding mechanisms “remain fundamentally unchanged,” Snow noted, even as California strains to meet various needs for water. I noted that California must go beyond water bonds, which at best provide $1 billion per year in support, to create the sustainable funding we need for this essential service.

Snow and I both spotlighted how efforts intended to improve accountability have made it more complicated to fund water systems locally. Three constitutional reforms passed by voters since the late 1970s—Propositions 13, 218, and 26—changed the way Californians pay for water services. These measures have made it more difficult for agencies to raise money locally for water infrastructure and services.

Laurel Firestone, co-executive director of the Community Water Center, talked about the many challenges facing California’s rural poor and underserved communities, where access to safe and reliable drinking water has been a particularly challenging problem in recent years.

Addressing our ability to provide a safe water supply for the poor, enable local water providers to charge appropriate water rates to cover needed investments, and maintain healthy watersheds and ecosystems are some key areas where change is needed. In January, a second hearing by this committee will look more closely into scaling up solutions for meeting these challenges.

Learn More

View slides from Hanak’s presentation
Read the PPIC Water Policy Center’s briefing on paying for water
Read the in-depth PPIC report on water system funding

 

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