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Last week, due to a technical glitch, the Brown Administration unintentionally released the Governor’s proposed budget a few days earlier than expected. Through $10.3 billion in cuts and increased revenues, the proposed budget would close a $9.2 billion deficit, compared to last year’s $26 billion gap, and build a $1.1 billion reserve. The most severe cuts will be inflicted on CalWORKs, Medi-Cal, child care, and the Cal Grant Program. The budget is contingent on voters approving a temporary increase in the sales tax and a higher levy on wealthy residents. If voters reject the ballot initiative in November, the state would be forced to cut another $4.8 billion from schools and community colleges; a cut equivalent to 3 weeks of instruction. ‘Trigger cuts’, as they’re called, would also strip funds from courts, public safety officers and flood protection.
So how did the environment fare in the proposed budget? Overall, environmental protection did better than many other programs, though there are significant cuts to key programs, and much of the funding that has been allocated is for projects that are controversial even within the environmental community. The Department of Parks and Recreation will see $22 million in cuts, twice the reduction from last year’s budget, which would result in the closure of up to 70 state parks. Additionally, if the Governor’s tax initiative does not pass, it will trigger the elimination of all seasonal lifeguards on state beaches and a 20% reduction of the Park Rangers workforce.
Programs that will see more funding in 2012 include highly contentious projects, like California High Speed Rail and the Delta conveyance program. The budget allocates $15.9 million to usher along the development of a high speed rail system, which is under increasing scrutiny due to governance, routing and financing issues. The budget would also allocate more funding to the Department of Water Resources for its work on the highly controversial Bay-Delta conveyance research and planning processes; specifically, for 135 positions for preliminary engineering work to support the Delta Habitat Conservation and Conveyance Program.
The budget also earmarks $1 billion that are to be received by auctioning pollution credits to California companies to be used to “create jobs and deliver public health, economic and environmental benefits” as part of the state’s effort to curb global warming. Businesses have complained that this cap-and-trade program, a critical piece of California’s landmark legislation aimed at cutting greenhouse gas emissions to 1990 levels by 2020, represents an unfair tax. Cap-and-trade is also controversial among the environmental and environmental justice communities, some of whom believe it merely commoditizes dangerous pollution rather than directly and more aggressively curbing it.
The governor’s proposal still needs to be debated by the Legislature, and the Brown Administration will release an updated version in May. The deadline to have a budget passed by lawmakers and signed by the governor is June 30.
Recently, John Woodly, the former Assistant Secretary of the Army of Civil Works, wrote an article citing previous Administrations’ efforts to utilize unique government expertise in public and private sector projects. Specifically, he highlighted a dam removal project in North Carolina as an example of a collaborative effort that brought together civilian biologists and engineers to work with military demolition experts as means of “getting more from each appropriated dollar.” Fortunately, as Woodly noted in the recent article, California too has a dam removal project ripe for government funding.
The San Clemente Dam Removal Project provides an excellent opportunity to maximize the use of public dollars to achieve multiple objectives. The project will remove an unsafe dam, help to restore a vibrant ecosystem along the Carmel River, and in the process can provide prime training for military personnel.
The dam removal project is being carried out through a unique public-private partnership of California American Water (a private company), the State of California, and the National Marine Fisheries Service. It is widely supported by federal, state, and local agencies, as well as conservation and community groups. The Planning and Conservation League Foundation has played an important role in working jointly with the Carmel River Watershed Conservancy to complete a watershed study of the impacts of the dam structure, and we now are working on a public outreach and education campaign on the positive effects the dam removal will have in the watershed and public safety.
For three years, the California State Coastal Conservancy has been trying to secure the U.S. Department of Defense’s (DoD) assistance on the project through the Innovative Readiness Training Program (IRT). Despite the fact that the California National Guard has confirmed that the project would provide an excellent training opportunity due to the rugged terrain in the project area, the IRT program has rejected the project. Requests by Congressman Farr, Senators Boxer and Feinstein, and the CNG for DoD to overcome this obstacle have been unsuccessful.
So far, nearly $75 million of the estimated $83 million needed to complete the project has been secured by the project partners. Of that, less than $1.5 million comes from federal sources. The assistance of the IRT could provide valuable on-the-ground training for our forces while also helping to recover to listed species and a river system. As Mr. Woodly stated, “We hear a lot about partnerships and collaboration in D.C., but I’m speaking of tangible projects, not just process alone, and that’s where we’ve really fallen short in the past few years.” If Secretary of Defense Panetta wants an easy success, the San Clemente Dam Removal project can provide it.
Regarding the $11.14 billion water bond currently slated for the November 2012 ballot, Governor Brown on Friday stated, “”We have to figure out a way to make it more politically acceptable”. In its current form, he said, “It won’t pass.”
By the November 2012 election, the bond language will be three years old. In this three year period our understanding of what is needed and how it can be financed will be further informed by several ongoing processes, including the Delta Plan and new information on conservation achievements and potential. Continuing the same outdated and unrealistic funding plan wastes an opportunity to determine whatCaliforniareally needs to better manage its water and who should pay for different water investments.
Many agree that the $11.14 billion water bond as written should not be placed on the ballot and the amount of new debt represented by the bond as it is currently written is unacceptable. Nor does PCL think we should continue to delay a bond decision, a possible outcome that will ensure an even more outdated and less relevant proposal will eventually be put in front of voters.
Governor Brown’s recent statement agrees with PCL’s recommendation to “Consider a smaller water bond when the economy improves”, first articulated in last year’s “8 Affordable Water Solutions for California.”
A few months ago a prestigious Blue Ribbon Committee (BRC) delivered its report outlining challenges and opportunities for Metropolitan Water District (MWD) to the year 2060. MWD is the largest supplier of drinking water in theUS, supplying water to 14 cities and 12 municipal water districts that then provide water to 18 million Californians.
In this report, the BRC analyzed risks and opportunity costs of planning under current and plausible future trends in MWD service area for the next 50 years. Most interestingly, the BRC found, “In many plausible future scenarios, the share of imports in the region’s portfolio from the State Water Project [Delta water] and Colorado River Aqueduct is likely to decrease… Under these scenarios, locally developed supplies will need to increase from their current level and transfers from agricultural water users also pursued.” [emphasis added]
The BRC also found that if MWD’s business model is not revised, the decline in supplies from the Delta and Colorado River combined with the difficulty in rate increases will make it difficult for the agency to maintain its existing infrastructure or invest in a new conveyance structure, fund the restoration of the Delta, or play a leading role in developing new local supplies.
Looking further out to 2060, the BRC finds that a wide range of economic, demographic, climate, and other conditions could prevail in which the import-focused revenue model and existing governance structure could prove constraining and impose risks to Metropolitan’s long-run financial viability.
The BRC report finds that in order to preserve the reliability and affordability of water, agencies will have to transition from an imported water dominant portfolio to a diversified portfolio, with a greater percentage coming for local water supply investments. This report reinforces what PCL has long maintained: it is not only an environmental imperative to transition reducing reliance on imported water, but it is also financial imperative as well.
