Jerry Brown’s Delta tunnels would triple water rates

Delta TunnelsGov. Jerry Brown’s $17 billion California Delta WaterFix tunnels are in trouble over a threat to triple water costs and a federal probe of $84.8 million in illegal payments.

The board of the Fresno-based Westlands Water District, America’s largest water supplier, voted 7 to 1 on September 19 to pull out their $4.5 billion, 26 percent participation in the $17 billion WaterFix, which planned to build two 40-foot wide tunnels stretching for 35 miles to protect fish and divert water from the Sacramento River to the California aqueducts that service the San Joaquin Valley farmers and Southern California cities.

The move followed a July 17 presentation by Goldman Sachs to the Westlands Water District titled, “California WaterFix Financing Strategies.” Goldman apparently estimated that to finance the project, the average cost of water exports from the Delta could rise by $260 per acre foot by 2033. That is two to three times the price paid to the Bureau of Reclamation this year.

The U.S. Department of Interior Inspector General also issued an audit that found that during the Obama administration, federal Bureau of Reclamation financial assistance agreements with the State of California’s Bay Delta Conservation Plan (BDCP) did not “fully disclose to Congress and other stakeholders the $84.8 million cost of its participation in the BDCP efforts, including its subsidizing of the Federal Central Valley Project (CVP) water contractors’ share of BDCP costs.”

The Inspector General also found the Bureau of Reclamation was never reimbursed for $50 million of advanced payments and improperly paid $34.8 million of the contractors’ costs through June 30, 2016. The IG stated that the Bureau of Reclamation submitted “inaccurate annual Calfed Bay-Delta certified financial reports” and “the actions it took to fund BDCP planning costs were neither transparent nor consistent with the ‘beneficiaries pay’ principle underlying Reclamation Law.”

The IG referred the matter to the “Assistant Secretary for Policy, Management and Budget for resolution,” a step that may lead to a U.S. Justice Department civil or criminal referral.

The Associated Press obtained documents on September 18 that reveal that the legal language governing California’s biggest water project in half a century has been tweaked so that the tunnels are now just an “update,” rather than a new project. That way every one of the 29 water districts that receive water from the existing California State Water Project will be jointly responsible to pay for the tunnels.

A Harris Farms’ Executive Vice President and Westlands board member told AP that there is no guarantee that the project will consistently increase future water supplies and that “obligating hundreds of family farms” to pay for the tunnels doesn’t make economic sense.

The Los Angeles Metropolitan Water District will vote on continuing as a $4 billion WaterFix investor, and the Santa Clara Valley Water District will also vote on its $2 billion participation. It is estimated that the project will cost residential water users about $3 to $4 a month. But that assumes an on-time completion, and that the project performs as advertised.

This article was originally published by Brietbart.com/california

Proposition 53 and Voter Power

One California ballot initiative getting far less attention than it deserves is Proposition 53. It would require statewide voter approval for revenue bonds (not now subject to voter approval) in excess of $2 billion.

The anti-Proposition 53 theme is that rather than giving citizens more power, it would reduce their power over local government. Their voter guide statement claims it “erodes your voice and the voice of your community,” allowing “voters in faraway regions the power to deny local projects your community needs.” Unfortunately, those claims, focus-grouped to trigger knee-jerk “no” votes, are deliberate distortions.

Opponents’ claims that Proposition 53 would lead local voters to lose control over local government ignore that it “does not apply to bonds sold by cities, counties, schools, community colleges, and special districts,” which involve the local issues voters care about most. And state general obligation bonds already require voter approval. What Proposition 53 focuses on are joint power agencies (JPAs) which combine different government bodies, because JPA revenue bonds do not require voter approval in California (though they do in some states).

Local voters already have very little power over JPAs, however, making the hobgoblin of lost local voter control imaginary. JPA boards include elected officials from government bodies involved (not all local) and sometimes, those in appointed government positions. Voters have no power over any appointed members. While they can vote for representatives to their local governments, those representatives will always be a minority on the board, so voters have no control over who will be selected as JPA board members. If voters are unhappy with those selected, even throwing them from office (for a generally low voter-visibility role) gives them no power over who will replace them. And while voters have very limited legal power to override JPA decisions (via an initiative within 30 days), its difficulty seldom makes it an actual option. With so little local voter power over JPAs, Proposition 53 cannot eliminate an appreciable amount of it.

High Speed RailThe Legislative Analyst’s conclusion that few projects would likely be subject to Proposition 53 similarly undercuts the lost voter power narrative. The two projects that will clearly be affected — the extraordinarily expensive bullet train and Sacramento delta water tunnel — are also instructive. Neither are really local projects, but ones that would substantially reshape California’s economic landscape, illustrating that JPAs allow policy making for state level issues, while evading the requirement of putting such bonds to a citizen vote.

If citizen control was the real issue motivating Proposition 53’s opponents, local good government and taxpayer groups would offer widespread support. But they do not. State and local taxpayer groups, in particular, favor Proposition 53, reflecting widespread belief that the projects in question can’t be justified and that citizens would be better served by Proposition 53’s securing of more voter power.

Further, virtually all the opponents of Proposition 53, supposedly on behalf of voter groups who favor it, come from groups who benefit from more government projects. Unions and their members who construct the projects (supported by other unionized government employees), those whose sales of goods and services will increase, as well as a host of consultants and lobbyists, all want more construction, regardless of whether those projects advance Californians’ well-being. Similarly, JPA board members, officials who select them, and Sacramento legislators gain power from evading voter approval requirements.

Anti-Proposition 53 attacks add other distortions, as well. Most notable is the complaint it doesn’t precisely define “project,” knowing that highlighting ambiguity will generate more “no” votes. Unfortunately, the greatest problem with such ambiguity is government’s ongoing efforts to weasel out of every constraint those it supposedly represents try to impose on it, amply illustrated by the bullet train saga. That is a problem of abusive government, which needs to be contained, not a reason to keep voters from having any effective power to defend themselves from its abuse.

Proposition 53 is an effort to improve Californians’ self-defense capabilities against government’s ability to impose harm on them. Those who will be better protected, and have seen through the subterfuges, back it by large margins, while opponents, who benefit even from projects that harm Californians, rely on focus-grouped, misleading claims to fool low-information voters. We can only hope that Proposition 53’s opponents have underestimated the gullibility of those they claim to serve.

Gary M. Galles is a professor of economics at Pepperdine University, a research fellow at the Independent Institute, adjunct scholar at the Ludwig von Mises Institute, and member of the FEE faculty network. His books include Apostle of Peace (2013), Faulty Premises, Faulty Policies (2014) and Lines of Liberty (2016).

A Quick Guide to the 17 State-Wide Ballot Measures

VotedI know what you’re thinking as you look at the 224-page voter guide to 17 statewide ballot propositions, and it’s not printable in a family newspaper.

Still, with California effectively under one-party rule, you and the ballot initiative are the closest thing we have to a system of checks and balances. So here’s my personal guide to help you do the job.

Yes on Proposition 54 to require that bills in the Legislature be posted online in their final form for 72 hours before lawmakers vote on them. This ends the abusive practice of slamming backroom deals into unrelated or blank bills as an “amendment,” then rushing them to the floor for a vote before anybody else can read them.

Yes on Prop. 53 to require voter approval before the state can borrow $2 billion or more for state projects by issuing revenue bonds. This affects the proposed Delta tunnels water project. Revenue bonds are repaid by charging the users of whatever they’re issued to build. If you use water, that’s you.

Yes on Prop. 52 to protect a program devised by California hospitals to secure available federal matching dollars for Medi-Cal. The hospitals pay the state to help fund Medi-Cal, which then qualifies for matching funds, and then the hospitals get most of their money back. The “most” part is the problem. Vote yes on 52 to keep politicians’ hands out of the Medi-Cal cookie jar.

On the rest, I’m voting no.

Taxes and education: Prop. 55 extends a temporary income-tax hike on high-earners until 2030, but the school budget crisis is over, and a top state tax rate of 13.3 percent makes California uncompetitive with other states for the small businesses that create most of the jobs in America. Prop. 51 soaks taxpayers for $9 billion plus interest to build schools so new-home developers can escape higher fees. Prop. 58 repeals the 1998 “English for the Children” initiative and reinstates bilingual education, and it could lead to some students being automatically enrolled in bilingual classes even if parents don’t request it or want it.

Criminal justice: Prop. 57 empowers state prison officials and parole boards to release many state inmates early, regardless of enhanced sentences. Prop. 62 abolishes the death penalty. Prop. 66 changes death penalty procedures to limit and speed up state appeals.

Substances and drugs: Prop. 56 puts a $2 tax on cigarettes and extends tobacco taxes to vaping products. Prop. 64 legalizes recreational marijuana, but it also launches a massive new state bureaucracy to regulate, track and tax every plant from seed to sale, and it’s still illegal under federal law. Prop. 61 orders some state agencies to pay no more for prescription drugs than the price paid by the U.S. Department of Veterans Affairs, likely leading to pre-discount price hikes. …

Click here to read the full article from the L.A. Daily News.

Decision Time for Brown’s Big Water Project

As reported by U.S. New and World Report:

CLARKSBURG, Calif. (AP) — Atop a dirt levee his great-grandfather built in the 1800s to hold back California’s mightiest river, Northern California farmer Russell van Loben Sels looks out over the site of a new water project, one that would be the state’s most ambitious in a half-century.

Promoted by Gov. Jerry Brown, the $15.7 billion project would run giant twin pipes, each four stories high, underground for 35 miles and eventually pull thousands of gallons of water a second from the stretch along the Sacramento River where van Loben Sels farms to cities and farms to the south.

In what all agree will be the decisive year for the project, Brown’s plan — which is facing obstacles to environmental approval in the Sacramento-San Joaquin River Delta and mounting uncertainty over the financing — is splitting farmers and political leaders.

In the delta, a land of tree-lined river banks, pear orchards and Gold Rush-era Victorian homes, signs saying …

Click here to read the full story

Brown’s Big Projects Renew North/South Rivalry in CA

Delta TunnelsCalifornia’s historic north/south rivalry appears to be writing a new chapter over Gov. Jerry Brown’s proposed big legacy projects: the bullet train and delta tunnels.

The rivalry is sure to heat up over both a report that the California High-Speed Rail Authority is reconsidering running the bullet train route north to San Jose before heading south to Burbank as was originally planned, while efforts intensify to stop the tunnels and prevent more water flowing south.

In the Los Angeles Times account of the possible switch of the rail plan, reporter Ralph Vartbedian noted, “With the project already behind schedule and facing estimates of higher costs, the Bay Area option could offer a faster, less risky and cheaper option. Getting even a portion of the project built early would help its political survival.”

The key phrase here is “political survival.” The train is facing mounting pressure from citizen lawsuits, financial uncertainties, and flagging support from the general public. Suggested routesfor the train from the Central Valley to the San Fernando Valley have run into hot resistance. There is urgency for the authority to get something done, to get the project up and running so that it would seem imprudent and unreasonable to stop it.

Yet, the threat to undo the project is there. A ballot measure redirecting bullet train money to water projects is in the offing and the idea enjoys some support in a recent poll — certainly more support than the train itself has seen in polls.

While plenty of Californians — north and south — object to the bullet train being built at all, Southern California transportation advocates are incensed at the possible change in plans favoring the north.

Meanwhile, the other big Jerry Brown legacy project, the delta tunnels, to bring water from the Sacramento-San Joaquin delta to the central and southern parts of the state is also facing opposition.

An initiative already qualified for the ballot would require voter approval of revenue bonds over $2 billion. There is no secret the proponents of this measure are taking aim at a major revenue source to build the tunnels. Revenue bonds, unlike General Obligation bonds that are backed by taxpayers, do not require a vote and are paid by the users of a development. Revenue bonds are considered to be part of the financing structure for the delta tunnels.

Some northern California legislators propose having voters decide if they want the tunnels. Many supporters of the idea think a statewide vote would scuttle the project.

Nearly 35 years ago an effort to construct a peripheral canal to bring water from the delta south was defeated at an election. Southern voters supported the canal but it was overwhelming rejected by voters in the north.

Which brings up important differences in the north-south rivalry.

Despite Southern California being the home of a larger proportion of the electorate, northern Californians vote in greater percentages. That gives the north a political advantage. One reflection of that advantage can be seen in those who hold statewide offices. Of the eight statewide elected constitutional offices, all are filled by northerners except for Treasurer John Chiang.

Like professional sports teams — think Giants and Dodgers – public policy too can produce bitter rivalry and loyal supporters by dint of geography.

Originally published by Fox and Hounds Daily