Wednesday, November 4, 2009

Legislature Passes Water Package

The $11 Billion general obligation bond is disapointing, and I expect there is a high probability that it will be defeated by voters next fall. Even if the state was in better fiscal health, I would still be oppossed to the bond as a matter of policy. The vast majority of the costs in this bond (whether dams or environmental mitigation costs) should be paid by water users, not general taxpayers.

Passing the bond is approving a government subsidy for consuming a scarce resource whose supply causes environmental damage. The subsidy keeps prices artficially low and discourages conservation. Similar subsidies for Central Valley Project water are largely to blame for the mess we are in now.

If anything water consumption should be taxed, not subsidized. Forcing water exporters to pay environmental mitigation costs in addition to the cost of the supply infrastructure is essentially equivalent to a proper tax.

My thoughts on the governance package are complex and incomplete, and I am unsure of the details of the final package. I can say that I am disapointed in the process, the make-up of the 7 member Delta council, and I am very disapointed that the peripheral canal is still not being subjected to a proper cost-benefit analysis. It isn't mine or anyone elses preferred bill, that's part of political compromise. Is it an improvement on the status quo? I don't know.

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