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Prop. 1E's Blank Check Primed for Pork, Not Flood Control

California using a pre-Katrina mindset

Skaidra Smith-Heisters
November 1, 2006

Even though we aren't in hurricane country the tragedy of Hurricane Katrina is being used to sell voters on Proposition 1E, the initiative that would borrow $4.1 billion for flood control.

Here in California, the big fear is an earthquake destroying levees or old-age causing them to give it out in the not-too-distant future.

The areas at biggest risk are the Central Valley and the Sacramento-San Joaquin Delta region. If a major flood were to occur in the Delta, all of the state's taxpayers would be liable for the damages. That's a huge liability, and it only grows bigger every year, as valley soils sink, 100-year-old levees erode, and population and development of Central Valley floodplains below sea level continue to increase.

But that doesn't mean Proposition 1E is up to the task of completing the necessary repair, or is the right tool for the job.

Prioritization is also what's missing in Proposition 1E. The bond doesn't describe what projects it will fund. State Assembly Budget Chairman John Laird (D-Santa Cruz) explained this lack of detail by saying, "Some of us would have liked to have seen many other decisions taken in tandem with this, but many lawmakers felt it was more important to get the bond out there on the ballot and take advantage of a rare window of public awareness because of the Katrina disaster."

Taxpayers should be worried about handing Sacramento a $4.1 billion blank check. It's likely that this after-the-fact budgeting will favor politicians' pet projects and not the state's most pressing infrastructure needs´┐Żafter all, we've approved over $11 billion in water and resources bonds in California in the last 10 years, and clearly very little of it has gone to strengthen our levees or water supply.

The anticipation that Proposition 1E funds will be divvied up to reward favorite constituencies is so great that political leaders have reportedly advised voters in Yuba and Sutter counties that if they don't vote for Proposition 1E, the counties won't get a piece of the pie if the measure passes.

Yuba County Supervisor Dan Logue wants his region's voters to pass 1E because if they don't, he's worried Sacramento will say, "Didn't you guys just tell us to go to hell?"

Playing favorites is no way to rebuild critical infrastructure. And bond financing, the most expensive way to fund projects, isn't the way to pay for it. The bonds will cost taxpayers nearly $2 for every $1 borrowed, meaning 1E's total price tag will be around $8 billion. That might be enough to repair the entire levee system, according to the Department of Water Resources, which has estimated costs between $7 billion and $12 billion. Unfortunately, because $4 billion of those Proposition 1E funds go directly to bond tradesmen and investors in the form of interest, and another approximately one billion dollars are earmarked for assorted projects outside of the Delta flood control system, taxpayers will surely be asked for more funds for levee repair decades before this bond is paid off.

After Hurricane Katrina, plans for the rebuilding of New Orleans emphasized the need to decrease reliance on levees as a primary protection for lives and property. When it comes to Prop. 1E, Gov. Arnold Schwarzenegger's plan to "rebuild" California is trapped in a pre-Katrina mindset. We don't need to rebuild the Central Valley flood and water infrastructure, along with its rich history of backroom deals and political power grabs. We need to reinvent it, with strong local measures that spend money based on need and priorities, provide backup drinking water sources and put a stop to the subsidization of poor development choices that spring from voters continually handing state lawmakers more bond money.

Skaidra Smith-Heisters is a policy analyst at Reason Foundation and author of a report on Proposition 1E, Funding the State's Water and Flood Control Infrastructure. She can be reached at Skaidra@Reason.org.


Skaidra Smith-Heisters is Policy Analyst


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