Proposition 3

Water Supply and Quality Act


BALLOT LANGUAGE:

Authorizes $8.877 billion in state general obligation bonds for various infrastructure projects: $3.03 billion for safe drinking water and water quality, $2.895 billion for watershed and fisheries improvements, $940 million for habitat protection, $855 million for improved water conveyance, $685 million for groundwater sustainability/storage, and $472 million for surface water storage/dam repairs. Appropriates money from General Fund to pay off bonds. Requires certain projects to provide matching funds from non-state sources; gives priority to disadvantaged communities.

 

OVERVIEW:

The Water Supply and Quality Act of 2018 would issue $8.9 billion in general obligation bonds to fund projects and programs that will address six broad categories: watershed lands, water supply, fish and wildlife habitat, water facility upgrades, groundwater, and flood protections. Funding by broad category is allocated as follows:

  • Watershed Lands: $2.5 billion
    • $250 million for Sierra Nevada Mountains
    • $200 million for Salton Sea
  • Water Supply: $2.1 billion
    • $500 million for cleaning up rainwater
    • $500 million for cleaning up drinking water
    • $400 million recycling waste water
  • Fish and Wildlife Habitat: $1.4 billion
    • $400 million Central Valley for native fish protections
  • Water Facilities Upgrades: $1.2 billion
    • $750 million repairing Madera and Friant Kern canals
    • $200 million repairing Oroville Dam
  • Groundwater: $1.1 billion
  • Flood Protection: $500 million

The proposition addresses approximately 100 subcategories related to water and environmental projects.

Bond funds would be continuously appropriated to over a dozen different state departments, which enables the departments to automatically receive funds when they are ready to spend them. The majority of these funds would be transferred from state departments to local government agencies, Indian tribes, non-profits and private water companies as grants for specific projects. Grant recipients would have to provide an equal matching fund for the state dollars, except in disadvantaged communities.

Prop 3 also includes a provision that modifies the GHG Fund spending, and stipulates four water agencies, including the Metropolitan Water District of Southern California, receive a portion of these funds. Water agencies would be required to spend funds on programs like water conservation.

In 2014, voters approved Prop 1, a $7.12 billion water bond placed on the ballot by the Legislature. Gerald Meral was deputy secretary at the CA Natural Resources Agency at the time, and modeled this measure after the 2014 effort. To date, 86 percent of Prop 1 funds have been allocated.

 

Fiscal impact

The bond would be paid off over a period of forty years, with an average annual payment of $430 million years. Including debt service the LAO projects the total cost to pay off the bond and principal will be $17.3 billion.

 

Arguments in support:

  • Reduced cost to local governments for water projects
  • Funding to implement Sustainable Ground Water Management Act
  • Additional funding to water districts, including MWD, for conservation programs
  • Funding to San Gabriel, LA River and Santa Monica Mountains for watershed improvements
  • Funding for repairing Oroville Dam Spillway

 

Arguments in opposition:

  • Voters approved Prop 68 Parks, Environment and Water Bond in June 2018 that issued $4 billion in general obligation bonds for park and water projects
  • Wasn’t written by the Legislature
  • Funds are continuously appropriated, not legislatively appropriated
  • Adds to state’s debt service

 

Supporters: CalChamber, Metropolitan Water District, Silicon Valley Leadership Group, Valley Industry and Commerce Association, BizFed, John Cox (GOP candidate for Governor), Senator Dianne Feinstein, TreePeople, Association of CA Water Agencies (ACWA)

Opposition: Sierra Club

Supporters have raised $2.79 million, there is no registered opposition to date. A recent PPIC poll shows likely voters support the initiative by a 58-25 percent margin. Its support crosses party lines and regions. Nearly a fourth place drought and water storage at the top of environment-related concerns, ahead of air pollution and climate change.

 

RECOMMENDATION: SUPPORT Local governments and water districts will have access to funds for projects they planned to pursue regardless of available funding, which would be realized as lower costs to local governments for water projects. Additionally, the plan would provide