On November 5, voters across Texas will go to the polls to cast ballots for a variety of local elections and statewide ballot propositions. Looming largest on the ballot will be Proposition 6 which would raid the state’s Economic Stabilization Fund (ESF), also known as the Rainy Day Fund, to pay for the newly created State Water Infrastructure Fund for Texas (SWIFT). In a guest column for Texas Weekly, Debra Medina explains why it’s a bad idea that voters should reject. Arlene Wohlgemuth details alternative options for legislative consideration.
Medina argues:
Prop 6 does create a new water infrastructure bank. Voters are rightly leery of government banks, especially one hidden behind an appointed board. In creating the State Water Infrastructure Fund for Texas (SWIFT), the Texas Water Development Board will be able to provide debt service, deferred loan structures and credit enhancement for loans funded by the board. In plain language, SWIFT funds only help pay the interest on loans. Funding for projects must come from Texas Water Development Board loans which were authorized back in 2011 but remain on the shelf. There is no doubt investment bankers, lawyers and financial advisors are salivating at the chance to get their hands on $2 billion. Unfortunately, while SWIFT may benefit a few political insiders, it won’t do anything to address the growing need for water infrastructure in Texas.
Read the whole thing here.
Earlier this week, Arlene Wohlgemuth of the Texas Public Policy Foundation echoed similar sentiments in the Austin American-Statesman. While Wohlgemuth did not make a vote recommendation on Proposition 6, she outlined specific issues that the Texas Legislature must address to effectively provide water security for the state without raiding the ESF.
But while Texas’ water challenges are real, they cannot be solved simply by spending more money. If Texas wants to see why water projects aren’t going forward, it needs to look not only at funding but also at regulatory impediments.
Regulation of water in Texas is a Byzantine mix of Spanish, English and statutory law. Groundwater is recognized both constitutionally and by state statute as being a vested property right of the landowner. Surface water, by contrast, is officially owned by the state. Yet individuals and public entities hold surface water rights for specific beneficial uses (the right to divert a particular volume of water from a water course), which are themselves a form of vested property right, and may be bought and sold. In cases where there is insufficient water to meet all existing water rights, rights are given priority based on the date they were issued, with older (or more “senior”) rights given priority.
The process of selling a water right, however, can involve a lot of bureaucratic red tape. Texas contains 23 major river basins, with eastern Texas having comparatively more water and West Texas having less. Interbasin transfers have traditionally been a means of dealing with droughts or other water shortages by moving water from areas where it is plentiful to places where it is scarce. In 1997, however, a “junior rights” provision was added to the Texas Water Code requiring that any portion of a water right involved in an interbasin transfer would lose its seniority. This has proven to be a major disincentive for new transfers.
In addition, the Legislature has, perhaps inadvertently, passed legislation which complicates — rather than facilitates — new water supply projects. Senate Bill 2 in 2001 and House Bill 1763 in 2005 enlarged the authority of groundwater conservation districts to limit private development of groundwater. In 2007, SB 3 established a multi-layered process leading to the Texas Commission of Environmental Quality’s adoption of environmental flow standards. Water supply projects based on development of groundwater and new surface water right permits are delayed by these new groundwater and environmental flow statutes.
Read the whole thing here, or here if you don’t have access beyond the Statesman’s pay wall.
Both pieces are worth reading in their entirety to give voters a look at the other side of the well told and well funded Pro Prop 6 story.