November 7, 2006 Ballot Prop. 84

Proposition 84 (Safe Drinking Water, Water Quality and Supply, Flood Control, River and Coastal Protection Bond Act of 2006) would authorize California to sell $5.4 billion in general obligation bonds to pay for water safety and supply projects, as well as for natural place preservation.

Drinking water, water quality, water supply, flood control and park and natural resource preservation are among the areas for which the measure would fund improvements. Backers of the proposal believe that current funding for critical water infrastructure is very low. They believe that Proposition 84 will provide easier access to safe drinking water, more effective flood protection, and environmental protection for coastlines, lakes and rivers.

Opponents say that special interests are backing the proposition and will receive taxpayers' funds without being accountable for them. They also believe Proposition 84 will ultimately result in significant tax hikes for California residents.

Background

Water supply and safety are currently funded through a variety of state programs. These programs fund facility improvements for public water systems and provide money for flood control construction and repair projects. The state also provides grants and low interest loans to local agencies for water conservation and water treatment projects. The state also operates the state park system which administers maintenance and operation of local and regional parks. All of these programs receive money from the state general fund, federally mandated funds, and voter supported general obligation bonds. Currently, $1.4 billion remains from general obligation bond funds for new water system renovation projects. With a view toward the August 2005 Hurricane Katrina disaster, the California legislature recently passed additional funds for levee repair and flood control systems. A total of 25 million new California residents are expected by 2040, and this has raised the demand for water supply and natural place renovation.

Bond fund allocations:Proposition 84 would allow the state to sell $5.4 billion in general obligation bonds for water and natural resource maintenance and improvements. According to the State Legislative Analyst's Office, the state would most likely pay off the interest and principal over a period of 30 years. The cost would depend upon the interest rates at the time the bonds are sold. With the current interest around 5%, the future interest payment on the bonds will be around $5.1 billion. The principal and interest would come to a total of about $10.5 billion. Therefore, the state would likely be paying $350 million per year.

• $1.5 billion would be spent on water quality programs that would provide safe drinking water, agriculture and Delta water treatment, and regional water management.
• $928 million would be spent on conservation projects to restore and renovate major California rivers, urban streams, and Delta and coastal fisheries. Some of these funds would pay for improved access to regional conservancies. A portion of these funds would also go for stormwater pollution prevention.
• $800 million would be used specifically for flood control projects. The funds would go towards evaluation and improvements of the Flood Corridor Program. The Delta would receive a portion of these funds for flood control. Local flood control measures and floodplain mapping would also be funded.
• $580 million would be spent on maintenance of local and regional parks, water conservation and energy conservation in urban water settings, and for incentives for conservation in communities.
• $540 million would be used to improve protection of specific watersheds and coastal areas. These funds would also be used to fund the Clean Beaches Program and the California Ocean Protection Trust Fund.
• $500 million would be spent on state park system improvements. Park lands would be bought and developed and existing land would be restored. Some of these funds would also be spent on nature education programs and new research facilities.
• $450 million would be used for forest and wildlife conservation. Funds would be spent on improving protection for wildlife habitats, improving protection of farms and ranches, and conserving forests.
• $65 million would be spent on water planning statewide. This includes planning for the needs of future water users, future water transport systems and flood control projects of the future.

Proposition 84 would allocate unspecified funds for land acquisition by the state for conservation and water supply uses. It also provides for independent audits to insure that proposition funds are spent correctly.

Arguments For and Against

Supporters of Proposition 84 believe that California's coastlines, natural places and water supply systems are in need of serious renovation and new development in light of a rapidly rising population. Proposition 84, they believe, would provide much needed levee improvement and water quality protection for future Californians. Opponents argue that there would be no accountability for the money that would be spent if the measure became law. They also object that the measure contains no provision for new water storage projects, such as dams and reservoirs.

Proponents of the measure say that Proposition 84's renovation of the state's parks, coastlines, rivers and lakes are crucial components of the state's tourism dollars. Finally, they point to the fact that Proposition 84 provides for a finance committee responsible for oversight of the funds. Proponents of the proposition come from nature conservancy groups, officials from California water districts, and health and safety advocates.

Critics of Proposition 84 say that the measure was put on the ballot by special interests who are interested in taxpayer money for illegitimate projects. They claim that the proposition is too large and that it provides funds for frivolous areas of development while ignoring the creation of water dams or water storage facilities. Opponents also think that bond repayment will require the state to raise taxes on Californians. They maintain that water supply and natural place projects should be funded at the county and city level. Critics of the proposition come from the anti-tax community and small government advocates.

Arguments For and Against

Proponents of Proposition 1C say that it will provide much needed shelter for thousands of citizens who cannot afford housing. They cite statistics that find that there are hundreds of thousands of homeless people in the state that cannot access shelter each night. They also point to thousands of battered women and their children who were turned away from shelters last year. Proposition 1C, proponents argue, would provide new jobs to administer the programs and new housing for target risk groups. They claim that the costs would be paid from the general fund, money supplied from tax dollars already spent by California residents. Supporters of Proposition 1C come from members of the business community, homeless and battered women advocacy groups, and senior citizens and youth organizations.

Opponents of Proposition 1C claim that it will add debt and bureaucracy to California's already stumbling economy. They say that the Proposition will barely touch the housing crisis and will instead enable the state to help only a small minority. Critics claim that Californians will actually have to pay an additional $600 in taxes over the life of the bond. Furthermore, they contend that future generations will be saddled with years of debt. Opponents blame the housing affordability issue on government interference in the form of over regulation of the housing industry, environmental lawsuits and high fees on private industry. Opponents largely come from anti-tax groups and members of the business community.

Official Voter Information

Voter Information Guide

Water Quality, Safety and Supply
Analysis by California Legislative Analyst, 2006

Individual Campaign Committees
Total Contributions and Expenditures
(select "Nov. 2006 election" and "Prop. 84" in dropdown boxes)

Key Websites and Links

California Taxpayer Protection Committee
Opposes Prop. 84 
[Website archived in UCLA Online Campaign Literature Collection] 

Yes on Proposition 84
[Website archived in UCLA Online Campaign Literature Collection]

Public Opinion

Majorities of voters appear ready to approve the state's infrastructure bonds (Props. 1B, 1C, 1D and 1E).Field Poll, Release 2219, Nov. 4, 2006.

Baldassare, Mark.
PPIC Statewide Survey: Californians and the Future, Public Policy Institute, October 2006.

Continuing negative job appraisals of the Governor and the legislature, despite initial support for infrastructure bonds. Field Poll, Release 2201, June 5, 2006

Voters are supporting four of the five bond proposals on the November ballot, although not by overwhelming margins. Field Poll, Release 2206, July 28, 2006

Baldassare, Mark
PPIC Statewide Survey: Californians and the Future, Public Policy Institute of California, August 2006

Reports and Studies

Smith-Heisters, Skaidra; Summers, Adam B. 
Analysis of California's Proposition 1E and 84: Funding the state's water and flood control infrastructure. Sept. 2006, Reason Institute.