How can we fund California’s most pressing water needs? And where are we falling behind in paying for a water system that works for all? A hearing convened by the Senate Natural Resources and Water Committee yesterday looked at these and other questions. I joined other speakers from nonprofit groups focused on water, local governments, and water agencies to discuss these challenges and how to address them.
Lester Snow, executive director of the California Water Foundation, set the stage, stating that California is “falling behind in central water resource investments, especially in terms of public health and climate adaptation.” Investing in watershed health and ecosystems will help our water supply and our ability to weather climate change, he noted.
My testimony focused on the need for adequate funding to ensure the long-term success of our water system. In some areas—such as water supply and wastewater treatment—we’re doing fairly well in keeping up with needed investments. As documented in our report What If California’s Drought Continues?, investments in water supply for cities and suburbs helped us weather the current drought. It will be important to maintain the momentum in those areas. But in other key areas, we’ve found significant funding gaps, including safe drinking water in many rural areas, ecosystem management, stormwater management, and flood protection. The total annual funding gap for these “fiscal orphans” is roughly $2–$3 billion.
Local governments have the most responsibility when it comes to funding water systems. But there are looming concerns—including rising costs to address aging infrastructure and new treatment standards—and more uncertainty about the ability of local agencies to raise rates to cover them.
The state’s funding mechanisms “remain fundamentally unchanged,” Snow noted, even as California strains to meet various needs for water. I noted that California must go beyond water bonds, which at best provide $1 billion per year in support, to create the sustainable funding we need for this essential service.
Snow and I both spotlighted how efforts intended to improve accountability have made it more complicated to fund water systems locally. Three constitutional reforms passed by voters since the late 1970s—Propositions 13, 218, and 26—changed the way Californians pay for water services. These measures have made it more difficult for agencies to raise money locally for water infrastructure and services.
Laurel Firestone, co-executive director of the Community Water Center, talked about the many challenges facing California’s rural poor and underserved communities, where access to safe and reliable drinking water has been a particularly challenging problem in recent years.
Addressing our ability to provide a safe water supply for the poor, enable local water providers to charge appropriate water rates to cover needed investments, and maintain healthy watersheds and ecosystems are some key areas where change is needed. In January, a second hearing by this committee will look more closely into scaling up solutions for meeting these challenges.
View slides from Hanak’s presentation
Read the PPIC Water Policy Center’s briefing on paying for water
Read the in-depth PPIC report on water system funding
PPIC:
Even though raw scores have declined, once we adjust for the increased share of graduates taking the SAT, the latest scores represent an improvement from a decade ago. On average, California’s graduating class of 2015 scored 1,492 out of 2,400 points on the SAT college admission tests—28 points lower than a decade ago, and 2 points higher than the national average. However, once we factor in the increase in participation over the past decade, California’s 2015 score actually represents an improvement compared to a decade earlier. As participation in the SAT increases, the mix of students taking the exam shifts towards those less academically prepared. In states with high average SAT scores, participation rates are very low, because the only students who participate tend to be very well prepared. On average, a 1 percentage point increase in participation is associated with a 3.4 point decrease in average performance. Given the 11 percentage point increase in participation among California high school seniors over the past decade, we would expect the state’s average SAT score to drop 10 points more than it did.
Latino students have experienced the largest increase in SAT participation.
Parental education level, family income matters more now.
Proposition 47 helped bring down the prison population by about 8,000 inmates, below the mandated target of 137.5 percent of design capacity (the number of inmates that facilities were designed to house). The target was set by a federal court in 2009 in the wake of lawsuits over prison conditions; at the time, it meant a reduction of almost 40,000 prisoners. The prison population has remained below the target since January 2015. This is a key requirement for the state to regain control of prison health care, which is currently overseen by a court-appointed receiver. The total prison population has dropped by slightly more than 45,000 inmates since it peaked in 2006. 
As we noted above, reports of increased crime in a number of cities and counties in 2015 have fueled concerns about the impact of these population reductions. Between January and August, violent crime in Sacramento was up by 24 percent compared to the same months in 2014. In Riverside County, violent crime was up almost 11 percent in the first six months of 2015. In the City of Los Angeles, it was up almost 21 percent in the same time period.