3. WATER: Calif. budget talks offer last gasp this year for $9B bond (Greenwire, 09/04/2008)

Colin Sullivan, Greenwire reporter

SAN FRANCISCO -- California's budget crisis has left a $9 billion water bond from Gov. Arnold Schwarzenegger (R) and Sen. Dianne Feinstein (D) off the November ballot and possibly dead for the year, said observers here with a close eye on the political process in Sacramento.

The bond, which would fund new dams and water conveyance systems in the state, had until this week to win enough support from the Legislature to appear on the ballot. But the regular session ended without action on that front, leaving a special election and a budget deal as the only options to proceed this year.

"The immediate pressure is off," said Steve Evans, conservation director at Friends of the River. "The secretary of state has said categorically that it's too late to put it on the November ballot."

"Basically," he added, "the ballots have been mailed out."

The failure of the bond comes as a surprise given the heavyweights behind the drive to let voters weigh in. But the politics of a budget crunch, and the ensuing state job cuts ordered by the governor, ultimately overcame the reality of a water crisis brought on by widespread drought conditions.

In other words, the bond had to play second fiddle to the budget this summer as teachers, labor unions and state employees hammered lawmakers about funding for new projects. At the same time, an emergency September session called to work toward a budget compromise to fund the state government for the next fiscal year could still put a water provision before the public in a special election, assuming the voters have to approve budget items such as new spending authority for the governor.

The bond, then, could survive as a rider to the budget package, if Democrats and Republicans reach a deal they have to put before voters. A special election would occur sometime after the November election, if necessary.

"It is conceivable," said Doug Obegi, a staff attorney at the Natural Resources Defense Council, "but it's really hard to tell what's going to happen."

'It's not pretty right now'

The latest iteration of the water ballot measure was floated by state Assemblyman Jared Huffman, a Democrat from Marin County who once worked as a senior attorney at NRDC. Huffman's attempt at compromise (dubbed "8xx" for the second emergency session) would cost more than the governor's proposal, at $9.8 billion, according to an analysis by the California Legislative Analyst's Office.

Given the bond's cost, the voices of the usual detractors from within the environmental community, many of them opposed to new dams, have been overwhelmed by a louder sense of outrage from the California Teachers Association, the California Faculty Association and the Service Employees International Union, all of which view the water bond as a giant waste of money.

Representatives from those groups testified at a hearing last week on Huffman's proposal, slamming it as bad policy given the heavy debt in California.

The groups, Evans said, "were astounded it was presented as a compromise. It isn't much different than the last bond put out by the Republicans."

So even though the Nature Conservancy and NRDC have split with other environmental groups in favor of the measure, the escalating opposition from an arguably more powerful constituency appears likely to sink the water bond. The groups want the state government to use unspent money from previous bonds and not pass new measures.

"It's not pretty right now," admitted Obegi, adding that NRDC also supports more aggressive conservation efforts and water rationing.

For Schwarzenegger, the water issue hasn't exactly faded from view, but the speculation points to his office not spending much political capital on the issue. The matter should come back into view today, when Lester Snow, director of the California Department of Water Resources, holds a summit in Sacramento with senior officials from the federal Bureau of Reclamation and other resource agencies in California.

Snow is expected to discuss the drought conditions and proposed conservation measures with the media after the summit.

High-speed rail makes the cut

Another prominent proposition with an environmental theme did make the ballot, as high gas prices and energy concerns helped to place before the voters a bond measure to build a high-speed rail link between Northern and Southern California.

Proposition 1A, the "Safe, Reliable High-Speed Passenger Train Bond Act," would authorize $9.95 billion in bonds to get the ball rolling on a 700-mile rail link to connect dense population centers in Los Angeles and the Bay Area. The total cost is expected to eclipse $40 billion, much of it funded by private investors.

The measure's inclusion on the ballot follows a recent decision by a California planning agency to approve a route through the Pacheco Pass to the south rather than the Altamont Pass to the north (ClimateWire, July 10).

Also moving is Proposition 7, a ballot measure to increase the renewable power mandate in California. Utilities have already spent millions to stop the measure, but a billionaire family from Arizona appears likely to counter the investment (Greenwire, July 29).

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