Thursday, October 2nd, 2014

Perry-O-Meter

Fund state water plan


"On the water side, I sincerely believe that the 82nd Legislature must finally execute our state’s water plan to help meet a demand that is expected to grow 18 percent over the next 50 years as our population doubles. Some might call the current price tag steep, but we must invest soon to avoid a water crisis in the not too distant future."


Updates

Lawmakers revive Broken water-plan promise

In August 2010, Gov. Rick Perry told the West Texas Legislative Summit he was intent on funding the state's plan to ensure long-term water supplies.

"On the water side, I sincerely believe that the 82nd Legislature,” convening in 2011, "must finally execute our state's water plan to help meet a demand that is expected to grow 18 percent over the next 50 years as our population doubles,” Perry said. "Some might call the current price tag steep, but we must invest soon to avoid a water crisis in the not too distant future.”

After the 2011 Legislature took minimal action toward expanded funding of water projects, we rated this gubernatorial vow as a Promise Broken (see below).

But during the 2013 legislative session, Perry refreshed his call to fund the plan, which presents a long-term vision of projects desired within various regions of the state. In response, lawmakers agreed to present voters with a proposed constitutional amendment that would, if approved at the polls in November 2013, establish loan funds to back projects supported through the plan.

In his Jan. 29, 2013,State of the State Address, Perry urged members to withdraw $3.7 billion from the state"s rainy day fund to invest in "critical water and transportation systems across our state.” That fund, formally called the Economic Stabilization Fund, was approved by voters in 1988 and accumulates money from shares of oil and/or gas production taxes; it also receives half of any unencumbered state revenue--unspent dollars not reserved for a specific purpose--at the end of every two-year budget period.

Lawmakers ultimately settled on the proposed constitutional amendment, Senate Joint Resolution 1, which would launch the State Water Implementation Fund for Texas and the State Water Implementation Revenue Fund "in order to assist the Texas Water Development Board in providing low-cost financial assistance to local and regional water providers for projects” listed in the 2012 version of the water plan, according to a summary of the proposal by its author, state Sen. Tommy Williams, R-The Woodlands.

"The fund is intended to provide adequate and meaningful funding through financial assistance and other incentives in the development of new water supply strategies outlined in the” plan, the summary says, "as identified and requested by regional planning groups across the state of Texas.”

Related legislation, House Bill 4, signed into law by Perry on May 28, 2013, spells out how a revamped Texas Water Development Board is to oversee the funds and prioritize individual water projects. Also, the 2013 Legislature approved House Bill 1025 providing for $2 billion to flow from the rainy day fund to the water funds laid out in the proposed constitutional amendment. As of late May 2013, Perry had yet to act on this measure.

Upshot: The state could soon have a funding stream dedicated to the water plan, though given that voters still hold sway, we are changing our rating of this Perry promise to a Compromise.

Sources:

State-of-the-state speech, Gov. Rick Perry, "Tax Relief, Infrastructure and Education: Priorities to Keep Texas Strong," Jan. 29, 2013

Proposed constitutional amendment, Senate Joint Resolution 1, 2013 Legislature, proposed to voters on Nov. 5, 2013 ballot

Legislation, House Bill 4, approved by 2013 Legislature and signed into law by Gov. Perry; HB 1025, approved by 2013 Legislature and awaiting gubernatorial consideration (accessed May 31, 2013) 

Lawmakers tiptoed on funding water plan

In August 2010, Gov. Rick Perry told the West Texas Legislative Summit he was intent on funding the state's plan to ensure long-term water supplies.

"On the water side, I sincerely believe that the 82nd Legislature,” convening in 2011, "must finally execute our state's water plan to help meet a demand that is expected to grow 18 percent over the next 50 years as our population doubles,” Perry said. "Some might call the current price tag steep, but we must invest soon to avoid a water crisis in the not too distant future.”

A refresher: As pointed out by Dallas Morning News opinion columnist William McKenzie in an April 3, 2012, column, the plan, revised every five years, "contains strategies for such goals as conserving water, building desalination projects, managing aquifers and planning reservoirs. But,” McKenzie said, "the strategies have no financing stream. Unlike how Texas pays for its roads, through dedicated gas taxes and now tolls, the state has no revenue source devoted to water supplies.”

According to the 2007 version of the plan, in place when Perry made his call, some $1.7 billion would be needed in state financing to help cover the costs of projects across the state through 2020, though the plan said lawmakers could cover the state's share of related debt costs by appropriating about $675 million through 2028.

So, was there progress in the 2011 legislative session?

Not a lot.

We found no newspaper stories on Perry pushing to fund the plan during the session; the word "water” did not appear in his nearly 4,900-word Feb. 8, 2011, "State-of-the-State” address, a biennial opportunity to advocate legislation..

A June 9, 2011, Austin American-Statesman news article summarizing the just-completed session closed: "Looking far ahead, 2013 could be a water session, as questions about how to resolve impending problems of population increase and water demand ultimately went unanswered in the 2011 session.”

Yet lawmakers and Perry had agreed to a slight bump in state financing, American-Statesman reporter Farzad Mashhood wrote in a Jan. 5, 2012, blog post quoting the 2012 version of the plan saying that the 2011 Legislature approved funding to finance approximately $100 million in water-plan projects.

The latest state water plan, finalized in January 2012, pegs its projected costs through 2060 at $53 billion, a  figure that sweeps in estimated costs from state and local sources for design, construction and implementation of hundreds of projects that leaders in 16 regions consider necessary to meet water supply needs. The state's estimated share of that financing is listed as nearly $27 billion, though legislative appropriations to help cover related debt costs would be much less than that.

Besides, there's a more short-term state financing amount in the plan of $15.7 billion, which reflects what regional leaders say they need from the state to help cover the costs of water-supply projects they say they need to meet water needs through 2019, the 2012 plan says.

Melanie Callahan, executive administrator of the Texas Water Development Board, told us in a telephone interview that the board has not calculated how much lawmakers would need to appropriate to cover the state's debt costs linked to that financing. She said that would depend on whether lawmakers hew to bonding as a funding method or embrace another approach such as a fee generating money for water projects.

We speculated that if bonding ends up being the chosen approach, lawmakers would need to appropriate about $320 million every two years over 20 years to support sufficient financing. Callaway said that could be right.

Callahan said that in the 2011 session, lawmakers authorized the issuance of up to $200 million in additional bonds for water projects. She said, though, that the agency's request for $17.6 million in funding to cover the state's related share of debt costs on the authorized bonds was set at $8.8 million by revenue-strapped lawmakers -- leaving the board able to cover $100 million in additional bonding for now.

According to the board, nearly $1.7 billion in state financing was authorized toward water plan projects by lawmakers in the 2007, 2009 and 2011 legislative sessions; some $980 million of that had been issued as of April 4, 2012, the agency told us.

Put another way, lawmakers and Perry have signed off on the state covering 11 percent of its estimated $15.7 billion share of the plan"s costs through 2019.

Asked if Perry's vow to fund the water plan was fulfilled, his spokeswoman, Catherine Frazier, said by email that Perry has worked towards funding the plan and has talked about doing so in the 2013 session. She noted the legislative funding decisions of the last three regular sessions and voters" approval of a November 2011 ballot proposition authorizing the water development board to apply up to $4.3 billion in additional state-backed bonds toward water, wastewater and flood control projects -- meaning aid not limited to water-supply projects.

Frazier called the water plan is a "work in progress and one that will require funding over several (legislative) sessions to be accomplished.”

Our ruling

Perry said the plan should be funded by the 2011 Legislature, despite its price tag. A driblet of plan-related funding passed into law. We're marking this a Promise Broken.

Sources:

Austin American-Statesman, "Salsa Verde” news blog, Farzad Mashhood, "Is the State Water Plan unfunded? No," Jan. 5, 2012

Emails (excerpted), responses to PolitiFact Texas, Catherine Frazier, deputy press secretary, Governor"s Office, Austin, July 7, 2011 and March 20, 2012

William McKenzie, Dallas Morning News, blog post, "Is ignoring Texas' water needs really best for the state?" May 26, 2011; op-ed column, "Texas" water needs require Perry"s leadership," April 3, 2012

Telephone interview, Melanie Callahan, executive administrator, Texas Water Development Board, April 4, 2012

Texas Water Development Board, report, "Water for Texas, 2012 State Water Plan," Jan. 5, 2012 (downloaded April 3, 2012); chart, "State Water Plan Appropriated Authority and Issuance,", (received April 4, 2012)