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October 2004

CALFED WATER FEES: Trick or Treat?

Instead of ghosts and goblins giving Northern California water users the willies during this Halloween season, it is a new CALFED funding proposal that has them scared. While it appears that the CALFED program has received a renewed commitment from the federal government in terms of financing its programs (see "CALFED Balancing Act" article), a proposal to provide a steady stream of funding to pay for the state share is being met with staunch opposition from Northern California water users.

The troubling proposal being considered by the Bay Delta Authority envisions placing this financial burden squarely on all water users in the form of an across-the board fee, or tax, on all water use. Family Water Alliance (FWA) is opposed to any such proposal that would serve to tax the water users in Northern California, as this proposal would have drastic consequences on our rural agricultural communities.

To begin, if this fee were in the amount of eight dollars per acre-foot (an amount that it has been speculated would be required), it would drastically increase the cost of food production for our farmers, who continue to struggle to survive on ever shrinking margins. As an example, it has been estimated that the proposed water user fee would increase the cost of growing rice by $40 per acre. Agriculture is an industry that deals in a worldwide market, thus increased costs (such as this proposed tax) cannot be passed on to the consumer, thereby creating a competitive disadvantage for California farmers. In our agricultural communities, where farming is the primary industry, such a tax would result in negative economic impacts that would ripple throughout the region.

Moreover, this ludicrous proposal would have the effect of asking Northern Californians to pay for their own demise. CALFED is basically asking water users in the North to fund programs that would result in taking water from this region, for the purpose of exporting it to another. Seldom is one asked to pay for the right to have one of their most vital resources pilfered.

Further, this proposal asks us to fund programs that promote increased land acquisitions in Northern California (a region commonly referred to as the CALFED solution area) for the purpose ecosystem restoration. Despite the fact that these programs bring with them various negative third party impacts that have yet to be remedied or mitigated, including reduced economic activity, lost property tax revenues, degradation of the flood control infrastructure, increased environmental regulation for routine farming activities, and crop damage.

Additionally, new water fees to fund CALFED cannot be associated with any direct benefits for water users in Northern California. Were such a proposal adopted, it would likely have the effect of eroding any and all support for the CALFED program from these communities and water users that are forced to suffer as a result. This would result in jeopardizing the potential for the benefits this program forecasts that would inure to the entire the state, including water supply reliability, water quality, levee stability, and ecosystem restoration.

Included in the many varied interests throughout the region that have expressed opposition to the Bay Delta Authority in regard to this proposal, is a coalition of California Congressman, which includes the following: Congressman Wally Herger; Congressman John T. Doolittle; Congressman Dennis Cardoza; Congressman Devin Nunes; Congressman George Radanovich; Congressman William Thomas; Congressman Doug Ose; Congressman Mike Thompson; Congressman Robert Matsui; and Congressman Calvin Dooley. In a letter written to Patrick Wright, Executive Director of the Bay Delta Authority, and Gary Hunt, Chairman, and signed by all of the foregoing Congressmen, the following sentiments were expressed: "To be sustainable, any program for funding CALFED needs to recognize the different circumstances in which various water agencies operate, acknowledge the value of non-monetary contributions to CALFED solutions, and fairly link costs and benefits. In addition, the overall allocation of CALFED’s costs should reflect the fact that the majority of CALFED benefits accrue to the State as a whole."

FWA concurs. Any such CALFED funding mechanism must take into account the benefits provided to the state as a whole as a function of the participation of Northern California water interests. A water fee or tax on these communities and water agencies would be viewed as a punitive mechanism for the good faith that has been shown to date. As such, FWA opposes the water user fee proposal as an avenue for funding the CALFED program.

FWA encourages you to voice your opposition to this water user fee proposal, letters should be sent to the following address: Mr. Gary Hunt, Chairman; Mr. Patrick Wright, Executive Director; California Bay Delta Authority; 650 Capitol Mall; Sacramento, California 95814.

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