Aug. 6 (Bloomberg) -- California Governor Jerry Brown called on lawmakers to put a $6 billion “no-frills” bond measure on the November ballot, about half the size of a pending proposal, to secure the water supply amid a record drought.
Brown’s plan would take the place of an $11.1 billion bond offering, scheduled for a vote in November, approved in 2009 by lawmakers and then-Governor Arnold Schwarzenegger. Brown said California can’t afford the $750 million a year it would add to the state’s $8 billion in annual bond debt service.
“I’m proposing a no-frills, no-pork water bond that invests in the most critical projects without breaking the bank,” Brown, 76, a Democrat who’s running for re-election, said yesterday in a message on his campaign website.
More than 80 percent of California is experiencing extreme drought after three years of record low rainfall. Reservoirs are 45 percent below normal and declining. Brown declared a state of emergency in January and called for a voluntary, 20 percent reduction of water use.
California lawmakers have been trying for months to agree on a smaller bond measure to upgrade aqueducts, water storage and pipelines that link the Sacramento-San Joaquin River Delta to population centers in Southern California and supply the $44.7 billion-a-year agriculture industry.
Brown’s proposal would earmark $2 billion for water storage, $450 million for statewide water recycling projects, $100 million for conservation and $200 million for stormwater capture. The 2009 measure would devote $3 billion to storage, $1.25 billion for recycling and conservation measures, and $70 million for stormwater management.
Brown doesn’t propose using the bonds to pay for two 30-mile (48-kilometer) tunnels under the ecologically sensitive delta that the governor has urged to bolster supplies and mitigate environmental damage in the area east of San Francisco.
Legislative leaders have until the end of next week to hammer out a deal in time to make the November ballot. Rewriting the 2009 bond proposal would require a two-thirds vote in both houses of the legislature. While Democrats hold such a so-called supermajority in the assembly, they are two seats short in the senate, meaning Republicans will have an influence there.
California’s recovering economy has lowered the state’s borrowing costs for general-obligation bonds. The extra yield that buyers demand to own 10-year California debt rather than top-rated securities narrowed to 0.25 percentage point yesterday, from 0.39 percentage point May 9, according to data compiled by Bloomberg.
Senate President Darrell Steinberg, a Sacramento Democrat, has proposed a $7.5 billion water bond package. Rhys Williams, a Steinberg spokesman, said he expects lawmakers and Brown to reach agreement in time to qualify for the ballot.
“The differences are minor,” Williams said. “If we can get past them, we can focus on all the good things in the water bond package.”
Assembly Speaker Toni Atkins, a San Diego Democrat, expressed skepticism in a statement released by spokesman Will Shuck.
“While I believe the governor is correct that voters would ultimately reject the existing $11.2 billion water bond on the November ballot as too expensive, I am also concerned that his $6 billion proposal would ultimately be too small to meet the state’s dire needs,” Atkins said.
A poll by the nonpartisan, San Francisco-based Public Policy Institute of California released July 23 found majority support for both the $11.1 billion bond measure and a hypothetical one with a smaller price tag.
Sixty-one percent said they would vote yes on an $11.1 billion proposal and 22 percent said they’d say no. When those who would vote no were asked how they’d vote if the amount were lower, support increased by 8 percentage points. The survey of 1,705 adults had a margin of error of plus or minus 3.7 percentage points
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