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California will need to find billions of dollars annually to improve its water system, according to a new Public Policy Institute of California report.

Lawmakers are currently debating several water bond proposals for the 2014 ballot, but the report cautions that the state cannot rely on uncertain bond money to improve water management. It advocates a "broader mix of funding sources" that includes new taxes and fees.

"Although this is a fixable problem," the report says, "it will not happen without a bold, concerted effort on the part of California's state and local leaders, who must convince California's residents to support the necessary changes with their votes and their pocketbooks."

Aging infrastructure and climate change represent pressing issues, the report says, while water agencies are constrained by constitutional restrictions on how much money they can reap from ratepayers. Bond money requires fickle voter approval and crowds out General Fund dollars for education and health care.

Despite those funding obstacles, the report estimates that California needs $2 billion to $3 billion annually, breaking that up into five distinct areas: furnishing small communities with safe drinking water; flood protection; stormwater management; nurturing ecosystems and the endangered species that live there; and integrated water management.

The report's authors are generally optimistic about local entities that perform such services as providing drinking water and managing wastewater or stormwater. User fees generate much more money than what comes from the state or federal sources.

But because local fees and taxes generate the bulk of water funding, the report warns, tax-related ballot initiatives like Propositions 13, Proposition 218 (1996) and Proposition 26 (2010) have made it hard to keep up with maintenance costs.

Higher water-quality standards present a looming cost, as does the need to treat water when chemicals like arsenic and nitrate seep in — a problem that "will get worse before it gets better, because the accumulated chemicals in the soil are slowly moving through the state's aquifers," the report says.

Gov. Jerry Brown's plan to construct two massive water tunnels beneath the Sacramento-San Joaquin Delta could also bring higher costs as users pay back the cost of construction, the report says. The expense will be less for urban users than for farms where "this price increase could be prohibitive for many agricultural activities," the report said.

Farms will also face issues like scarce groundwater, a symptom of overpumping, and increasingly salty soil.

"Because of these problems," the report says, "we expect a continued decline in agricultural water use and irrigated acreage and a rise in the share of higher-income farming activities that can support higher water costs."

PHOTO: A Folsom woman examines a drip irrigation emitter at her home on Friday, March 7, 2014. The Sacramento Bee/Randall Benton.



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