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Public drain for private gain: Prop 6 rural water raid to benefit developers
By Terri Hall
October 12, 2013
Examiner.com
Have you ever had a kid ask for seconds during a meal before he’s even finished what’s on his plate? Well, that’s what the Texas legislature is asking of voters with Proposition 6 on November 5. Lawmakers want Texans to pass this constitutional amendment to approve more funding for water projects.
A similar measure narrowly passed in November 2011 for a $6 billion revolving fund to loan money to local government entities for water infrastructure, outside constitutional debt limitations. Now in 2013, the Texas Legislature is asking voters for permission to raid $2 billion from the state’s emergency fund, known as the Rainy Day Fund, to assist local agencies of government in funding water projects from the state’s water plan.
State leaders, including Governor Rick Perry, committed to making additional water and transportation infrastructure a priority in the 83rd legislative session, yet neither was addressed in the base budget. Lawmakers chose to kick the tough decisions directly to the voters asking them to use emergency funds to issue more debt, rather than discipline the use of existing taxes to fund priorities out of the regular budget (which voters have no control over). A second amendment pertaining to transportation will follow in 2014. In essence, they want us to do their jobs for them by putting us in a box. Pass the amendments or get nothing, or so it seems at first glance.
Asking for more with $6 billion on the table
The first $6 billion in credit the voters approved in 2011 has yet to be tapped, and yet here are lawmakers already asking for more. So why the push for more funding before the last round has even been touched? Because the special interests who want to build and finance these water projects want better credit terms than the already favorable, low-interest $6 billion revolving fund can offer them.
They want to be able to funnel questionable economic development projects through local water boards and get better credit enhancements, deferred loan repayments, and/or deferred interest payments than they could get with the fund established in 2011. In other words, have taxpayers and ratepayers pick-up the tab for ‘gap funding’ between project implementation and sending customers their first bill.
Considering legislators had a record $8 billion surplus in January and went on a spending spree, having spent 26% more this session than the previous session, and despite Texas having the second highest level of local debt in the nation, lawmakers are still asking voters to issue more local debt and to use the state’s emergency funds to do it. Harvard grad and State Representative Van Taylor (R - Plano) likened it to giving someone a credit card with a $6 billion credit limit only to have them ask for another $2 billion before charging anything.
Making water unaffordable
Who has to repay all this debt with interest? Ratepayers and taxpayers, but lawmakers seem un-phased by the fact funding local water projects with more state-backed debt will push up the price of water to consumers, possibly to unaffordable levels in very short order.
With other utility bills on the rise, healthcare costs soaring, other taxes going up, full-time gainful employment shrinking, and sustained high food and fuel prices despite the domestic shale oil boom (most is being exported not being used to reduce the cost of gas to U.S. consumers), making an essential element of daily living like water unattainable for working families will push many over the edge into poverty and want.
Turning scarce dollars into slush funds
There’s not sufficient assurance that the true priorities will even get built, nor is there sufficient assurance that these projects will have adequate public input to protect rural Texans’ water from being heisted and used to feed urban developers pet projects. Since decisions will be made solely by the un-elected, crony-stacked Water Development Board and funneled through local water districts, there’s plenty of opportunity for unnecessary projects to be funded ahead of the true priorities.
Look no further than the Tarrant Regional Water District subsidiary’s recent approval of an outdoor ice rink, and there’s enough to make voters skeptical. The funding is not tied to actual water production or adding capacity, which is what Texas desperately needs, not taxpayer-financed ice rinks nor stealing from rural farmers to shift water from one to another, allowing government under the thumb of special interests to pick the winners and losers.
Sneaky tactics
To add to the thorny debate, lawmakers signaled they knew Prop 6 was in trouble before they left Austin since they pushed another Rainy Day raid for transportation to November of 2014. House Appropriations Chair Jim Pitts was adamant that passage of the two measures should be tied together to guarantee they either both pass or both fail. Apparently, he worried voters would approve transportation and not water. So rather than truly letting the voters decide what they wanted to fund and how, he tried to rig it to ensure passage of both.
House members balked at directly tying passage of the two measures together fearing it would anger voters, so a handful of conference committee leaders moved the transportation measure to 2014 to appear alone in a completely separate election. Yet when citizens ask for elected leadership on transportation boards, these same legislators opine that holding elections is too expensive. Apparently their objections don’t apply to holding a separate election of their choosing.
Current transportation funding levels cannot even cover road maintenance costs, leaving no money for any new capacity or expansion projects that are sorely needed in congested urban corridors. Over the next two years, the only new capacity is being built with, you guessed it, DEBT. The proposed transportation amendment would divert half of the oil and gas severance taxes that capitalize the Rainy Day Fund to roads, estimated to be $1.2 billion annually.
Naturally, lawmakers realize how this would look on the ballot alongside a $2 billion raid for water projects so soon after asking for a $6 billion water loan program just two years ago. Perhaps they’re counting on the short memory of most voters or counting on low information voters to buy into the scare tactics and frightening photos of bone dry lakes courtesy of Water Texas, PAC (funded by Speaker Joe Straus’ cronies), trying to convince voters that unless they pass this amendment the state will run out of water.
So greed, easy money, and insider deals with less transparency surround the drive to pass Prop 6. Returning to a fiscally sound, pay-as-you-go plan is the best course to ensure a prosperous future. Texas voters ought not to be fooled by the gimmicks and scarce tactics and follow common sense and sound financial principles - if it isn’t a good idea for your own household budget, it isn’t a good idea for government, hence the taxpayers, either.
Vote ‘no’ on Prop 6 and force lawmakers to use the money voters already approved before asking for more. Better yet, require them to fund basic infrastructure needs -- roads and water -- from our existing taxes in the base budget, not with emergency funds and debt.