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California Senate OKs $10B for Water

SAN FRANCISCO — The California Senate, poised to convert years of water policy debates into legislation, approved bills late Monday that include a $9.99 billion bond measure.

The general obligation bond authorization would fund a smorgasbord of water-related projects throughout the state. It was approved along with three policy bills, though the Senate adjourned Monday night without taking action on two other water policy bills in the package. Senators were expected yesterday to reconsider the other two bills.

“Tonight the Senate passed far-reaching legislation which has been decades in the making, including the Delta bills, which finally address the failing ecosystem, the bond bill, and a 20% conservation standard,” Senate President pro tempore Darrell Steinberg, D-Sacramento, said in a statement.

Steinberg has committed himself to getting a water package enacted this year, after years of back and forth debates over how to modernize the state’s aging water delivery system as California’s population grows.

In addition to the usual partisan splits, the water issue pits urbanites against agriculture, and Northern California against Southern California.

The Senate policy bills were all written to be contingent on the other policy bills passing. The bond measure is stand-alone.

The water bills also have to be approved by the Assembly. That chamber was not expected to kick into gear until late yesterday.

The bond legislation requires two-third majority votes in each house to place a measure on the state’s November 2010 ballot, when it would need a simple majority of voters’ approval for passage.

The bond bill was carried by Republican Dave Cogdill, and received enough bipartisan support to clear the Senate with the requisite two-thirds majority.

In the last three years, California voters have authorized more than $50 billion of new GO debt.

Though the water bond package cleared the Senate, its passage comes amid rising concern about the state’s ability to carry its GO debt burden, concerns that have been exacerbated by a recession that has shrunk California’s general fund revenue base.

After the scheduled pricing of a total of $2.2 billion of Build America Bonds and tax-exempt new-money GOs yesterday and today, California will have approximately $48 billion of authorized but not-yet-issued GO debt, according to figures from the state treasurer’s office.

Treasurer Bill Lockyer, a Democrat, warned in his annual debt affordability report last month that increases in the general fund debt burden would result in more cuts to state services, and said user funding, such as through water revenue bonds, would be a more appropriate way to pay for water infrastructure.

According to published reports, the powerful California Teachers Association is opposing the water bonds, along with Service Employees International Union, which represents state employees. Both unions are worried that debt service will sqeeze state programs that employ their members.

Cogdill’s water bond measure would require that at least half of the authorization could not be issued until July 2015.

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