California’s $3.5 billion federal water project giveaway is a textbook example of public-private partnerships

Editorial: The feds can curb a foolish California water giveaway

California’s decision to hand over $3.5 billion in federal water projects to local communities will be one of the most ambitious water giveaways since the days of the New Deal. It will also be a major source of future conflict with federal law and public policy.

Federal authorities on the West Coast should consider suing California over the giveaway, which will amount to a $3.5 billion per year subsidy for private water users on the state’s main water-rich Delta region, California’s Sacramento River and its tributaries, and for cities and farms all over the state’s Central Valley.

The water projects are part of a federal water diversions program created in the 1930s to improve regional irrigation of land in the Southwest. The biggest of the projects is the California-Mexico border canal, which will cost the state $2.2 billion.

In addition to the three projects already under construction, California WaterFix proposes to spend $1.4 billion on four projects: a $636 million canal linking the northernmost canal route to Mexico, $532 million to expand the Mexico crossing, and $1.18 billion for a tunnel under the Sacramento River. Under the federal program, the state would also have to buy out all private water users within the border canal’s planned 25-mile stretch.

These public-private partnerships were hailed when proposed in the 1990s. The state of California even used the infrastructure project as a campaign issue, declaring that “California’s water is under attack.” The reality is, however, that the public subsidies will amount to $3.5 billion per year and could easily double or triple the amount that private industry uses, which would cost $5.2 billion.

In fact, the U.S. Bureau of Reclamation, a federal agency, has estimated that by 2030, the state could pay back more than $250 billion in federal loans for water-intensive infrastructure, while taxpayers could be left with $100 billion.

In many ways, the water projects are a textbook example of the sort of public-private partnerships that the federal government has long used to help communities improve their water supplies. As the Bureau of Reclamation put it in a 2007 report: “All of the public

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