Off the Kuff Rotating Header Image


Opposition gearing up for the water fund amendment

The legislation to create a state water infrastructure fund, and the joint resolution that authorized tapping the Rainy Day Fund for up to $2 billion to seed it, had a rocky road in the legislature and wasn’t completed until the last weekend of the regular session. Now the task is to pass the constitutional amendment that the joint resolution enabled on the ballot, and that’s no sure thing, either.

If ratified in the Nov. 5 election, the proposed constitutional amendment would create a state water development bank that supporters say is vital to help Texas avert a worsening water shortage over the next half-century.

The unfolding campaign appears almost certain to match the contours of the legislative debate, balancing the need to keep Texas economically vibrant with a robust water supply against Tea Party-fueled opposition over spending rainy-day money on the multibillion-dollar program.

Nine other amendments are heading to the state’s 13 million-plus voters, but Senate Joint Resolution 1 is easily the farthest-reaching. Senate Natural Resources Chairman Troy Fraser, a chief proponent, said he hopes to muster “an army of people” into the campaign to push the measure to victory.

The effort is expected to include much of the state’s political leadership, including Gov. Rick Perry and Lt. Gov. David Dewhurst.

H204Texas, a coalition that includes chambers of commerce, energy companies, water suppliers and other interests, has already started mapping out a political-style campaign that includes fundraising, media buys, op-ed pieces and elaborate use of social media.

“We’re already in full force,” said Heather Harward, the coalition’s executive director.


But opposition is also taking shape as an array of conservative groups — including Tea Party and citizens lobby organizations — work their formidable email networks to point up what they say are a number of reasons why the initiative should be defeated.

Recycling a major element from the legislative debate, opponents have begun to denounce the proposed use of $2 billion in state rainy-day funds, which lawmakers approved in a separate appropriations bill to capitalize the proposed bank.

Opponents say that putting the $2 billion into a constitutionally dedicated fund enables supporters to avoid having the money count against a state spending cap, which conservatives both in and out of the Legislature have vowed to protect vigorously.

“We’re going to have to oppose it,” said JoAnn Fleming of Tyler, executive director of Grassroots America, which she said networks with more than 300 Tea Party and liberty organizations.

Fleming said members of her organization and related groups plan to work through summer and fall in a “good old-fashioned grassroots effort” to drum up votes against the initiative. “We’ve been successful with that in the past,” she said.

One influential conservative group, Texans for Fiscal Responsibility, came out against the proposal during the just-ended regular legislative session, but group President Michael Quinn Sullivan said in an email that “it’s premature to speculate on what we may or may not be doing in the fall on constitutional amendments.”

“A great many conservative groups opposed SJR1 in the legislature,” said Sullivan, who is president of Empower Texans and Texans for Fiscal Responsibility. “We know a lot of folks are going to be talking about it in the fall. If or when we decide to engage in that issue, we’ll engage.”

Chuck Molyneaux of McKinney, 73, a retired software developer who heads the North Texas Citizens Lobby, said his organization is reaching out to its allies in the Tea Party community to oppose the measure and the proposed use of rainy-day funds.

“We’re going to do our best to keep it from being passed,” he said. “This one just reeks of smoke and mirrors.”

I’ll save the debate about the merits of the amendment for another day. I just want to point out that historically speaking, the vast majority of amendments that get put on the ballot do get passed. However, three of the five that were defeated in the past decade went down in 2011. Here’s a brief recap of how this voting has gone:

2011 – 7/10 passed
2009 – 11/11 passed
2007 – 16/16 passed
2005 – 7/9 passed
2003 – 22/22 passed

There are two interesting things about the 2011 election. One is that the referenda that failed were not exactly high profile or had any apparent opposition going into the election. Here’s the ballot statement of the five amendments in 2011 and 2005 that were rejected, first from 2011:

Prop 4 Permit county to issue bonds for development, 40.26 to 59.73
Prop 7 Permit El Paso County to create reclamation districts, 48.29 to 51.50
Prop 8 Appraisal for ad valorem tax of land devoted to water stewardship, 47.00 to 52.99

And from 2005:

Prop. 5 Commercial loan interest rates defined by Legislature, 43.41 to 56.48
Prop. 9 Six-Year term for regional mobility authority, 46.67 to 53.32

Unlike 2005, the year of the Double Secret Illegal Anti-Gay Marriage amendment, there wasn’t anything particularly high profile in 2011, though Prop 4 was opposed by various anti-toll road groups. I have no memory of the defeated issues from 2005. The other thing about the 2011 election was that it had the lowest turnout of any referendum on this list:

2011 Turnout – 690,052
2009 Turnout – 1,058,986
2007 Turnout – 1,096,410
2005 Turnout – 2,260,695
2003 Turnout – 1,470,443

That might have had something to do with it, though recall that the 2003 election, which included the medical malpractice tort “reform” referendum was held in September (back when there was still a uniform election date in September) for the deliberate purpose of keeping turnout low, which supporters of tort “reform” assumed would be better for their cause. They didn’t want to be on the same ballot as the high-turnout Houston Mayoral election that year. It’s not clear to me whether turnout will be a factor one way or the other for SJR1, but on the whole the lower the turnout the greater the influence of the more motivated voters, and I’d put my money on the antis being more motivated at this time. So keep an eye on that. EoW has more.

Finally a focus on water

The good news is that the 2013 Lege does seem to be serious about water issues.

House Speaker Joe Straus recently said Texas’ water needs will be a high priority, while Lt. Gov. David Dewhurst, who presides over the Senate, proposed tapping the Rainy Day Fund for $1 billion to finance new infrastructure identified in the state’s long-range water plan.

Previous attempts to fund the water plan failed because of spending concerns, but Straus and Dewhurst have said the state cannot afford to go thirsty as its population grows. The plan warns of grave shortages by 2060 without more supplies.

The new push to fund the plan is encouraging, said Heather Harward, executive director of H2O4Texas, a coalition of businesses, cities and water suppliers. “We could have certainty once and for all,” Harward said.

The group has called for lawmakers to pour as much as $2 billion from the roughly $8 billion Rainy Day Fund to help pay for water-related infrastructure. The money would be part of a revolving loan program in which the state would help cities and other public entities start projects. Once the loan is repaid, other projects could get financing.

The Texas Water Development Board, the state’s water-planning agency, has advocated a similar approach. It has suggested that the state could finance $44 billion in projects over the next half-century with a $2.6 billion capitalization.


Some policy experts and environmentalists are skeptical of the state’s projected needs, saying the estimate overstates demand by assuming each Texan will use the same amount per day in the future. Studies show people across the country are using less water now than they were 30 years ago.

The estimated cost of the state’s plan, especially over the next decade, “strains the imagination,” said Sharlene Leurig, an Austin-based expert on water-project financing at Ceres, a nonprofit group that works with investors to promote sustainability. “In reality Texas needs to spend far less than that to meet its water needs.”

Leurig said cities should push to reduce daily consumption though conservation and efficiency because “it’s the cheapest water available.” In contrast, building expensive infrastructure to meet future demand that does not materialize will put the credit ratings of public water systems at risk and significantly increase tax and water bills for customers.

Like I said, it’s a good thing that the Lege is starting to pay attention to this issue. You would have thought they’d have considered it back in 2011 when we were in the middle of the worst drought of most people’s lifetimes, but the Republicans were all drunk on austerity punch back then, and they’re only just now beginning to figure out where they’ve woken up, and where their clothes and car keys are. The qualm I have is with the use of the Rainy Day Fund to kickstart things. Yes, it makes a certain amount of sense, and yes, there’s more than enough money in the RDF to cover what they’re talking about. The problem is that the 2011 Lege wrote a bunch of hot checks that the 2013 Lege will have to cover – $4.7 billion to Medicaid, $2.1 billion to schools, all deferred obligations from the last biennium – and unless you’re willing to basically drain the RDF dry, there’s not enough in there to cover all of these things. If we use the RDF for this purpose, and then Straus and Dewhurst et al turn around and say the RDF is now off limits because there just isn’t enough there to pay for other things and still maintain a cushion, that’s not good. Since those obligations must be met, it would mean the funds would come out of revenue for this session, which is another way of saying you can kiss that so-called surplus good-bye. Frankly, under that scenario, I’d expect there would need to be more cuts, especially if the Lege follows through on its claims to be more transparent about the budget and to not resort to the sort of skulduggery they’ve always used to make the budget appear to be balanced. We’ve robbed from the needy enough, thanks.

I also share Ms. Leurig’s concern about the need to prioritize conservation above all other efforts, as conservation is by far the cheapest and most effective solution. As the story notes, the San Antonio Water System, which has always emphasized conservation, came through 2011 in pretty good shape, while the wastrel city of Midland ran its water supply down so far it wound up hurting its water enterprise’s credit rating. Let’s not lose sight of simple and cost-effective ways to use less water and to encourage the use of less water, and let’s not build any reservoirs we’re not sure we really need.