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The Economist: Helping support, protect Texas' water resource

By By Ray Perryman
Nov. 16, 2013 at 5:16 a.m.


The recent decision by Texas voters to allow money from the Rainy Day Fund to be used to help meet the state's future water needs is a "win" for the Texas economy.

If we run short on water, the effects on quality of life are obvious. In addition, without enough fresh water at affordable prices, sustaining the state's business complex is impossible. By voting yes on Proposition 6, Texans approved an important first step in the long journey to ensure we have enough of this vital resource.

It's no secret that water is in short supply in most parts of the state. The 2011 drought conditions were severe virtually everywhere, and the recovery has been slow in coming. While there has been some spotty relief for short-term problems, and the grass is greener in many areas, the long-term effects continue to worsen through much of the state.

Statewide, water reservoirs stood around 60 percent of capacity at the end of August. More alarming is the sharp divide between the eastern portion of Texas, where conditions are normal or close to it, and the western and panhandle regions.

Some very large lakes are completely dry. Lake Meredith, north of Amarillo, for example, is designed to hold 500,000 acre-feet and is now totally empty. What was once an important source of drinking water is gone, and it's a story repeated time and again across the state. One hard-hit river basin (the San Antonio) is nestled between others that are faring much better, which illustrates how spotty the rainfall has been.

Equally alarming, the Texas Water Development Board's monitor wells show that some aquifers are simply being sucked dry. You can see recharge through the bumpy pattern of some well-level graphs, but others simply show an all-too-steep downward trend. Water restrictions are in place in many areas, with little relief in sight.

To compound these supply challenges, demand for water is growing. The Texas population is likely to nearly double over the next 50 years. Economic expansion will also generate a need for more water. It makes little sense to rely on the vagaries of rainfall and existing infrastructure to fill this need, and fortunately, Texas voters were willing to invest in a solution.

Proposition 6, on the recent statewide ballot, created and constitutionally dedicated two new funds: the State Water Implementation Fund for Texas and the State Water Implementation Revenue Fund for Texas. The measure passed with more than 836,400 people voting for it (303,500 against). This 73 percent to 27 percent win is a clear statement. Looking at a county-level list of results, I found fewer than 20 of the state's 254 counties where the measure failed.

By passing Proposition 6, voters authorized pulling $2 billion from the Rainy Day Fund to help set up funding methods to get going on some much-needed projects to deal with shortfalls almost certain to occur in the future if we don't take action. The funds will be used to help communities develop and optimize water supplies through low-cost financing options.

With this financial help, communities can begin water projects, which are already outlined in the State Water Plan (which addresses the needs of about 3,000 water user groups). At least 10 percent of the funds will go to projects in rural areas (including Texas farmers), and at least 20 percent of the funds will be used for water conservation and reuse projects.

Even with this much-needed boost to funding for these essential projects, there is still work to be done. While a notable sum, $2 billion will not be enough to solve the long-term supply shortfall. Moreover, it is a one-time infusion from a savings account, not an ongoing source of funds.

Needs are estimated at well over $50 billion, and while the $2 billion can be leveraged to some extent, it doesn't come close to solving the problem. The economic and quality-of-life consequences of not having enough fresh water at reasonable prices can hardly be overstated.

Voters have spoken, and Texas legislators, who lacked the political will to provide even this modest funding level without punting the decision to the electorate, should take note. The water supply is a crucial issue to Texans, and fully addressing the problem should be a top policy priority.

Dr. M. Ray Perryman is president and chief executive officer of The Perryman Group (perrymangroup.com). He also serves as institute distinguished professor of economic theory and method at the International Institute for Advanced Studies.

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