BACKGROUND
State Role. Multiple agencies at each level of
government (state, federal, and local) have some
responsibilities for flood management. In addition,
private entities own and operate some flood control
facilities. The state carries out a number of programs
designed to provide flood management. Some of
these programs are operated directly by the state,
while others provide grants to local agencies for
similar purposes.
The state is primarily responsible for flood
control in the Central Valley. As shown in Figure
1, the state Central Valley flood control system
includes about 1,600 miles of levees, as well as
other flood control infrastructure such as overflow
weirs and channels. The state directly funds the
construction and repair of flood management
structures such as levees, typically with a federal
and local cost share. For approximately 80 percent
of the levees in the Central Valley flood control
system, the state has turned over the operations and
maintenance to local governments (primarily local
flood control districts), although the state retains
ultimate responsibility for these levees and the
system as a whole.
Outside the Central Valley system, the state’s
role in flood management generally consists of
providing financial assistance to local governments for flood control projects located throughout the
state. For example, the state has provided funding
for the Santa Ana River Mainstem flood control
project that spans Orange, Riverside, and San
Bernardino Counties. In the Sacramento-San
Joaquin River Delta region (Delta), as another
example, the state has no oversight role with
respect to local levee construction or maintenance
(a majority of Delta levees—about 700 miles—are located outside the state system). Because
a significant portion of the state’s population
depends on water supplies that come through the
Delta, there is a state interest in the continued
operation of the Delta levee system. Given this,
the state has provided financial assistance over
many years to local flood control districts in the
Delta region to rehabilitate and maintain levees.
Funding. In general, state flood management
programs have been funded from the General
Fund, with some use of bond funds. Since 1996,
the voters have authorized a number of state
general obligation bonds, of which about $400
million has been allocated specifically for flood
management purposes. Most of these bond funds
for flood management have already been spent.
State funding levels for flood management
have varied substantially on a year-to-year
basis, largely depending on the availability of
General Fund and bond monies for this purpose.
For example, since 2000–01, annual state
funding for flood management has varied from
a low of about $60 million (2002–03) to a high
of about $270 million (2000–01). In addition
to state flood management programs, local
governments, including flood control districts
and other public water agencies, operate their
own flood management programs and projects.
Funding for these local programs comes from
various sources, including property assessments and, in some cases, financial assistance from the
state.
A law passed earlier this year provides $500
million from the General Fund for emergency
levee repairs and other flood management-related
costs.
The Department of Water Resources (DWR)
has made rough estimates of the cost to repair and
upgrade the Central Valley flood control system
and levees in the Delta of between $7 billion and
$12 billion.
PROPOSAL
This measure authorizes the state to sell about
$4.1 billion in general obligation bonds for various
flood management programs. (See “An Overview of
State Bond Debt” on page 96 for basic information
on state general obligation bonds.) Figure 2
summarizes the purposes for which the bond
money would be available to be spent by DWR and
for grants to local agencies. In order to spend these
bond funds, the measure requires the Legislature
to appropriate them in the annual budget act or
another law.
Specifically, the bond includes about $4.1 billion
for various flood management activities, allocated
as follows:
- State Central Valley Flood Control System and
Delta Levees—$3 Billion. To evaluate, repair,
and restore existing levees in the state’s Central
Valley flood control system; to improve or add
facilities in order to increase flood protection
for urban areas in the state’s Central Valley flood
control system; and to reduce the risk of levee
failure in the Delta region through grants to local
agencies and direct spending by the state.
- Flood Control Subventions—$500 Million. To
provide funds to local governments for the state’s
share of costs for locally sponsored, federally
authorized flood control projects outside the
Central Valley system.
- Stormwater Flood Management—$300
Million. For grants to local agencies outside of
the Central Valley system for projects to manage
stormwater.
- Statewide Flood Protection Corridors and
Bypasses—$290 Million. To protect, create, and
enhance flood protection corridors, including
flood control bypasses and setback levees; as
well as for floodplain mapping.
| FIGURE 2 |
| Proposition 1E: Uses of Bond Funds |
| Amount
(In Millions) |
State Central Valley flood control
system repairs and improvements;
Delta levee repairs and maintenance. |
|
$3,000 |
| Flood control subventions
(local projects outside the Central Valley). |
|
500 |
Stormwater flood management
(grants for projects outside the Central Valley). |
|
300 |
| Flood protection corridors and bypasses;
floodplain mapping. |
|
290 |
| |
|
|
| Total |
|
$4,090 |
|
|
FISCAL EFFECTS
Bond Costs. The costs of these bonds would
depend on interest rates in effect at the time they
are sold and the time period over which they are
repaid. The state would likely make principal and
interest payments from the state’s General Fund
over a period of about 30 years. If the bonds were
sold at an average interest rate of 5 percent, the
cost would be about $8 billion to pay off both the
principal ($4.1 billion) and interest ($3.9 billion).
The average payment would be about $266 million
per year.
Property Tax-Related Impacts. The measure
provides funds for land acquisition by the state
for flood management, including the development
of bypasses and setback levees. Under state law,
property owned by government entities is exempt
from property taxation. To the extent that this measure results in property being exempted from
taxation due to acquisitions by governments, local
governments would receive reduced property tax
revenues. Because the measure does not specify
what portion of the bond funds will be used for
acquisitions, the impact on local property tax
revenues statewide is unknown, but is potentially
up to several million dollars annually.
Operational Costs. To the extent that bond
funds are used by state and local governments to
purchase property or develop a new flood control
project, these governments would incur unknown
additional costs to operate or maintain the properties
or projects.
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