Prop 6: Slush Fund or Solution to Texas’ Water Woes?
Everything you’ve ever wanted to know about Prop 6—and then some.
At this point, you’ve probably heard about Texas’ water woes. We’re in a drought, our population is booming, some towns have lost their water supply, and things are likely to get worse. You might have also seen TV spots recently urging you to vote yes on Proposition 6 on Nov. 5. Or maybe you heard Gov. Rick Perry talking it up on the local news, posing in front of a dwindling lake. Or maybe you read speaker of the House Joe Straus’ compelling op-ed in the San Antonio Express-News. Prop 6 is being pitched as a long-term solution to the growing water supply problems of the state, a near-panacea to avoid the economic, social and environmental stress that prolonged drought is bringing to the state. Or as the pro-Prop 6 ads put it, “Don’t let the tap run dry.”
But what is Prop 6 and who’s behind it and who stands to profit from it? Unless you followed the legislative sessions closely, you probably had no idea what Prop 6 is, and you don’t want to just take “their” word for it. In short, you’ve probably got some questions. Below is a FAQ, based on interviews and research conducted by the Observer that we hope will help you make an informed choice at the polls on Nov. 5 (or during early voting, if that’s how you roll).
What is Prop 6?
It’s one of nine proposed constitutional amendments on the statewide ballot this year. Essentially, Proposition 6 would create a water bank, seeded with $2 billion from the state’s Rainy Day Fund, to help finance the 562 water projects anticipated in the State Water Plan. The main fund is called the State Water Implementation Fund (SWIFT).
Those projects, ranging from building new reservoirs to fixing leaky pipes, are estimated to cost $53 billion over the next 50 years. State leaders believe the $2 billion can be leveraged to cover the state’s share, or $27 billion.
The fund would provide low-cost financing options for communities and utilities around Texas by buying down interest rates, offering deferred payments on interest and principal, and extending the payback period for loans.
Who will oversee all that money?
The new (and improved?) Texas Water Development Board.
The Legislature, as part of the legislation authorizing Prop 6, restructured the agency from an all-volunteer board to a three-member panel appointed by Gov. Rick Perry—a move that has heightened concerns that the SWIFT will end up being another slush fund benefitting Perry’s cronies.The top administrators and all board members were purged. The former head of the agency, Melanie Callahan, said the politicization of the water board could lead to conflicts of interest.
“I think any time you have political appointees who are full time and making $150,000 a year, I don’t see how you at least have that perception,” Callahan told the Observer.
Who did Rick Perry appoint to oversee the Texas Water Development Board?
This is going to come as a shock… but he appointed three loyalists with close partisan or business ties to the governor.
Bech Bruun: Bruun has swung through the revolving door between the GOP and Texas government several times. He was on Rick Perry’s staff from 2001 to 2007, advising the governor on, get this, gubernatorial appointments. Then, he went to work as the executive director of Texas Victory 2008, the GOP’s get-out-the-vote operation. Then, he worked as chief of staff to state Rep. Todd Hunter (R-Corpus Christi) before heading off to the Brazos River Authority. The Brazos River Authority has been embroiled in controversy for years as it tries to take control of most of the remaining unallocated water rights in the Brazos basin.
Carlos Rubinstein: An old hand at water policy in Texas, Rubinstein previously served as the Rio Grande Watermaster before being tapped for the Texas Commission on Environmental Quality. Though he was not quite as divisive as his counterparts, Rubinstein has generally been in line with the governor’s aggressive attacks on EPA.
Mary Ann Williamson: The wife of the late Ric Williamson, who was a close friend of Perry’s and oversaw the scuttled Trans-Texas Corridor. Mary Ann Williamson previously served as the chair of the Texas Lottery Commission and she owns MKS Natural Gas, a company Perry invested in through his blind trust.
How do I get my hands on some of that sweet SWIFT money?
The only projects that can be considered for financing are those listed in the State Water Plan, which is redrafted every five years. The most recent plan, released in 2012, contains 562 projects. The State Water Plan is the product of 16 regional water planning groups, agglomerations of stakeholders—including cities, power plant operators, river authorities, agriculture and environmentalists—who study the region’s needs, current and future water supply, and come up with a list of recommended projects (Under the new law, the planning groups must come up with a list of prioritized water projects.)
The SWIFT dollars won’t be available until March 2015, three years into the next round of the regional planning process that leads to the State Water Plan.
Is there anything in there for conservation or rural communities?
Yes, the Legislature directed the water board to devote at least 20 percent of the funding to water conservation, and 10 percent to rural communities and agriculture. Those provisions went a long way toward buying support from big environmental groups such as the Sierra Club and ag interests like the Texas Farm Bureau, both which are stumping for Prop 6.
However, some environmentalists point out that the language in the final bill (the water board “shall undertake to apply”) is ambiguous and could make conservation optional.
“Our view obviously is that most likely it’s going to be window dressing for a slush fund,” said Bill Bunch of Austin’s Save Our Springs Alliance, whose board voted unanimously to oppose Prop 6. “There is some small chance that Rick Perry’s appointees will do something other than throw money at their cronies. We just see that as very unlikely.”
But Ken Kramer, the well-respected former chairman of the Lone Star Chapter of the Sierra Club, argues the concern is overblown. “Frankly that’s just a tempest in a teapot as far as I’m concerned,” he said. The provision had to be written that way because it’s possible, though not likely, that not enough conservation-related applications could be filed to reach the 20 percent threshold. The conservation target, he argues, “provides an opportunity we haven’t had before—to get out there and really hustle for conservation projects that can be brought online pretty quickly.” Kramer said conservation-minded folks should get involved with the regional water planning process to make sure conservation projects get put on the priority list.
Michele Gangnes, an activist in Lee County with the group Independent Texans, disagrees.
“I trust [Kramer’]s instincts, but in this case I think his judgment is clouded by hoping that this is a way to get conservation funded.” Ganges said she’s tried to make conservation projects a priority at her regional planning group, but they “roll their eyes.”
Who’s supporting Prop 6?
In general, Prop 6 has broad backing from what you might term The Bigs: big environmental groups, big ag, big business and big-time politicians, including Gov. Perry, Lt. Gov. David Dewhurst, speaker of the House Joe Straus and the vast majority of the Texas Legislature. The bill putting Prop 6 on the ballot passed the Texas House 141-4, with token opposition from a handful of tea party members.
Meanwhile, a coalition of industrial interests, organized as Water Texas PAC and run by Speaker Joe Straus, has poured $2.1 million into a campaign to push voters to approve Prop 6. The top donors include a mix of water-intensive industries and interests that stand to profit from the billions in spending on water infrastructure unleashed by Prop 6. Among the top funders of Water Texas PAC:
- The Associated General Contractors of Texas ($375,000), a trade association whose members are likely to profit from the projects funded by SWIFT;
- Dow Chemical ($250,000): Dow enjoys senior water rights on the Brazos River associated with its gargantuan chemical facilities at Freeport on the coast. Water rights for some other users in the Brazos have been suspended multiple times during the current drought when Dow has made a “priority call,” basically laying claim to its share when there’s not enough to go around.
- Energy Future Holdings Co./Luminant ($129,000): The nearly bankrupt EFH is Texas’ largest electric utility company. Its fleet of coal, natural gas and nuclear power plants rely on a stable water supply to ensure that its steam turbines can generate electricity.
- Koch Industries ($20,000): Although Koch is better known for David and Charles Koch’s vast contributions to right-wing causes and corporate front groups, the company’s manufacturing and refining facilities depend on an abundant and cheap supply of water.
Water Texas roped in former Rangers pitcher, and Republican booster, Nolan Ryan to stump for Prop 6.
The environmental community is split, with the big green groups—Sierra Club, Nature Conservancy, National Wildlife Federation, Environment Texas—supporting Prop 6.
Who’s opposing Prop 6?
The opposition has never been well organized and is only now, just days before the election, receiving much attention from the press. The most vocal skeptics and opponents of Prop 6 largely hail from two camps that don’t normally get along—libertarians and tea party activists, and grassroots environmentalists.
JoAnn Fleming, a well-known tea party activist from Tyler who oversees the We the People PAC, has put out a voter guide offering 12 reasons to oppose Prop 6. The guide blasts SWIFT as a “quasi-investment bank” that will “set up a shell game to favor special interests” while burdening local government with debt.
Michele Gangnes, a Lee County attorney and member of the informal “Nix Prop 6” group, says she thinks SWIFT will pay for projects that will move water from rural areas to the big cities.
“We’re pushing the power up to the state and taking away local control,” she said.
Some environmentalists insist that cities should implement more aggressive conservation programs before spending billions on resource-intensive water supply projects.
“What the Legislature did was offer a panic-button approach for pork-barrel projects that are almost always aimed at increasing the rate of depletion of limited water supplies in the form of pipelines and reservoir projects,” said Bunch, the long-time director of Save our Springs.
“Most of the effective conservation strategies don’t require debt or big-capital financing. The ones that do are probably not the ones that are the most cost-effective.”
Has anything like this been proposed before?
Not exactly. But Texas voters have been asked at least a dozen times to amend the state constitution to authorize water-related spending. The first such instance was in 1957, at the tail end of the historic drought of record. Voters overwhelmingly approved (74 percent in favor) $200 million (about $1.7 billion in today’s dollars) in water development funding to make loans to drought-stricken communities. Along with the creation of the Texas Water Development Board, it marked the advent of an era of reservoir-building and state involvement in securing water supplies.
Between the late 1960s and early 1980s, voters took a more jaundiced view of state spending on water infrastructure. The most grandiose water plan ever hatched came to a vote in 1969. The Legislature, perhaps high on the Summer of Love, asked voters to approve $3.5 billion in bonds (an incredible $22.3 billion in today’s dollars) to finance the construction of the “Trans-Texas canal” (sound familiar?), an open-air canal from the Mississippi River through Louisiana to East Texas, where huge reservoirs would store the water, and collect more, before conveying it to arid agricultural areas of West and South Texas.
The Observer, then a for-profit venture that endorsed candidates (the Observer is now a nonprofit), called it “not really a plan at all, but a highly speculative, sometimes dishonest, and always optimistic scheme for spending a monumental hunk of Texas’ money, mainly to replenish the water supplies of West and South Texas irrigators and oil and sulphur producers.” Sound familiar?
The Observer editorial also notes that “most of the state’s daily newspapers have endorsed the water bond issue, editorializing with great assurance that, although the plan is expensive, there is no alternative if Texas is to have the water it desperately needs. Wrong.”
And the voters seem to have agreed. The proposition was narrowly defeated, by fewer than 6,000 votes.
Chastened, the Legislature didn’t try another big bond authorization for water infrastructure until 1976, when voters soundly rejected a $400 million water bond authorization. Voters also shot down, 43-57, another proposal, floated by Rep. Tom Craddick (R-Midland), in 1981 to dedicate a portion of excess tax revenue to water projects.
Kramer, of the Sierra Club, said he thinks Texans rejected the proposals because “there was no effort to pay attention to conservation.”
“It was just a build, build, build type concept,” he said.
By 1985, legislators tried again, this time taking a more comprehensive approach that included conservation, funding for agricultural projects and flood control. The two measures overwhelmingly passed and since then every water-funding proposition has succeeded, including the most recent in 2011—an additional $6 billion in bond authority for the Texas Water Development Board—with a narrow 51.5 percent of voters approving.