Three lessons for California’s water funding challenges in today’s recession

Sep 22, 2020

California’s water managers have had their hands full keeping our water systems safe and operational during the COVID-19 pandemic. But their work on addressing the fiscal consequences of the deep economic recession is just beginning. 

Three lessons from the Great Recession of 2007-09 could guide more effective policy responses today. 

First, a bit of budgeting context: California’s water sector is large, with annual spending of about $35 billion. Most is for the core functions of water supply and pollution prevention, with smaller amounts for managing floods and ecosystems and retiring debt from past water bonds. 

Local agencies fund the lion’s share – 85% – principally from water and wastewater bills. But state and federal tax dollars help fill gaps, especially for “fiscal orphans” like safe drinking water in poor communities, ecosystem and watershed restoration, and flood protection, which lack reliable local sources of funding.

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