California’s leaky bucket theory of public improvement

Unfortunately, Californians have come to expect significant levels of waste and incompetence when it comes to government programs. Just last week, we learned that the “new” $290 million computer system for the California Department of Tax and Fee Administration — in the works for over a decade — was having significant problems with tax filers trying to submit their quarterly returns. Despite California being home to Silicon Valley and the best high-tech minds on the planet, the State of California has a sorry history of failure when implementing big computer projects.

Although Will Rogers famously said it’s good that we don’t get all the government we pay for, Californians surely want more value for the outrageous level of taxation under which they are burdened. Other states provide better and higher levels of public service with much smaller tax burdens.

If one is carrying a bucket of water from a trough to a burning barn, it is best to have a bucket that doesn’t leak. If not, you’ll arrive at the fire with an empty bucket. When Sacramento carries taxpayer dollars to some popular project or program, they do so with a leaky bucket that virtually ensures that few dollars go to the intended target.

A story in the Sacramento Bee caught our eye last week about 2014’s Proposition 1, a $7.1 billion water bond measure approved by the voters. Not surprisingly, the bond measure was widely supported by a broad range of interest groups and received only token opposition. Given the high priority water has in the hearts and minds of Californians, such support is understandable.

However, much of the support for that bond was driven by the need for increased water storage, especially surface water storage, i.e., dams. So, although the measure passed fully four years ago, where are we on the construction of the promised projects and how much funding will they receive? In other words, how much leakage is going on here?

The biggest surface water project to be financed is the Sites Reservoir, in an area north of Sacramento, designed to store water from the Sacramento River. For water users, especially in agriculture, the Sites project has been on the top of their wish list for decades. The good news is that the project will get the lion’s share of the $2.7 billion of Prop 1 proceeds dedicated to water storage. But the California Water Commission, which has been openly hostile to new dams, only awarded $816 million of the $5.2 billion cost of the project. And even that paltry amount was awarded after political pressure was exerted on the Commission which had originally recommend zero dollars for new surface water storage.

A similar response of hostility from the Commission was shown with respect to the other new surface water project, Temperance Flat on the San Joaquin River, which was awarded only $171 million. That represents less than ten percent of the $2.7 billion cost.

Moreover, it is not just the lack of meaningful funding for the most important projects, but the delay as well. Threatened lawsuits on both projects raise the question as to whether either will ever be built.

If this sounds familiar, it should. Politicians and bureaucrats frequently place measures on the ballot promising the sky only to deliver something that falls way short, if they deliver anything at all. California’s high speed rail project is unquestionably the best example of this. All the promises made with respect to cost, time of completion, speed of the train, etc., have been shown to be the stuff of fantasy.