Republicans Are Socialists — At Least With Water

Republicans are socialists.

At least when it comes to water.

Uncharitable Democrats would likely call their Republican colleagues shameful hypocrites since, given some of the legislative proposals offered by the majority party, socialism isn’t as nasty a sobriquet as it might be to a GOP lawmaker.

But that’s what the Republicans are — socialists.

Again: At least when it comes to water.

Republicans insist they’ll only vote for improvements to California’s system of delivering water, largely from the north part of the state to the south, if those improvements are paid for with general obligation bonds.

California taxpayers pay for general obligation bonds, usually several generations of them since the average bond repayment schedule is 30 years.

Democrats, beginning with Gov. Pat Brown who 40-some years ago initiated the State Water Project, have traditionally supported financing such improvements through revenue bonds paid off by the principle beneficiaries of the projects – large metropolitan water districts, Central Valley irrigation districts and agricultural users, who receive most of the state’s water and pay low rates set by the federal government’s Central Valley Project.

When they receive water, anyway. This year, the third year of a record-setting drought, the Central Valley Project turned off the spigot. The State Water Project is delivering only 20 percent of demand.

Republicans certainly would not pimp the use of general obligation bonds to increase spending for California’s social programs. Nor would they be likely to embrace general obligation bonds to restore at least some of the $16.5 billion in state support for public schools they and their Democratic colleagues have eliminated over the past two budget years.

When it comes to issuing more debt – except as it relates to water — the GOP rap is tediously familiar: That would be irresponsible. It will burden future generations of Californians with staggering debt. Our children and our children’s children’s children. And so on.

State Treasurer Bill Lockyer, a Democrat, notes in a recent report that in the current fiscal year, the state is paying $6 billion in debt service. Aw percentage of general fund spending, debt service will be 7.7 percent in the fiscal year beginning July 1, 2010 and nearly 9 percent the following year.

Lockyer notes this up-tick in debt service payments, which will climb to more than 10 percent of general fund spending in the fiscal year beginning July 1, 2014, comes at a time when the state budget is estimated to have a cumulative deficit of $38 billion.

The size of the original general obligation water bond was $12 billion — $3 billion less than Gov. Arnold Schwarzenegger’s Economic Recovery Bonds whose sale five years ago was billed as the permanent closure of the chronic budget gaps between state spending commitments and revenue.

Senate President Pro Tempore Darrell Steinberg, a Sacramento Democrat, told representatives of public employee unions at a meeting on October 8, that the new bond – while still general obligation – would be smaller. Something on the order of $9 billion, Steinberg said.

Public employee unions see each additional general fund dollar spent on debt service as less money to maintain state and local government operations, which are conducted largely by members of their unions. More money spent on repaying debt is less money that can be spent on employees and employee benefits.

Steinberg said the current water proposal would cap debt service on the water bond at $100 million each year through 2014, coincidentally his last year in office. Pity the poor schmoe who succeeds him – and the members of public employee unions whose jobs are axed to cover the balloon payments that blossom after Steinberg’s departure.

Cynical observers suggest that the Republican stance on using general obligation bonds instead of revenue bonds is a two-fer. Not only does it protect water districts and agricultural users from paying for water system improvements, it harms a political enemy — the public employee unions who generously donate to Democratic legislative campaigns.

It’s puzzling why the leader of the Senate would countenance use of one penny – let alone $9 billion — of general obligation bond funds for this or any other purpose.

As the public employee unions know all too well, first call on general fund money is debt repayment. Second is public schools.

After embracing the ill-considered Hobson’s Choice of reducing spending by $400 million for the state’s lowest performing schools in order to avoid potential cuts to health and welfare programs of a like amount, why make the options even starker by increasing the size of California’s annual debt service obligations?

Detractors say Steinberg is more eager to make a deal than fight for a good one and certainly in a traditional political environment the most powerful Democrat in the state wouldn’t open the door for — let alone treat with — a termed-out, toast-in-one-year Republican governor who, at the conclusion of the last budget go-round in July, thanked Steinberg and his fellow Democrats by vetoing $400 million in social program spending the Democrats traded so much away to protect.

While Democratic lawmakers accuse the governor of thinly veiled extortion for saying he will veto hundreds of pieces of legislation if he isn’t given a water deal of his liking, they might consider leveling the same charge at their GOP buddies who, as in the current instance, routinely premise participation in the political process on Democrats acquiescing to their policy ransom demands.

Better yet: Democratic legislative leaders might consider taking a page out of the Nancy Reagan playbook and just say no. 

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