Background
Californians Get Water From Several Sources. Most of the water used for drinking and farming in California comes from rain and melted snow. The areas where these streams and rivers begin are referred to as “watersheds.” California has built dams, reservoirs, and canals to store water and deliver it around the state. Water is also pumped from underground (referred to as “groundwater”), especially during dry years when not as much rain and snow falls. A small share of the state’s water comes from other sources, such as cleaning and reusing the wastewater that households and businesses send into sewers (referred to as “water recycling”).
Most Spending on Water Is by Local Governments. Local government agencies—usually water districts, cities, and counties—fund most of the projects that provide clean water for people to drink, supply water for farming, and protect communities from floods. These agencies spend about $25 billion each year on these types of water-related activities. Residents pay for the majority of this spending when they pay their water and sewer bills.
Voter-Approved Bonds Are a Common Source of State Funding for These Projects. The state mainly uses general obligation (GO) bonds and the state’s General Fund to pay for water and environmental projects. GO bonds are a way to borrow money. Voters give the state permission to sell bonds to investors, and the state uses that money as “up-front” funding for projects. The state then repays the investors over time, with interest, from the General Fund—the state’s main operating account, which also pays for education, prisons, health care, and other services. (For more information on the state’s use of bonds, see Overview of State Bond Debt from LAO.) Since 2000, voters have approved about $31 billion in GO bonds in statewide elections to pay for different types of water and environmental projects. Of this amount, roughly one-third was still available to pay for new projects as of June 2018. This includes $4 billion that was approved by voters through Proposition 68 in June 2018.
Proposition 3 Proposal
$8.9 Billion Bond for Water and Environmental Projects. This proposition allows the state to sell $8.9 billion in new general obligation bonds for the following water and environmental projects:
- Protect, restore, and improve the health of watershed lands: $2.495 billion
- Improve and increase the water supply: $2.130 billion
- Improve habitats for fish and wildlife: $1.440 billion
- Upgrade water facilities such as dams, canals, and reservoirs: $1.227 billion
- Clean up, recharge, and manage groundwater: $1.085 billion
- Reduce flood risk: $500 million
Source: LAO Analysis of Proposition 3
