Texas May Consider Dedicated Funds for Water Development

Texas State Comptroller Susan Combs recently released a new report, "Liquid Assets: The State of Texas’ Water Resources," which examines the practical and policy barriers facing local and statewide water planners and possible funding mechanisms that could be tapped to develop water resources.

Groundwater provides 59 percent of Texas’ available fresh water, surface water provides approximately 40 percent, and the remaining 1 percent is made up of reused ground and surface water. Both sources are dwindling — groundwater due to over-pumping and surface water due to sediment accumulation in reservoirs

“By 2060, more than 46 million people could be living in Texas, and demand for water will increase by an estimated 27 percent,” Combs said. “According to the Texas Water Development Board, failing to meet this demand could cost businesses and workers in the state approximately $9.1 billion per year by 2010 and $98.4 billion per year by 2060.”

Texas’ vulnerability to drought also makes long-term water planning imperative and challenging, Combs said. Each of the several one- or two-year droughts in Texas during the past decade has cost agricultural producers and businesses between $1 billion and $4 billion annually.

The report also looks at the progress made by Texas’ 16 regional water planning groups and the challenges those groups face in addressing their water needs.

In 1997, the Texas Legislature established a comprehensive water planning process in which the state’s 16 regional water planning groups work with the Water Development Board to assess future water needs in their regions, propose solutions and estimate their cost, culminating in a statewide water plan that is updated every five years. This “bottom-up” approach allows maximum input from local stakeholders such as agriculture, industry, cities, water utilities and power companies.

The current State Water Plan, adopted in 2007 by the Water Development Board, includes $30.7 billion in proposed projects. Water projects are funded by a combination of state and local dollars. In the last four years, state funding has made up approximately 2 percent of total water project funding. In fiscal 2008, the state provided $137.9 million. Cities and other local jurisdictions say the state will need to provide $2.4 billion by 2060 to help initiate essential, large-scale projects in communities throughout Texas. And, TWDB recently estimated that the amount needed from the state for these projects could increase to $16.6 billion in the next statewide water plan in 2012.

The report says officials should consider a dedicated funding source for water development. Options reviewed by the Joint Committee on State Water Funding in the Legislature include a sales tax on currently tax exempt water and sewer services provided by public water supply systems; a water conservation and development fee on customers’ utility bills; increasing the water rights fee currently paid by water rights holders; a water connection or “tap fee” on each water connection in the state; and a sales tax on bottled water.

“Ensuring reliable water supplies for the future and balancing those supplies appropriately between rural and urban areas, and among agricultural, municipal, industrial and electricity-generating users is the challenge of our day,” Combs said. “State and local policymakers must also consider the economic impact of any new regulations affecting landowners’ private property rights in the water under their land. They can use this report as a tool to help drive sound and prudent water policy in the state.”

The report can be found at www.window.state.tx.us/specialrpt/water.