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News Release from Comptroller Susan Combs

For Immediate Release
February 04, 2009

Comptroller Susan Combs Says Future Water Shortages
Threaten Texas’ Way of Life

(AUSTIN) — Developing and protecting our water resources is one of the most pressing long-term issues facing Texas, state Comptroller Susan Combs said today.  Ensuring adequate and reliable sources of clean water is essential to protect the health of Texas citizens and the strength of the state economy.

“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.”

The state could lose $466 million in tax revenue in 2010 and up to $5.4 billion by 2060 due to decreased business activity caused by insufficient water.

In addition to population growth, Texas’ vulnerability to drought makes long-term water planning both 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.

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

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.  Liquid Assets: The State of Texas’ Water Resources reports Texas currently does not have enough water to fulfill all of its estimated future needs.  Without new management and conservation measures, in the event of a drought, water needs could increase from 3.7 million acre-feet in 2010 to 8.8 million acre-feet in 2060.  If Texas were to see a drought-of-record, up to 85 percent of the population in 2060 could experience water shortages.

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.

To meet Texas’ growing needs, Liquid Assets: The State of Texas’ Water Resources 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. To ensure the state gets the most for its money and meets the critical water needs of all Texans today and in the future, Liquid Assets: The State of Texas’ Water Resources recommends further examining the issue of water conservation to ensure all communities are making an effort to conserve existing water supplies, and strengthening oversight and accountability to ensure funds go only to projects that are truly needed.

Liquid Assets: The State of Texas’ Water Resources recommends that officials considering proposals for water project funding should try to balance these criteria:

  • Adequacy — the financing mechanism should be sufficient to cover identified costs without burdening those who pay the fees.
  • Equity — the cost of water projects should be spread among all user groups in proportion to their demand for water.
  • Specificity — funds raised for water development projects should not be diverted to other needs.
  • Affordability — the plan should be sensitive to water users’ ability to pay, since a certain level of water use is non-discretionary.
  • Simplicity — the plan should be easy to administer and follow.
  • Conservation — the financing system should encourage water conservation and discourage inefficient use.

“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.”

Liquid Assets: The State of Texas’ Water Resources can be found on the Comptroller’s Web site at www.window.state.tx.us/specialrpt/water.

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