Wednesday, August 1, 2012

You don't hear this often from the Chamber of Commerce

As evidenced by the Governor's news conference, rationalizing the expense of the Delta tunnels causes people to say all sorts of strange and contradictory things.  This passage from LA Chamber of Commerce President and a prominent Silicon Valley business leader in the SF Chronicle startled me as much as Governor Brown's blunt comments.
The public water agencies that rely on delta water exports would pay for the new project, so the final proposal must make business sense for them. The same holds true for the state and federal governments, which would invest in habitat restoration.
Huh? Government agencies want to issue billions in debt and spend ratepayer and taxpayer money on a big project; thus it must make business sense since government agencies in California want to do it.

This is the logic of the LA Chamber of Commerce and the the Silicon Valley Leadership Group? It sure isn't what you typically hear at a Chamber of Commerce breakfast.

Is this no longer the state where local governments are declaring bankruptcy?  Is this no longer the state with the nation's lowest credit rating?  Is this not the state that just passed a budget that proposes cutting 3 weeks off the school year if the highest in the U.S. income and sales tax rates are not further increased?  Aren't some of these agencies $500 million behind in repaying interest-free federal loans that were made 50 years ago? 

Beyond the surprising faith in the business planning of government bureaucracies, the statement is factually wrong about the willingness of these government entities to pay. Many of those public agencies have openly expressed doubts about whether they want to pay for this revised plan with sharply reduced water supplies, and the water bond that would pay for habitat restoration is seen as so unlikely to pass it has been postponed twice. 

[The rest of the article had facts wrong, but I expect the chamber of commerce to say things like levees are dissolving.  I do not expect them to say there is no need to question the financial acumen of government agencies.]


  1. Perhaps they consider the smaller local districts, or the ag districts in the valley, to be more aggressive about analyzing whether paying for the tunnels is in their own interest. The tunnels, at least, aren't public goods, which is often when people like the Chamber of Commerce get confused about what government should be doing.


  2. You are not the first to make this suggestion, and maybe that generous interpretation is right.

    It may also be that they don't really care if poor households pay an extra $100 per year on a water bill, or they don't care (or perhaps want) if some farmers to sell to urban areas because their crops won't support those prices.

  3. Both of those possibilities sound very likely to me. Could be that all three (and more things) are true.