New $15.9 bil. Delta tunnel cost estimate: Revisiting DWR's 2018 single-tunnel economic analysis with updated costs shows it is a bad investment for water agencies.

As reported in the Sacramento Bee, the cost of a single-tunnel Delta conveyance is now estimated at $15.9 billion.  In a previous 2018 analysis to support a short-lived proposal to stage the twin-tunnel WaterFix proposal, DWR estimated the single-tunnel 1st stage of WaterFix at $11.1 billion in 2017 dollars, which is equivalent to $11.7 billion in 2020 dollars.  This is a 35% increase in constant dollars, and should lead the Governor and the dwindling number of water agencies that still support the single-tunnel delta conveyance facility (DCF) to reevaluate the investment.

That 2018 analysis wildly overstated the economic benefits of a single-tunnel to participating water agencies, but for now let's accept their estimate of benefits.  The image below shows the results of that analysis (Table 5, with no federal subsidy).

Simply updating the costs to this latest estimate ($15.9 billion in 2020 dollars is equivalent to $15 billion in the 2017$) reduces the benefit-cost ratio for SWP urban agencies from 1.23 to 0.92, and for agricultural agencies from 1.17 to 0.87 in the trading scenario.

That's a bad investment, but it is actually much worse than that.  The 2018 analysis assumed the project would be operational in 13 years, whereas the new cost estimates a 20 year delivery period.  I didn't incorporate the extra 7 year wait for benefits in the above recalculations of the b-c ratio, but it would make it even lower.

At some point, we might see a revised economic analysis that manufactures new benefits to magically get the benefit-cost ratio over 1.  Readers of this blog know that DWR and MWD already have an established track record of inventing new benefits as new information reveals the delta tunnel(s) to be a worse and worse investment.  

P.S.  Thanks to Restore the Delta for archiving the 2018 analysis online for the public record.  DWR has wiped their previous links, and I couldn't find a saved copy in my files.   

Water Blueprint proposes a valley wide sales tax to fund their irrigation water plan. Is it equitable? Is it feasible?

 Earlier this month, CSU-Fresno hosted the event "Funding Water Infrastructure in the San Joaquin Valley." The vast majority of the event was focused on the so-called "Water Blueprint for the San Joaquin Valley," a high profile new investment plan for irrigation water.

At the event, the Blueprint rolled out a proposed funding plan - the centerpiece of which is a proposed 0.5% special sales tax in the 8 counties of the San Joaquin Valley.  While the sales tax would provide the vast majority of funding for the Blueprint's multi-billion investment strategy, the funding plan also includes a modest $4 per acre foot charge on water users and hoped for matching funds from the state and federal government.  In most years, the Blueprint projects the sales tax would generate 7 times more revenue than water user fees. 

The sales tax is a bold new idea in water finance, but not a good one as proposed.  It is inequitable across geography and income.  It probably isn't politically feasible either, despite the optimistic spin from a new poll presented at the event.  Below, I briefly discuss these issues and suggest some changes to the Water Blueprint to improve the equity and political prospects of their proposal.

Geographical Inequity - Taxes North San Joaquin Valley Counties Without Benefit

The tax is proposed for 8 counties, although the Blueprint plan only provides benefits to 5 counties from Madera south to Kern. The proposal would get 1/3 of its revenue from the North San Joaquin Valley counties while providing zero benefits to them - and potentially harm San Joaquin County's Delta region.

The Blueprint can correct this problem by dropping the 3 northern counties from their proposal, and leaders in the North San Joaquin Valley should demand that they do so.

I have argued for years that San Joaquin, Stanislaus, and Merced counties are ill-served by the 8-county region often used in state planning efforts.  The Blueprint, which has gained some influence with state leaders, is an excellent example of this problem.

Geographical Inequity - Benefits Wealthy Out-of-Valley Landowners 

In a previous post, I have pointed out that the biggest beneficiaries of the Blueprint agenda are farm owners, not poor farmworkers as much of the Blueprint PR claims.  Many of those farm owners, especially the wealthiest ones, live in wealthy communities far from the Valley.  These individuals can afford to pay for their own water infrastructure, and certainly shouldn't be subsidized by a sales tax imposed on the Valley's cash-strapped households.

The Blueprint can fix this adjusting their financial plan such that user fees are charged at full cost. The sales tax revenue would be used to provide water rate assistance to water users who live within 50 miles of their farm.  Income and acreage limits on the recipients of the sales tax funded water rate assistance should also be considered.

Inequity Across Industries - Agriculture Is Exempt From Sales Tax, But Other Industries Pay

There are many exemptions to sales tax, most notably to services and food.  Farming inputs and supplies are also exempt from sales tax, whereas most non-agricultural businesses in the Valley pay sales taxes.  It is bold for the Blueprint to propose a special sales tax benefit for an industry that already has an exemption from paying sales tax.

Income Inequity - Regressive Sales Tax Primarily Benefits Well-Off Landowners

The primary general argument against sales taxes are that they are regressive.  Lower-income households pay a higher share of their income in sales taxes than higher-income households.  The situation is the same here, and it is particularly problematic in this case as the largest beneficiary of the tax are the owners of farms - who generally have above average incomes in the Valley and include some truly rich out-of-Valley landowners as described above.

The Blueprint can improve this inequity by including funding to repair unsafe drinking water systems in the Valley to their plan.  The tax is still regressive, but funding clean drinking water with its proceeds will at least direct more of the benefits to low-income communities.

Political Feasibility - Will it Pass?

The Valley is not an easy place to get voter approval for a tax increase.  And as a special tax, I believe the Blueprint proposal would require a 2/3 vote to pass.  That's a tough hurdle, and the poll results are interesting if reliable.

First, while the poll focused on the sales tax proposal - in the one question that presented both a "water consumption tax surcharge based on use" and a "special sales tax" - respondents favored the use charge over the sales tax by a nearly 2-to-1 margin.  My read on this is that a proposal as I suggested above - user charges to cover the full cost with special tax revenue to defray costs to local users meeting residency, income and acreage restrictions - would be seen as more equitable and popular to Valley voters.

Second, the poll had a note of positive news for the sales tax: 69% of the respondents said they would be "very likely" or "somewhat likely" to support a special sales tax for water.  Is this poll reliable?  Is there really that much support?  A look at the last voter poll the Institute for Leadership and Public Policy did in cooperation with Valley water users suggests there polling may be too optimistic.

In October 2018, a few weeks before the vote on the Proposition 3 water bond, the same group released a poll of likely voters in the 8 San Joaquin Valley counties that found the following support for Prop 3. 64% Yes, 10% No, and 26% Don't Know.  In reality, 50.1% of voters in the 8 counties voted No, so their polling of Valley voters missed by an enormous margin in 2018.

I believe the Blueprint's special sales tax will lose big as proposed.  It might have a chance if the Blueprint adjust it to be more equitable in the following ways.

• Eliminate the 3 North San Joaquin Valley counties.
• Add funding for safe drinking water in disadvantaged communities.
• Propose a full cost user charge with the sales tax to defray expenses for non-wealthy water users who live in the Valley.

Reaction to CalMatters essay, "A social justice perspective of the Delta tunnel project"

Gary Kremen, vice chair of the Delta Conveyance Finance Authority, argues that building the Delta conveyance tunnel promotes social justice.  His argument is built around a rhetorical question that he fails to answer correctly. Kremen asks,

In a catastrophic levee failure, who stands to be hurt the most?

Correct Answer:  The people who die!  Shockingly, Mr. Kremen completely omits any mention of fatalities, which is rather obviously the most significant harm caused by the catastrophic flood he describes.  The earthquake induced flood he describes would come with virtually no warning, and if it triggered enough widespread flooding to harm water exports - it would surely be a mass fatality event wiping out small communities, family farms, and critical transportation, energy and local water infrastructure.  A more likely smaller earthquake induced flood would still do much of this damage with minimal impacts on water exports.  But the $11+ billion tunnel Kremen is promoting would protect none of the lives and also would not protect against most economic impacts.  It would not even fully protect water exports.  In contrast, investing in levee improvements protects all of these interest - including water exporters and human lives - from this catastrophic event.  Levee investments benefit all stakeholders.  That certainly sounds more like social equity to me.

I had high hopes that this kind of disaster rhetoric would die down after the Oroville disaster nearly killed thousands and wiped communities after the map.  Especially after post-Oroville reviews slammed the Department of Water Resources for safety lapses and prioritizing water export agencies over public safety.  Mr Kremen's commentary gives me little hope that public safety is a high priority for the Delta Conveyance Finance Authority he vice chairs. 

Since everyone has to make a COVID comparison in our commentary now, I should also point out that the state's response to COVID shows California is very willing to prioritize saving lives over maintaining economic activity during a disaster.  Building levees that protect lives and businesses would be consistent with California's clearly expressed values, whereas building a tunnel that protects certain business interests while ignoring death and destruction in vulnerable communities is not.

Here is another strange and incorrect passage from Kremen's so-called social justice argument.  He warns that not building the tunnel will reduce water to Central Valley agriculture, and

Reduced water to Central Valley agriculture would mean higher prices for food, higher carbon footprint from food importation and decreased food security. Higher food prices disparately affect those who are poor and vulnerable. It is well documented that the transportation related pollution for importing food especially damages communities of color.

First, I would point out to Mr. Kremen that the only agriculture output that would definitely be lost in the catastrophe he describes is in the Delta itself - and the tunnels would do nothing to protect it.  The droughts of 2014-15 reduced water supplies by more than double the amount exported from the Delta in a full year, and these had negligible impacts on food prices despite hundreds of thousands of acres fallowed.  The tunnels would not protect the poor from rising food prices, nor would it protect them from rising water bills.  The carbon footprint, food importation comment is just weird.  Kremen suggests central valley farm products don't travel far, and are mostly sold at your local farmers market.  In fact, Central Valley agriculture is extremely export oriented, very industrial, and ships its crops across the world.  Why would a decrease in Central Valley farm output increase global food shipping costs? 

But the really strange part of this comment is the suggestion that the tunnel is actually good for agriculture - a statement which is demonstratively false.  Many agricultural agencies - including the entire Central Valley Project and multiple agricultural state water project contractors are not participating in the Delta tunnels because it makes water too expensive for farming.  The financial plan for the tunnels that Kremen and others have developed will result in farmers not participating and giving up a portion of their water exports to urban areas due to its extreme costs.  I have heard leaders of urban agencies, including Kremen himself, suggest that tunnels that price farmers out of the state and federal water projects is a business opportunity for urban agencies to pick up their water supplies. 

As On the Public Record points out in their comments on Kremen's column, the Delta tunnel is an engineering project not a social justice project.  For years, proponents of this Delta conveyance have tried to put green wrapping paper around the project (a tradition Kremen continues here with his claims about the carbon footprint of food importation).  This attempt to wrap it in the cause of social justice is even more disturbing.  Let's hope this isn't a new trend.   

Covid-19 Pandemic Causes Historic Drop In Farm Employment

The latest employment data released by the California EDD on June 19 shows a massive decline in farm jobs since the Covid pandemic hit.  The graph below shows seasonally adjusted farm employment from January to May for each year since 2013, a period which includes some of the most severe droughts in California history.  None of those events came close to eliminating jobs like the Covid pandemic.  I am not surprised at the loss in jobs, but the magnitude caught me by surprise.  EDD estimates a loss of over 100,000 farm jobs since February (seasonally adjusted), a nearly 25% decline in farm jobs compared to a 14% decline in non-farm jobs over the same period.




This may seem surprising since farm workers are defined as "essential" and most essential industries have seen lower than average job loss - and some like grocery stores and delivery drivers have seen no loss in employment at all.  In addition, a large share of farm workers do not qualify for enhanced unemployment benefits that have discouraged some lower-wage workers from seeking employment.  So why such a large decline?  A loss of this size is probably caused by a combination of factors.

Covid rates are high in farm labor communities.  Imperial County has by far the highest Covid case per capita in the state, and many other big agricultural counties have seen big increases and increasingly rank among the hardest hit locations in the state.  Crowded living and working arrangements and poor access to health care make Covid a particularly difficult challenge for farm worker communities.  Illness among workers and their families, concern about dangerous working conditions, and increased caregiving responsibilities can all reduce the supply of people willing and able to work farm jobs.  Changes to the flow of people across the U.S.-Mexico border during the pandemic are also likely contributing to changes in labor supply, although H-2a agricultural visas have been exempted from new immigration restrictions for now.

In addition, there have likely been changes to farm labor demand as food demand has shifted from restaurants to home cooking.  Restaurant closures have substantially reduced the demand for fresh produce, and other labor intensive specialty crops. It is likely that these crops are not being harvested or planted at typical levels which reduces labor demand.   Grocery store shelves suggest most people at home are making eggs, pasta, and rice - not salad.  

I am sure there are more contributing factors to this historic shift in the data.

Finally, I should mention two notes of caution.  First, these initial employment estimates are based on samples and are subject to future revision as full employment tax filings are tabulated.  Historically, revisions have seemed higher in the farm sector than other areas so caution is always warranted.  But I have never seen a decrease anywhere this magnitude, so it seems very likely that me that there will still be very large losses even if the numbers are eventually revised higher.  Second, the graph I displayed above is seasonally adjusted data - so the decrease it shows is actually a smaller than usual seasonal increase in the unadjusted data.  Farm jobs have increased by 30,000 since March, but that is much much lower than the typical increase in spring, and California farm employment is estimated to be 20% lower (almost 100,000 fewer jobs) than last May.

Social Distancing Benefits Exceed the Costs

There is a lot of shocking economic news at the moment with new terrible projections of economic impacts of Covid-19 by the day.  I will be contributing to the scary economic projections with some local/regional assessments later this week.

When reading all this news, it is natural to wonder if the economic costs of fighting the pandemic through stay-at-home orders and social distancing is too great.  President Trump has repeatedly said, “We can’t have the cure be worse than the problem.”  

Readers of ValleyEcon know that I believe in cost-benefit analysis as a tool to help us analyze complex issues like Covid-19 regulations.  The data is bad, but do not by themselves suggest we should be focused on reopening the economy over fighting the virus.  In fact, economic cost-benefit analysis strongly supports the stay-at-home, social distancing orders in California and the extension of those policies nationwide. 

It is important to note that current estimates economic decline are not the cost of stay-at-home policies, because the baseline for comparison is not a business-as-usual no-pandemic scenario.  To estimate the cost of stay-at-home policy, we would have to compare it the economic loss if the pandemic were allowed to spread unchecked as schools and businesses tried to remain open in the face of much larger levels of illness and fatalities.  While the economic loss under our current stay-at-home policies is massive, about 30% of daily economic output according to Moody’s Economy.com, it may not be significantly higher than the economic losses under a no-policy scenario.

Well-established economic tools can also help us estimate the benefits of stay-at-home policies, which are widely estimated to prevent 1-2 million fatalities in the U.S. compared to a do-nothing scenario.  The value of a statistical life is a concept that has been rigorously estimated and refined over decades and used in cost-benefit analysis of environmental, public health and safety regulations for air quality, chemicals, highway improvements and more. 

Back of the envelope estimates of the benefits of reduced coronavirus fatalities from social distancing efforts in the United States range between $10 and $20 trillion.  A detailed paper from University of Chicago economists using very conservative approaches, including low-end estimates of averted fatalities and acontroversial value of a statistical life that decreases with age, estimates the value of social distancing policies at more than $8 trillion.  That conservative estimate of benefits equates to about one-third of U.S. annual GDP, far exceeding any reasonable estimate of the cost of social distancing policies compared to a no-action coronavirus scenario.

In this case, strong public health policies are also the best economic policies.  

Economic Impacts of Potential Water Reductions in the San Joaquin Valley: Reaction to the Blueprint Report

The Water Blueprint for the San Joaquin Valley released a report (hereafter referred to as the Blueprint Report) on the economic impacts of the Sustainable Groundwater Management Act (SGMA) and additional potential water supply reductions in the San Joaquin Valley.  The Blueprint is a group advocating a plan to replace up to 2.4 million acre feet of groundwater overdraft through increasing water exported from the Delta and a variety of government subsidized water supply infrastructure.

My assessment is that the Blueprint Report substantially overestimates the total economic loss to the San Joaquin Valley from sustainable groundwater and environmental policies, and provides misleading analysis of the distributional impacts of the costs between landowners and laborers. Specifically, the Blueprint Report

• Overestimates the economic impacts of reduced water supplies with estimates that are 3 times higher than other, more credible, reports,
• Hides the finding that farm land owners are the biggest beneficiary of its agenda, inaccurately suggesting that the Blueprint's primary impact will be to help disadvantaged communities,
• Fails to acknowledge the limitations in its economic model or place its results in the context of current and future labor market conditions in the Valley, and
• Fails to recommend strategies to help disadvantaged communities other than the old failed approaches of more subsidized water and weaker environmental regulation.

1. The economic impacts are inflated, about three times higher than PPIC estimated for SGMA impacts from a similar amount of farmland fallowing or retirement.

Comparing the Blueprint Report to recent PPIC analysis of similar issues show that both estimate similar acreage of farmland fallowing or retirement due to SGMA, 798,000 vs 749,000.  However, the Blueprint Report estimates that the decrease in crop production due to SGMA will have roughly the same distribution of crops as current crops grown in the region, whereas PPIC uses an economic model to estimate that the decrease in production will be concentrated in lower revenue crops.  Unlike PPIC, the Blueprint Report does not explain the model used to translate water reductions into crop reductions, but does state that "future restrictions on ground and surface water use in the region may reduce the scale of farming in the Valley by roughly one-fifth. Farm revenues and net income fall by similar percentages."

Specifically, the Blueprint Report estimates about 60% of the decreased crop acres are in trees/vines, compared to about 20% in the PPIC report.  The Blueprint Report forecasts that just over 20% of the acreage losses are to field/hay/pasture crops, whereas PPIC projects about 2/3 of the decrease in acreage is in field/hay/pasture crops.  As a result, the Blueprint Report estimates farm revenue and employment losses about three times higher than the PPIC for a similar decrease in water supplies and acres taken out of agricultural production.  Past experience with water shortages, economic theory and common sense suggest the PPICs estimates are likely to be more accurate than the Blueprint Report.

As shown above, the Blueprint Report is a strong repudiation of the economic findings in the 2019 PPIC report, and yet it doesn't even mention them.  This is another way that the Blueprint Report is highly misleading.  A credible report would cite other estimates and explain why they believe their approach is better.  I wonder if the PPIC researchers will have anything to say about these estimates that are three times higher than their own, or follow the Blueprint Report's lead and pretend each others work doesn't exist.

2.  The analysis obscures and ignores the implications of its most significant result, that direct losses to farm owner income total $1.9 billion per year in its main scenario - almost double the direct change to farm employee compensation.  

For the SGMA + scenario, the BluePrint Report estimates a whopping $1.9 billion income loss to owners of farms on a gross crop revenue loss of just over $7 billion.  This result, which is ignored in the Blueprint Report's summary, reflects an average 27% operating margin for these farm owners, a profit margin that would make the most profitable tech companies and Wall Street CEOs envious.  It certainly would have been interesting to see the report trace the calculations and geography of the $1.9 billion income change to farm owners in the same detail as it traces the estimated $1.1 billion loss to farm labor compensation.  How much of the $1.9 billion annual loss to owner income accrues outside the Valley in non-disadvantaged communities like Beverly Hills, Pebble Beach, or Manhattan?

If their report is accurate and the Blueprint would protect nearly $2 billion in annual income to farm owners, then perhaps these landowners should be willing to pay for most or all of the Blueprint projects themselves instead of asking for federal and state taxpayers to cover the bill.  If the Blueprint is really about helping farm workers as Blueprint PR suggests, then it seems reasonable to ask the farm owners to pay up to a billion dollars per year (just over half of their self-estimate of protected income) to implement the Blueprint's agenda and keep more farm workers employed.

Of course, I do not expect that the farm owners are either willing or able to pay for their multi-billion dollar water infrastructure agenda.  As discussed in Point #1 above, more credible assessments show that both the $1.9 billion farm owner loss and $1.1 billion loss to employee compensation are about three times too large.  The public should interpret the failure of the farm owners to offer substantial funding to implement the Blueprint as strong evidence that the economic impacts in this report are overblown, and that much of the Blueprint agenda is not cost-effective.

3.  The Report does not recognize the limitations of its employment model, and fails to put its findings in the context of the broader demographic and economic changes that will occur in the Valley over the 20 year SGMA implementation horizon.

I am an IMPLAN user myself, so I am not going to criticize the model choice, but the report should reveal more about its shortcomings in this application.  IMPLAN is best used for descriptive analysis of the current economy and its linkages, and short-run analysis of relatively small changes to output or demand.  It is not designed for long-run analysis, or for analyzing labor-markets that do not fit the underlying assumptions of the model.  The assumptions include no input price effects or supply constraints.  This implies a perfectly elastic labor supply curve where jobs shift proportionately with a change in production and labor demand, whereas the evidence shows farm labor markets have some characteristics of monopsony where a labor demand shift has a smaller than proportional effect on employment.   IMPLAN does not model labor supply or unemployment.  Even without getting into the econ weeds to explain why, long-time observers of the Valley economy will recall that these IMPLAN based studies have a history of overestimating employment losses in California during water supply and agricultural production declines events such as droughts.

It is also important to put the resulting changes into the context of change phased in over 2 decades when there will be significant demographic and economic changes in the Valley that have large effects on the farm labor force and agriculture in general.  The IMPLAN model assumes no supply constraints, meaning that the current data it uses to calibrate the model assumes farms currently have all the labor they want. 

This 2019 report from the California Farm Bureau Federation provides much needed context and background on labor market conditions.  Below is a summary from UC-Davis' Rural Migration News.

A California Farm Bureau Federation-UCD survey of growers in Spring 2019 found that 56 percent of the 1,071 respondents could not hire as many workers as they wanted at some point during the previous five years, rising to 70 percent in 2017-18. As a result, more than a third delayed activities such as weeding or pruning, or did less of these activities than in the past.

In response to fewer workers and rising wages, over half of respondents are using mechanization where available, a third are changing crops, often switching from crops harvested by hand to tree nuts, and some are raising wages to attract and retain employees.

Every economic and demographic projection of the Valley and its farm economy project that farm workers are only going to become more scarce.  Crops already go unpicked due to labor scarcity.  The Valley's population is growing, but fewer and fewer of its residents want to be farm laborers.  In this context, there is no reason to expect that a decline in farm output or acres cultivated will lead to a directly proportional shift in farm employment or rising unemployment as this report suggests.  In fact, since the majority of farmers actually want to hire more labor under current conditions, it is certainly plausible that farmed acreage can contract to some degree without any decrease in employment.

Final Thoughts

I know several people involved in the Blueprint initiative who are very sincere and have good intentions.  I listened to their presentation in Fresno at the California Economic Summit.  The focus seemed to be on finding a message to give the Blueprint appeal to a broader political audience, but it seemed more focused on environmental impacts - not a plan to pitch the agenda as a benefit to the poor.  My suggestion to a few people at the meeting who were involved in the rather fuzzy Blueprint organization is that they add stronger emphasis on new technologies and consider reducing water shipped out of the Valley to coastal urban areas as a better way to keep more water in the Valley than squeezing more out of the over-tapped Delta.  I also reminded them that most of the Delta is in the San Joaquin Valley, and that perhaps they should call it Blueprint for the Tulare Basin.

I don't remember hearing any mention of an economic impact report focused on disadvantaged communities.  Perhaps they walked away from that conference and all the discussion of inclusive economic growth with a strategy to market their agenda as a benefit to disadvantaged communities.  Unfortunately, the Blueprint agenda doesn't do much to lift up the poor in the Central Valley.  It is a status quo agenda about preserving the current Valley economy with its persistent outcomes of poverty, inequality, pollution and high prosperity for most of the Valley's landowners.  The new Blueprint Report misleadingly suggests that the biggest beneficiaries of their agenda are disadvantaged communities, when the main beneficiaries would be the land owners and water agency management and consultants behind the Blueprint.

Is it possible to advance a water agenda that supports inclusive economic growth in the Valley?  Yes, but it is going to take political courage from the Newsom administration and some folks within the Blueprint organization as it continues to develop its proposal.  The Newsom administration wants inclusive economic growth in the Valley, and the farmers behind the Blueprint want more government investment in their priorities and relaxed environmental regulations.  The State has some leverage, and the Governor should use it to demand better outcomes from any public investment and changes to future management.

Thus, I suggest that future government actions to support the water user agenda (including the voluntary agreements) be conditioned on significant changes that improve equity in the San Joaquin Valley agricultural economy and ensure more of the economic benefits accrue to farm workers and the communities in which they live. Here are my initial suggestions for a progressive Governor to consider in a "Blueprint for an Inclusive Economic Development Agenda for San Joaquin Valley Water."

• ban the sale or transfer of related water supplies from Valley agriculture to urban areas outside the Valley;
• require farms receiving water from the government financed projects to pay a higher prevailing wage, similar to the requirements on affordable housing developers who receive public funds.
• impose a modest fee on agricultural water supplies to match state investments in safe drinking water for Central Valley disadvantaged communities.
• require increased regional self-sufficiency and reduced imports from the Delta in coastal urban areas, freeing up Delta water supplies for the benefit of the environment and agriculture.
• support increased R&D and early implementation of new water technologies, especially those that could be produced and developed in the Valley and marketed to solve solve growing water challenges across the globe.  
• require landowners to live on or near (within 30 miles) their property that receives water from the government projects.
• orchard planting permits.

If Valley water users are not willing to consider anything other than unconditional subsidies and lower environmental protection, the Newsom administration should not be afraid to walk away.  Walking away from the Blueprint agenda doesn't mean walking away from the San Joaquin Valley.  The Valley economy is capable of adapting to a smaller agricultural footprint over the next two decades, and public investment towards inclusive economic development in the Valley can focus on building the non-agricultural economy through initiatives like Fresno Drive.

P.S.  After posting this, I saw Lois Henry's article about the Water Blueprint presentation at the Kern County Water Summit, and took a look at the Scott Hamilton powerpoint she described.  I am intrigued by the concept of diverting from the Delta with low-velocity perforated pipes under gravel that he presented even if I am skeptical it can yield an additional 2 million acre feet per year from the Delta (one wonders if that estimate is as exaggerated as the doom predictions in their economic impact report).  The concept is somewhat reminiscent of Bob Pyke's idea of permeable levees in his West Delta Intakes proposal and I encourage creative thinking like this.  Importantly, it illustrates the need of agricultural water users for Delta proposals that are substantially less expensive than the tunnel vision promoted by the Department of Water Resources and Metropolitan Water District.  And it shows the foolishness of DWR's approach with the Delta tunnels to postpone economic and financial analysis until after the EIR for the tunnel is done.  I also noticed that Hamilton's Powerpoint did not hide the farm owner income effect or focus predominantly on disadvantaged communities when referring to the economic report, so that is encouraging too.

Thank you to Lois for posting this.