After Legislative Session, What's Next for Water?

Water legislation seems to have assumed roughly its final shape. Assuming a few more loose ends get tied up, including Gov. Rick Perry’s signature, Texas will draw $2 billion from its Rainy Day Fund for water-supply projects. Also, in a November referendum, voters will decide whether to sign off on a pair of funds to administer the money.

But there is plenty of action still to come on water, even after lawmakers go home. 

The most immediate issue is a shake-up of the Texas Water Development Board, which will oversee the administration of the extra money. State Sen. Troy Fraser, R-Horseshoe Bay, was the driving force behind a change in the board’s structure. Going forward, as the current plan has it, the agency will be led by three full-time board members, rather than six part-time members. 

The governor would appoint those members, and Fraser said that he expects them to take an active role in visiting communities. As a hypothetical example, “If Dallas is going to be out of water in 20 years and they want to build a reservoir,” Fraser said he wants the new board members out visiting the site and talking to people.

State Rep. Lyle Larson, R-San Antonio, also envisions an active role for the water development board’s leaders. The new water program “will only be as successful … as the leadership of the agency,” he said. “If we’ve got folks that are not actively promoting developing projects across the state of Texas, then I think we’ll struggle in getting some of these projects built in the way that [State Rep. Allan Ritter, R-Nederland, the leading House member behind the water bill] envisioned.”

The role of the executive director will also change. “What now is the executive director will become more likely a CFO,” Fraser said. Overall, however, he said the changes to the agency were “not really that drastic.”

Projects seeking state funding help will also need to be ranked. Prioritization is “obviously the key thing we’ve got to do,” Fraser said. Regional planners, whose work underlies the wish list of projects in the state water plan, are “going to give us a one-through-ten,” he said.

Laura Huffman, head of the Nature Conservancy in Texas, said that the water legislation spells out how to prioritize projects on both regional and state levels, with criteria including the urgency of need, the financial viability of the borrowers and the sustainability of the projects. This should allow Texas to “make sure that high-quality projects are funded first,” she said. “This was never just a blank check.”

Some fear, however, that the prioritization process could go awry as political interests dig in. “I’m fearful that somewhere down the road, these projects will be decided upon political connections and favoritism,” said State Rep. David Simpson, R-Longview, as the House debated Senate Joint Resolution 1, which puts the water fund to the voters.

Josiah Neeley, a policy analyst with the Texas Public Policy Foundation, a conservative think tank, guessed that it could be “a year or more” before the water funds started distributing loans.

Another looming issue for water is the November referendum that creates the funds to administer the water dollars.

Fraser noted that many interest groups, from the Farm Bureau to the Realtors, backed the new water spending. “We’re going to have an army of people promoting this issue,” he said, adding: “Since I’ve been in the Legislature, I’ve never had an issue that has had this much positive approval. … If I go to the grocery store in Marble Falls, that’s all people want to talk about.”

Said Neeley: “It’s going to be this kind of a weird referendum in that the voters are going to decide whether or not to do something that’s going to happen anyway.” House Bill 4 also creates a new water fund, he said, so the real purpose of the referendum is to allow the transfer of $2 billion from the Rainy Day Fund into the water fund without triggering the state’s spending cap.

Asked whether the Tea Party was likely to get involved in the referendum, Neeley said, “It’s quite possible.” That’s because in addition to water, it involves issues related to the constitutional spending limit and the Rainy Day Fund in addition to water, he said.

And two years from now, what will Texas lawmakers think of the great water session of 2013, with its $2 billion spending and creation of special new funds? Much depends, Neeley noted, on the state’s revenue situation — how the Rainy Day Fund is doing, for example — and also on the weather.