Funding fight diverts SJ River restoration

WASHINGTON -- Someone will pay to restore the San Joaquin River below Friant Dam. On that, at least, everyone agrees.

Congress remains stymied, though, on precisely how to account for the ambitious river fix. The dollar amount, the funding sources and even the way it's described incite persistent debate.

Follow the money, and the river's future starts swimming into focus.

As part of a lawsuit settlement, the San Joaquin River's salmon population is supposed to be revived. Environmentalists filed the lawsuit in 1988 over complaints that Friant Dam destroyed the river's historic salmon run.

The environmentalists won. Facing a federal judge, Friant area farmers cut a deal that would reduce their annual irrigation deliveries by an average of 19 percent.

Federal legislation is needed to put the September 2006 lawsuit settlement into practice.

The bill has a $500 million federal price tag. Under budget rules written by House Democrats, lawmakers must offset -- through increased revenues or decreased spending -- about half of that amount.

"After years of historic deficits, this new Congress will commit itself to a higher standard: pay as you go, no deficit spending," House Speaker Nancy Pelosi said Jan. 4.

The first complication is: Where is the offset to cover roughly $170 million of the river restoration work? Lawmakers initially targeted funds collected from oil and gas companies doing business in the Gulf of Mexico. The industry objected. More recently, lawmakers have considered a fund used to decontaminate and decommission nuclear power plants.

The nuclear industry objects.

"Anytime there is a fund out there, people look at it as a target," said Felix Killar, a senior director at the Nuclear Energy Institute.

The second complication is: What does the offset really mean? River restoration bill supporters insist river funds won't actually be taken from the nuclear industry or whatever else is identified for the so-called pay-go offset. They call the offset requirement an inside-the-Beltway bookkeeping maneuver. The real money, they say, will come from Congress, California and Friant farmers.

"It's an accounting thing," said Rep. Jim Costa, D-Fresno. "We're trying to cover an accounting issue."

Costa is chief House author of the San Joaquin River restoration bill. He took over that duty from Rep. George Radanovich, R-Mariposa, who introduced the first bill last December.

Radanovich still supports river restoration. He sharply differs from Costa, though, in contending the pay-go offset amounts to real money.

"They're going to raise taxes on the nuclear industry to pay for the river work," Radanovich said. "It's pretty simple."

Thirty-eight House members, including six Democrats, took a similar stance last week in a letter to congressional leaders voicing "strong concerns about any efforts to raid this (nuclear industry) fund for unrelated programs." They dispute claims that the pay-go offset is merely an accounting flourish.

"Anybody who says that doesn't know what's going on," said Rep. Devin Nunes, a Visalia Republican and staunch critic of the river restoration plan. "They're trying to use propaganda; they're grasping at straws."

The conflict divides lawmakers who often work together.

"Devin is off base on this," Costa said. "The notion that offshore (oil and gas) or nuclear funds will be diverted to the river restoration is inaccurate."

Everyone agrees that literal dollars will not flow from the pay-go offset into river restoration. A utility company, for instance, won't be paying into a San Joaquin River account.

Instead, the House committee that writes a bill must raise revenue or cut programs within its jurisdiction. For instance, the House Natural Resources Committee must offset the San Joaquin River bill with offsets in the energy and natural resource areas.

Viewed one way, only a tangential relationship links the offset and the new spending. The river money is taken from one pot, and the offset money is tagged in a separate pot. Viewed another way, identifying the offset money means it can't be designated for other federal purposes.

Pacific Gas and Electric Co. spokesman Shawn Cooper said designating the nuclear fund as the San Joaquin River offset "would mean that the nuclear industry would be paying" for the river work. He added, though, that "we support the restoration of the river, and we have taken a neutral position on the funding."

The river restoration settlement itself identifies several sources of funding.

Friant farmers currently contribute to a Central Valley-wide environmental program. The settlement dedicates that money to San Joaquin River restoration. Friant farmers currently repay the federal government for dam construction. The settlement likewise dedicates this money to river restoration.

California also has promised $110 million, mostly from a water bond.

Bee Washington Bureau reporter Michael Doyle can be reached at mdoyle@mcclatchydc.com or 202-383-0006.