Mike Dunbar

Economics of state’s water grab don’t add up


Les Grober, deputy director of the State Water Resources Control Board, said his agency had done “more than was required” in studying the impacts of the state’s water grab on our rivers. But what became clear during a daylong public session in Modesto was that his agency hasn’t done as much as it should have.

Rod Smith, who earned his doctorate in economics at the University of Chicago, had some pointed questions for the bevy of state officials who attended Friday. He started by asking about the state’s assumptions on volatility and reliability.

Grober said he didn’t understand the question. We think it was the most important question asked.

Grober and the state insist the demands contained in the 3,100 pages of their revised Substitute Environmental Document are about saving salmon. Hardly anyone here believes that. With our planet warming, the rivers are likely to become too warm to support salmon. Plus, all the salmon currently spawning on the Merced, Tuolumne and Stanislaus rivers come from hatcheries – meaning the genetically distinct salmon the state’s trying to save are already extinct.

Why is the term “reliability” important? Because it’s the word Gov. Jerry Brown uses when promising to save the Delta and simultaneously make water deliveries to Los Angeles and south Valley farmers more “reliable” through his twin tunnels. The only way to do that is by sending more of our water into the Delta. Under the state’s current thinking, making something more reliable there will make it less reliable here.

But that reliability is no less important to us. Without reliable water, farmers are stuck raising lower-value annual crops. Without reliable harvests, people working in food processing plants and wineries might not have their jobs. Will city wells be reliable when nearby farmers are forced to pump twice as much groundwater – an outcome the state says it anticipates – just to keep from going bankrupt? And who will pay to make those city wells deeper when they fail? No worry, says the state, cities can always buy water from farmers.

But if farmers are selling water to cities, they’re not growing crops – and that means thousands will go without jobs.

Mark Hendrickson, Merced County’s director of development, was incredulous the state hadn’t considered volatility or reliability.

“Volatility is absolutely going to discourage companies trying to grow here, or companies we’re trying to attract to the region,” said Hendrickson. “The San Joaquin Valley economic recovery is much slower than other regions around the state; what comfort can you provide? What would you encourage us to tell those who might want to come here?”

That, said Grober, was a policy question for those sitting on the water board.

Such questions might be answered in a serious impact study. But not this one.

Instead, the state’s “answers” only raised more questions. The state’s models say the economic impact of losing 300,000 or 350,000 acre-feet of water will range from $64 million to $124 million. The state figures that means fallowing 23,000 acres, costing 433 jobs.

That left Stanislaus Agricultural Commissioner Milton O’Haire shaking his head: “Wow, not even close.”

He says every 10 acres of ag land produces one job. So using the state’s best-year numbers, the county would be out 2,300 jobs; in the driest years it would lose 12,000.

Think that will hurt a region already suffering from the state’s highest unemployment numbers? Dave White, CEO of Opportunity Stanislaus, does.

“Stanislaus is No. 1 in food production in the entire state,” said White. “And water is the lifeblood of that. You turn off the lifeblood and you turn off our economy.”

Meanwhile, Smith and his associate Jason Bass understand the models the state used – and their limitations.

“Did you consider the downstream effects” of farmers not planting lower-value crops like hay and corn? asked Bass.

“(The model) is not designed to look at forward linkages,” said state economist Tom Wegge. “We worked with the info we had.”

The state had inadequate info because it never talked to the five irrigation districts or the county or the cities or to White or Hendrickson.

Two days earlier, Grober et al. appeared before the San Joaquin County Board of Supervisors, who released a statement Friday pointing out their belief this is just another step in the state’s twin tunnels plan.

In Modesto, Friday’s meeting was for county and state staff, but open to the public. The more critical meetings will be in December in Modesto, Merced and Manteca.

Gov. Jerry Brown has insisted his state agencies should reach voluntary agreements with those of us most affected by this drastic change in water policy.

While we think the state’s water demands are unreasonable, we cautiously support that approach. But it won’t work unless the state understands the impact its demands will have – impacts we fear will be utterly devastating.

If the state can’t even do that much, how can anyone embrace an agreement that might create a better habitat for fish without harming all the humans who live nearby?