The state’s money problems are taking a $200 million bite out of funding for drinking and wastewater projects.
The state Water Resources Control Board voted Tuesday to approve the cuts as part of a statewide belt tightening effort.
The state was flush with surplus cash back in 2021 which led to $1.3 billion allocated to drinking water and wastewater. But this year, revenues fell short and the state is in deficit by about $32 billion.
That means some of the original money allocated in 2021 needs to be scaled back.
The $200 million cut is coming from money that had not yet been committed to any projects, said Joe Karkoski, deputy director of the Division of Financial Assistance at the state Water Board.
“There’s no existing project that’s suffering,” said Karkoski. “This was money that would be available for pending projects. We have a pretty big list of projects in the queue.”
The board voted to cut $150 million from wastewater projects and $50 million from drinking water projects.
The cuts come as concerns over water quality, particularly PFAS, known as forever chemicals, is rising with nearly half of all tap water in the U.S. contaminated, according to a recent study.
The San Joaquin Valley seems to be spared for the time being with the bulk of the wastewater cuts targeting pending projects elsewhere in the state.
The board still has funding to fulfill projects for now, said Karkoski. But board staff may hit a point where they aren’t able to cover entire project costs and can only fund parts of projects, he said.
Board staff will discuss those projects with respective communities and leaders to find options for how to proceed without full funding from the state, he added.
How and where the cuts will take place on the drinking water side is less clear.
“For the drinking water, I can’t really tell you exactly because most of those projects are smaller dollar projects. So a lot of that depends on how quickly we end up going and processing these applications,” said Karkoski. “If we get to the point toward the end of the fiscal year where we’re kind of tapped out with dollars, we’ll have to take a pause until the new fiscal year starts. But I’m not anticipating that at this point.”
Despite the cuts, the board isn’t slowing down on drinking water projects, he said.
The state intends to give the $200 million back to the board next year if the budget allows, said Karkoski. It’s supposed to be a deferment of funds.
“We’re going to have to do some amount of trimming and prioritizing anyway,” said Karkoski. “This just makes it sort of a bigger challenge.”
