Voters approved Proposition 6, but it must guard against potential conflicts of interest

Texas voters overwhelmingly approved the creation of a permanent source of funding for water infrastructure projects and a $2 billion initial investment in that fund Tuesday. State political leaders like Gov. Rick Perry hailed the vote as a major victory: In a statement after the vote, Perry said that the people of Texas had “made history, ensuring we’ll have the water we need to grow and thrive for the next five decades, without raising taxes.” 

But while we’re just as pleased that Proposition 6 passed, it doesn’t solve the problem of water scarcity in one stroke. To put it in baseball terms, Texas didn’t win the World Series or even an important regular season game. We just started the first inning on Opening Day.

The state constitutional amendment was simply a decision to spend billions of dollars on water management. It said nothing about what specific projects would receive funding. In the years to come, the decision of which projects to finance will be one of the most contentious and long-running issues in state history. With that in mind, this is the first in a series of editorials outlining our concerns and predictions for how this issue will develop in the future.

One major potential problem with the newly created State Water Implementation Fund is that almost all of the power over it rests with one agency, the Texas Water Development Board. The TWDB was created by the Texas Legislature in 1957, but until now it has only been able to recommend water management strategies to the state government. After the passage of Prop. 6, however, the agency has the authority to implement as much of its most recent State Water Plan as it can with $2 billion. The 2012 Plan calls for more than $50 billion in water management spending over the next 50 years, so the TWDB will have plenty of work to do for decades.

During the last legislative session, the state legislature drastically overhauled the agency, replacing the previous board with three highly paid, full-time members appointed by Perry. The lawmakers who planned the restructuring, including Sen. Troy Fraser, R-Horseshoe Bay, the Natural Resources Committee chairman, did so in the hopes that the new board would be more “proactive” and plan a more coordinated series of water projects across the state. That’s a valid concern, but we worry that the restructuring of the TWDB — and the $2 billion check voters just handed them — will place an inordinate amount of power in the hands of three Perry appointees. Through the board, the governor’s office will have almost complete control over which groups get the money and which ones don’t.

This will still be an issue long after Perry leaves the governor’s mansion in 2015, but it’s of particular concern for as long as he remains in office, because his administration has developed a bit of a reputation for preferential kickbacks to supporters in the form of government financing.

For example, in 2005 the legislature enacted the Texas Emerging Technology Fund, which Perry championed as a major success story of his pro-business economic policy. Much of the money has helped tech startups get off the ground, and the fund has also invested more than $160 million in Texas universities. But in 2010, The Dallas Morning News reviewed the fund’s recipients and found that more than $16 million had been invested in companies tied to Perry’s major campaign donors. One of the companies, Convergen LifeSciences, Inc., which was founded by a Perry donor, was initially rejected for funding by a regional board before it appealed to a statewide advisory committee made up entirely of Perry appointees. Within eight days, the company’s application was unanimously approved for one of the fund’s largest grants to date. Perry’s office claimed all the companies were fully vetted, but the state auditor disagreed, calling for greater transparency and accountability in the fund’s management in 2011.

Many government investment programs raise conflict-of-interest questions like this, but with billions — instead of millions — of dollars being spent, the SWIFT needs a greater measure of protection against such impropriety than currently exists, and that means more degrees of separation between those deciding who gets the money and those running for statewide reelection.