Ruling Muddies Waters on Clean Water Act

The California Supreme Court recently decided a case that could have profound consequences for the state’s efforts to protect water quality. The case reveals the challenges California faces in keeping polluted runoff out of waterways and coasts.

The court ruled that the state must reimburse Los Angeles and 83 other Southern California cities for certain costs of complying with a stormwater permit issued by the Los Angeles Regional Water Quality Control Board. Stormwater permits are part of the regulatory system created by the federal Clean Water Act and its California counterpart, the Porter-Cologne Act, to protect water quality. These laws regulate discharges of pollutants into the state’s rivers, bays, and estuaries, as well as the Pacific Ocean.

In this case, the permit directed the local governments to comply with a variety of conditions to clean up their stormwater discharges. The governments objected to two of them. The first required inspections of some commercial and industrial facilities and construction sites, as contaminated runoff from these areas can impair water quality. The second ordered the governments to install trash receptacles at transit stops to minimize trash washing into storm drains.

At issue is who should pay for implementing the programs. Constitutional reforms enacted by California voters in 1978 (Proposition 13) and 1996 (Proposition 218) place significant constraints on the ability of local governments to levy taxes and fees. Stormwater programs are particularly difficult to fund. New fees typically require a two-thirds vote of local residents. This can be an especially tough sell for stormwater improvements, because the reductions in pollution mostly benefit communities downstream. Because stormwater compliance lacks a steady funding source, it is one of California’s “fiscal orphans,” with an annual funding gap of $500–800 million.

In recognition of the constraints on local public finances introduced by Proposition 13, the voters amended the California Constitution in 1979 to compel the state to reimburse local governments for the costs of complying with new programs or higher levels of service required by state statute or regulation. The law makes an exception for programs or services mandated by federal law.

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