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122 Part i california Water a broad public purpose may now be considered taxes, subject to a two-thirds vote of the state legislature (up from a simple majority). Local governing bodies, which could approve these fees without a vote of the general public, would also be required to seek a two-thirds vote of the general public for such fees. Although the text of the new amendment is uncertain in some respects and will certainly be tested in litigation, Proposition 26 is likely to substantially restrict California’s ability to address the current gaps in resources for broad public purposes, including environmental stewardship and water resources planning. Is There Enough Money to Pay for California’s Water System? Restrictions on state and local funding, along with the budget woes of federal and state governments, naturally raise the question of whether California can maintain, let alone enhance, its current water operations and infrastructure. Water managers in all sectors tend to answer with a resounding “no.” But the answer is more nuanced than is commonly believed, reflecting the roles and responsibilities of different levels of government in water system management and differences in funding rules. Utilities Urban water and wastewater utilities, which are responsible for the vast major- ity of spending on water supply and wastewater infrastructure and operations, appear to be in relatively good financial shape. Every four years, these utilities are required to submit estimates of their long-term capital needs to the EPA, which tracks investment needs nationwide. The most recent assessments, from 2007 for water and from 2008 for wastewater, indicate that California’s 20-year spending needs for publicly owned utilities are on the order of $40.7 billion and $24.4 bil- lion (2008 $), respectively, or roughly $2 billion and $1.2 billion per year.55 An additional estimated $3.9 billion over 20 years ($194 million per year) is needed for managing stormwater and nonpoint source pollution, some of which is also handled by wastewater utilities. In 2007, capital spending by these utilities was substantially higher. According to estimates from the State Controller’s Office, publicly owned water utilities invested roughly $3.6 billion and wastewater utilities roughly $2.2 billion (2008 $). (U.S. Census of Governments estimates put total capital outlays for water in 55. U.S. Environmental Protection Agency (2008, 2009). Estimates of both needs and capital outlays reported in the text exclude interest payments.