DOWN THE DRAIN ARE WE HAVING A CRISIS YET?

Dewitt Weddle works 266 acres of cotton southeast of Phoenix in Eloy, just three-quarters of a mile from the plot his father and grandfather farmed before him. My dad went broke in 1959," he says with a drawl as hard and dry as the soil he tills. Ran out of water." The Pinal County farmer never took that as an omen, because the Central Arizona Project was supposed to solve his water problems.

I was the first one in this district to take CAP water," he continues. I wanted to take it and not pump wells. That's what I heard all my life; my dad and grandpa said, `Get Colorado River water in here and stop pumping the well.'"

Twenty-four years after the legislation that created it, the Central Arizona Project now pumps river water through more than 300 miles of canals and up 1,200 vertical feet from Lake Havasu to Tucson. According to Tom Clark, general manager of the Central Arizona Water Conservation District, the entity that manages the project, the cost of delivering it is about $60 per acre foot-that is, for enough water to cover an acre of land to a depth of one foot.

Dewitt Weddle pays $48 per acre foot for his CAP water, so it doesn't take an accountant to figure out that someone, besides Weddle, is losing money. He still can't pay the price. Maybe we are all wrong," he muses, and I hate to admit it. Maybe we shouldn't be farming here. It is the desert. But we got acres and acres of water going down the river. Why not use it?"

There is debate about whether Weddle's-or any farmer's-personal business crisis presages a bigger crisis. The rampant fear is that if Arizona doesn't use the Colorado River water, it will flow on down to California and be lost for generations. A variant of that paranoia says that if agriculture sinks, it will create a vortex strong enough to drag Arizona's water futures down the drain, too; that if water demand drops because no one is farming, then the six other states that share the Colorado River will be entitled to part of Arizona's allocation.

Since January, a governor's task force has been evaluating the debate. One of the first proposed solutions comes from a Phoenix water attorney who thinks an increase in property taxes will keep the ditch from running dry. The hands that control the spigot think he's all wet.

Attorney Michael Brophy has started buttonholing legislators, chambers of commerce, the task force and anyone who will listen" to discuss his plan to subsidize CAP agricultural water. Brophy's concern is that failure of agriculture could bring on financial difficulty for the project overall.

As CAP is now structured, the State of Arizona must come up with $42 million a year to pay off the project's $2 billion price tag, money that is supposed to come mostly from an existing property tax of 10 cents per $100 of assessed valuation, sales of excess hydroelectric power associated with the project, water sales to agriculture, cities and industries, and payments on more than $200 million in bonds.

Brophy points out that if the farmers go out of business, they will not be paying their share of water-use fees or bond payments, which would put added financial strain on CAP as a whole. Documents from the Arizona Department of Water Resources show that at least three irrigation districts are delinquent in loan payments. Weddle alone knows of 37 farmers in his area who have quit in the last three years.

So Brophy is proposing a property tax of 15 to 28 cents per $100 of assessed valuation to subsidize water payments for the farmers, giving them a better chance of staying in business. Assessed valuation equals about 10 percent of a house's market value. In other words, assuming the maximum increase, the tax would add another $28 in property tax to a house worth $100,000. It would not be a free ride for farmers in Pinal County, where the problem is most severe, Brophy contends, but rather a charge against water those farm communities might want to use for future municipal or industrial development.

As might be expected, however, Brophy's plan does not sit well. It's a piece of garbage," says CAP's Tom Clark, and it's based on some unproven assumptions. CAP is not in a financial crisis."

All this is a rationale to create a bailout for agriculture, pure and simple," says Roger Manning, executive director of the Arizona Municipal Water Users Association, the lobbying group for the state's major cities. What they're asking is, `Let us continue to do business as we have historically, as inefficient as it is, using the same practices that got us into this financial difficulty. Don't make us restructure, don't make us use any of our other assets, give us tax dollars so we can operate as we always have.'"

Manning is preparing a counterproposal that farmers put up for sale the cheap hydroelectricity they get by law. If they go under, they should be treated as any other failed business people, with their assets put on the table. I don't think agricultural districts going bankrupt is going to make agriculture disappear," he says. I think they're going to be forced to restructure." Furthermore, he contends, even if all farmers defaulted on their bond obligations, agriculture's share of the $2 billion CAP debt still amounts to only about $60 million.

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