I stumbled this evening across this 2009 piece by the Public Policy Institute of California which seems quite timely:

The Myth

The popular press often propagates the myth that California is running out of water. As a recent example: “Have you seen Lake Oroville lately? If so, you know California is running out of water” (Speer, 2008). This myth stems from rigid notions that there is no flexibility in water management and that the economy will grind to a halt if shortages occur. It persists despite ample historical evidence and numerous economic and technical studies showing that Californians can adapt successfully (albeit at some cost and inconvenience) to living in an arid region with variable and changing water conditions. By implying that Californians cannot adapt, the “running out of water” myth discourages efforts to manage water resources more efficiently.

How the Myth Drives Debate

The notion that California is running out of water is effective in raising alarm about serious water problems but encourages a simplistic and sometimes counterproductive attitude toward solving them.