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Show Reimbursement Chapter 5 REIMBURSEMENT IS CONCERNED with "Who pays?" and "How much?" This is always a controversial issue and particularly so in com- plex public undertakings such as multiple-purpose water resources developments, where many di- verse and frequently conflicting interests are involved. It is also a crucial issue because it in- fluences significantly the scope and character of such developments and the incidence of their costs. The extreme positions in this controversy will first be noted. Those who seek to promote the rapid and complete development of water re- sources and those who despair of any practicable plan for the collection of primary benefits tend to favor minimum reimbursement from bene- ficiaries-approaching zero in some instances. With the exception of clearly vendible products, they would cover the entire cost from the general revenues of the Federal Government. The burden then would fall on Federal taxpayers rather than on individual beneficiaries. Its pro- ponents justify this policy on grounds of practical expediency in collection, the nature and diffusion of benefits, and the over-all promotional effect. Those who for various reasons would restrict water resources development or who would predicate all public investment on private eco- nomic calculations, thus avoiding the hazards of political decisions, tend to favor complete reim- bursement by beneficiaries, or self-liquidation; that is, no investment of capital would be made without a firm commitment by beneficiaries to repay both principal and interest. Such a policy would apply to public investment a standard practice of the private capital market. Its pro- ponents justify it on several grounds, such as recapture of private benefits, prevention of un- sound projects, limitation of governmental eco- nomic activity, reduction of tax burdens, and adherence to sound financial principles. The Commission has examined both of these extreme views and found them wanting. Each contains a modicum of truth and each has the virtue of simplicity. But they are oversimplified and somewhat doctrinaire; both omit from con- sideration factors of compelling social and eco- nomic significance; hence, neither taken alone is realistic nor calculated to promote the general welfare most effectively. The Commission has tried to avoid such simple solutions. Recognizing the complexities and difficulties involved, it has sought to combine valid elements from these op- posing theories in a workable reimbursement plan for multiple-purpose development. Public and Private Interests Intermingle Much of the controversy over reimbursement, like that over strict application of benefit-cost evaluation, stems from a disposition to apply to public undertakings, ideas and practices appro- priate to the private capital market. Where re- sources are privately controlled, and investment decisions are made by private individuals on the basis of self-interest, full reimbursement, or self- 67 |