| OCR Text |
Show rectly connected with a power development, while other less economical lands can be developed be- cause they have an associated power potential. Reimbursable and Nonreimbursable Outlays The suggestion has already been made that, under a sound reimbursement system, private benefits should be reimbursable and public ben- efits nonreimbursable. The problem is one of how to arrive at a reasonable division between the two. There are at least three possible ap- proaches to a solution. The first, and simplest, would collect from each beneficiary, individuals and local communities alike, an amount corresponding roughly to the value of the service. This would recapture the value accruing to individuals through a system of charges, fees, and assessments. These collec- tions having thus been secured from private bene- ficiaries, the residual, or unreimbursed, portion of the total investment would be treated as a con- tribution to the general welfare to be covered from the Federal revenues. The second would rely on benefit-cost analy- sis and would require each beneficiary to repay, through prices, fees, or assessments, the full cost of providing his benefit. The same procedure would be applied to the determination of public benefits. The third would determine the reimburse- ment responsibility for each function in the pro- gram separately, the separate decisions being based on such considerations as vendibility, assessability, collectibility, ability of beneficiaries to pay, comparable practices for other functions, costs for each function, contribution to national defense, and other social purposes. The first, or value of service, method is simple, and effectively distinguishes between private and public benefits. What private beneficaries can- not pay economically is by definition an invest- ment on axcount of public benefits. It avoids the cumbersome and difficult process of cost analysis a:nd identification of beneficiaries re- quired by the second method, and the undue re- liance on administrative discretion characteristic of the third. It may, however, require modi- fication in situations where a contrary public policy is regarded as more desirable, such as charges for utility services where cost is an ac- cepted standard of rate making, or where charges are reduced to assist some disadvantaged group or region. Vendible Products and Services Multiple-purpose water resource developments yield both vendible and nonvendible products and services. A definite price per unit can read- ily be established and collected for electric power and domestic and industrial water supply. On the other hand, the socially desirable benefits from pollution abatement, fish and wildlife pres- ervation, and sediment and salinity control are not readily priced. Between these two groups are irrigation, flood control, navigation, and rec- reation which, under varying conditions, may be more or less adaptable to a price system. Irrigation presents a special problem. Con- ceivably it might have been practicable for the Federal Government, in connection with irriga- tion developments, to have treated irrigation water service as a vendible service, just like elec- tric power or municipal and industrial water sup- ply, to be sold to irrigation farmers for so much per acre-foot on a full cost basis. But irrigation development in this country has followed a quite different course. We have been concerned with developing the arid and semiarid West, with increasing agricultural production, with estab- lishing independent, family-sized farms, with creating opportunities, with broadening the scope of individual property ownership. In order to achieve these objectives, the Fed- eral Government has invested large sums of in- terest-free public capital in irrigation works, and has made water available to family-sized farms on an ability-to-pay basis under a legal arrange- ment whereby the land and appurtenant water rights would become the property of the indi- vidual farmer on completion of the pay-out |
