LETTERS: PROPOSED LAKE BENEFITS WERE OVERSTATE IN STUDY

To the editor:

Five years ago the Cape Girardeau-Bollinger Counties Landowners Association asked me to examine the "Feasibility Report on Proposed Recreational Reservoir" prepared by a Texas engineering firm. The report, which has been used to claim $1.2 billion in one-time housing and land sales and $200 million in annual extra tax revenue, had several flaws.

First was the assumption of a 1.5 percent population growth rate, half of which would be attributable to the lake. Recent figures show Cape Girardeau and Bollinger counties growing around 1.25 percent per year in the 1990s. Since the population continued to grow, it is necessary to compare the estimated population growth rates with and without the lake. This was not done. As a result, the extra income attributable to the net in-migration was overstated. If the population did grow by 1.5 percent with the lake, then only 0.25 percent population growth would be attributable to the lake, not the 0.75 percent (one-half of 1.5 percent) growth rate originally estimated. Therefore, divide the proposed benefits by three.

Second, the feasibility report assumed that the lake would generate around 2 million visitors, the average for Corps of Engineers lakes in Missouri and Arkansas. Since the average acreage of corps lakes in Missouri is 15,000 acres (this includes Wappapello, Table Rock, Mark Twain, Pomme de Terre, Truman, Stockton and the Missouri portions of Bull Shoals and Norfolk lakes) while the proposed Cape Girardeau-Bollinger lake is only 7,680 acres, the 2 million visitors is an overestimate. Since the lake would be only half the size of other corps lakes, it would seem appropriate to divide the remaining benefits by two.

Third, a multiplier of 1.5 was used to generate the total direct and indirect benefits of the lake. In a full-employment economy such as Cape Girardeau County, the most likely multiplier is zero. A zero multiplier does not mean that the lake has no value. It just means that a dollar spent on a lake is a dollar that cannot be spent on something else, like education or casino gambling. If we value the lake more than these other things, then by all means it should be built. But claims of $1.2 billion in new housing and land sales and $200 million in additional tax revenue should be discounted to somewhere around zero to one-sixth the original estimate.

Water projects in the United States have had a long, sordid history. Marc Reisner's book, "Cadillac Desert," provides a good chronicle of the misadventures of the Corps of Engineers and Bureau of Land Management in managing lake projects. Remember, if it sounds too good to be true, it probably is.

BILL WEBER, Professor

Economics Department

Southeast Missouri State University

Cape Girardeau