The Willamette River Case: Gains 263 



but suggestive estimates, we can comment on the regional income 

 redistribution inherent in the several alternative approaches. 



Under federal development, approximately 70 per cent of the 

 cost of hydroelectric development and the shifted tax burden of 

 supporting public services would be borne by the residents of the 

 Pacific Coast region. Of this total, power consumers would directly 

 meet 94 per cent through the rates which they paid for power; 

 residents of the region would contribute the remainder through 

 increased federal tax liabilities. On the other side of the ledger, 

 about 55 per cent of the difference in the annual operating costs 

 between federal and private development would appear ultimately 

 as gains to households in the region; the remainder would accrue 

 ultimately to households in other regions of the nation. On bal- 

 ance, after all shifts in federal and local tax burdens are accounted 

 for, the residents of the region in which federal hydroelectric devel- 

 opment takes place would enjoy a net income gain; residents in 

 other regions of the nation would suffer some net income loss. This 

 suggests a net income transfer from other regions to the one in 

 which the project is undertaken. 



Moreover, to the extent that federally developed power would 

 provide a more abundant supply of energy at lower rates than 

 would have been provided in its absence, mobile resources would 

 be attracted into the region and contribute to a more rapid rate 

 of growth. The income redistributive consequence of this and 

 similar dynamic phenomena, however, defy our analytic techniques. 

 Since we can only speculate as to the ultimate dynamic conse- 

 quences, we simply note this facet of the problem in passing. 



Under local public development, in the absence of a scale of 

 development which would provide energy for electric-process indus- 

 tries, the income redistribution in favor of the locality would 

 appear to be somewhat greater. Most gains from lower annual 

 operating costs as compared with private development would accrue 

 to residents of the region. In our illustration, after allowance is 

 made for increases in federal tax liabilities on regional residents, 

 and an assumed increase in local tax levies on sources other than 

 power, approximately a half million dollars annually would appear 

 as a regional net gain. On the other side of the coin, the relatively 

 lower extraregional gains would fall short of compensating for the 

 shifted federal tax liabilities onto households in other regions of 



