Prepared at the request of Mississippi legislative leaders, this report provided additional information on the costs and benefits of the Tennessee-Tombigbee Waterway project.
The Army Corps of Engineers omitted pertinent facts when assessing the benefit-cost ratio. First, government spending for salaries and wages represented a benefit. The Corps of Engineers’ computations expressed this as a reduction in unemployment compensation rather than as a positive payroll expenditure. Second, “sunk costs” were not considered. The federal government had spend $274 million, and nonfederal subdivisions had spent $12.2 million on this project. Other benefits included (1) the waterway was extremely important as a means of transporting coal; (2) the waterway was a permanent type of project with a useful life expectancy of fifty years; and (3) the waterway will serve interstate commerce rather than isolated economic segments and single states.
In light of this report, the PEER Committee’s opinion was that the Army Corps of Engineers substantially underestimated economic and other benefits in relation to cost.
For a paper copy of this report, contact PEER by telephone at 601-359-1226 or by e-mail at reports@peer.ms.gov.