By VIRGINIA LEE OWEN
Associate professor of economics at Illinois State University, she specializes in international economics. A native of southern Illinois, she obtained her Ph.D. from the University of Illinois. She is the other of three sons.

Shawnee Hills 'Wilderness Area': Costs and benefits

RECENT PROPOSALS for public land acquisition in Pope County have generated heated controversy. Environmentalist groups have spear-headed a campaign to add to existing conservation areas within the county, while local residents have steadfastly opposed this expansion (see "May consider two tracts in Shawnee Hills for wilderness area' under U.S. bill," January, pp. 20-21). There are many ways to evaluate the often emotional arguments of such partisans in the interest of more rational government spending. The economist's approach is to use cost-benefit analysis.

Getting one's money worth
Cost-benefit analysis is the formalization of the common sense rule that one should not spend more for something than it is worth. The process requires calculating total costs and total benefits and comparing the two. If costs exceed benefits, the project should be abandoned. If benefits exceed costs, the project deserves further consideration. Such consideration does not mean automatic adoption, however, for there may be more projects than the government can finance. Given the intangible nature of both costs and benefits, these calculations may prove formidable. In any case, analyses of this kind should include the direct costs and benefits both to society in general and to specific individuals and businesses. Many of these measures of costs and benefits are estimates about the future. They might be inaccurate. What is the money benefit of assuring our grandchildren that they will see a live specimen of a currently endangered species? What is the money cost of a child's anguish at having to change schools because his neighborhood is included in a government project?

Even if all agree that benefits on a particular project exceed costs, another problem arises. Who pays the costs? Who gets the benefits? There would probably be little public support for a project whose costs would be borne by a tax on everyone and whose benefits went to the town millionaire, no matter how much those benefits exceeded costs. This question of distribution of costs and benefits is often overlooked or ignored in making public policy. The recent proposals involving Pope County illustrate this.

Pope County is located in extreme southeastern Illinois. Approximately 40 per cent of its land area is owned by the federal and state governments. Most of the federal land is in the Shawnee National Forest. The major recreation area operated by the state of Illinois is Dixon Springs State Park, although other acreages held by the Illinois Department of Conservation include approximately 1,500 acres in the Barren Creek area and 125 acres in the Lusk Creek Canyon area. The major private industries in the vicinity are agriculture and mineral extraction. Agriculture is the primary occupation.

The Pope County proposals
In the spring of 1974, two separate proposals for public land acquisition were initiated. Both sought public ownership of acreage surrounding the state's Department of Conservation holdings in Lusk Creek Canyon. The more grandiose of the plans was initiated by the Great Lakes Chapter of the Sierra Club and received congressional support as the Eastern Wilderness Bill. This proposal called for a 15,000 acre "wilderness study area" centered around the Indian Kitchen section of Lusk Creek Canyon. The bulk of this area is already owned by the U.S. Forest Service. The Sierra Club proposed that 3,000 to 4,000 additional acres be purchased from private owners. Under the proposal, the wilderness study area would have been closed to all but foot or horseback traffic. The aim would be to return the area to its natural state.

November 1975/Illinois Issues/343

An alternative proposal was initiated simultaneously through the Illinois conservation agency. According to this plan, 954 acres would have been added to the 125 acres already owned by the state in the same Indian Kitchen section of Lusk Creek Canyon to insure access to its proposed nature preserve in the Indian Kitchen area. Some recreational development in the form of picnic areas was contemplated in addition to the extension of the nature preserve.

Who pays the bill?
The costs of these proposals for public land acquisition fall on three groups: the general taxpayers, the displaced population, and Pope County residents.

The major expense to the American taxpayer is the initial land cost rather than maintenance or development costs. Under the wilderness study area proposal, maintenance costs would be reduced by closing existing access roads. Supervision could no doubt be handled by existing U. S. Forest Service personnel. The only possible development costs are for pine tree planting and thinning. These costs would appear minimal compared to land acquisition costs, however. The recommended average appraisal of Pope County farm property for 1975 is $200 per acre. This figure times the 3,000 to 4,000 acres estimated for purchase gives a cost of $600,000 to $800,000. Spread among all U. S. taxpayers, the individual burden is negligible.

The cost to the Illinois taxpayer under the Department of Conservation proposal is likewise minimal. Only 954 acres are involved and the official state land offer was for $141 per acre. The projected cost is thus $134,514. Even if the price rose to $200 per acre, the cost would be $190,800. Either figure is less than one per cent of the Conservation Department's $30 million budget. State development costs on site are projected as higher than similar costs under the federal proposal. The picnic area and recreation area would involve some expenditure. There is some skepticism as to the ability of the Department of Conservation to carry out these plans for it has yet to make any improvements on its 1,500 acre Barren Creek holding, and has closed one of two entrances to Dixon Springs State Park because it did not have sufficient funds to maintain it. The on-site development would certainly cost only a fraction of the land acquisition cost, and continuing maintenance is projected primarily on the salary of one or possibly two people. Based on the salaries of Dixon Springs State Park workers, this would amount to $6,000 to $8,000 for one employee per year. Costs to the general taxpayer, then, under either the federal or state proposal are so diffused as to be virtually unnoticeable.

Costs to the displaced population are much greater, and to some extent they are nonmonetary. As one local resident put it, "This land has been in our family for generations. We consider it a part of us and we love it dearly." Other costs are monetary. Finding alternative farmland or seeking another kind of employment is not a simple matter. Few acreages are available within Pope County, and moves to other farming areas would result in higher per acre costs. Compare the often quoted figure of $l,000/acre in Central Illinois to the $200/acre Pope County figure. Pope County has a consistently high unemployment rate—over 10 per cent as of January 1975. Nonfarm employment is difficult to find. These costs are minimized in the federal program, for displaced landowners are allowed to lease their former land for their lifetimes.

The less, the less
The cost to Pope County taxpayers is also clear. Pope County is the poorest of Illinois' 102 counties. Its assessed valuation is the lowest and property valuation per capita next to the lowest (by one dollar) in the state. Pope County valuation is only 63 per cent of the next highest county, and all but two counties have assessed values twice as high as the Pope County figure. Pope County's per capita income ranks it next to the bottom—101 out of 102 Illinois counties. The county government deficit last year was $65,000 despite a voted tax rate which ranked it in the upper third of all Illinois counties. Estimated property tax losses in the federal proposal would add over $8,000 more to this deficit. The state proposal would result in a tax loss of over $2,600. These losses do not include those from other taxes which are rebated to the county on the basis of property tax collections, nor do they take into account any increase in tax rates or assessments since 1974.

Arguments pro
Proponents of the projects argue that reduced county expenses would result from the decline in taxable land. In the case of Pope County, these savings are insignificant; county offices and their operating expenses would remain. Educational costs are essentially unchanged; all 859 pupils are now bused to Golconda, the county seat, to attend school. Because of this centralized system, vacating large land areas can't result in closing schools in the vacated area—there aren't any. Nor will the teaching staff be reduced unless the students from displaced families are concentrated in one grade—which they aren't. There is a possible saving resulting from maintaining fewer miles of county roads. Even this is not substantial, for the most elaborate plan from the Sierra Club results in the abandonment of only 4.5 miles of county dirt and gravel roads. Fire protection expense also wouldn't decrease; currently Pope County has no expenditure for fire protection. Rural residents depend upon fire service from neighboring counties or the Forest Service—all of which are on a fee for service basis. The town of Golconda has one fire truck which must remain within the town. It seems obvious that the county cannot reduce its fire protection expenses below the current level of zero.

Thus the costs to the residents of Pope County are severe. Their tax bills will rise. The services of the county will erode further. The decrease in the tax base may jeopardize the functioning of Pope County government in a serious way.

Who gets the benefits?
Benefits from additional conservation lands in Pope County fall into two categories: ecological-botanical and economic.

The unique botanical properties of Lusk Creek have been catalogued by the Illinois Department of conservation and are quoted by conservation proponents. The area contains sandstone cliffs up to 100 feet high covered with mature forests and a variety of unusual plants, including 13 kinds of lichens which are known in Illinois only in Lusk Creek Canyon. Such scenery deserves to be accessible to the public rather than held for private exploitation. The rare botanical specimens likewise deserve protection from an unknowing farmer's plow or lumberman's axe. Although hard to quantify, these are benefits of a conservation effort. These benefits already exist, however, for the Lusk Creek Canyon area so described is already contained in the state's 125 acres known as Indian Kitchen area. The surrounding area is either likewise protected as a part of the Shawnee National Forest or incorporated into producing farms. The only stated benefit of additional state land acquisition is to assure access—not to extend or protect the conservation area. Since the state has closed the former access road, Indian Kitchen can be reached only on foot. If the plans for recreation area development are carried out, the scenery will be more publicly accessible but the specimens will be correspondingly less protected, the benefits related to conservation are not clear-cut.

Only one rationale for broadening Forest Service holdings has been given in connection with the federal proposal for a wilderness study area. This is "that the larger acreages would be more representative of the natural character of southern Illinois." Surely somewhere in the 84,000 acres held by the Forest Service in Pope County, there is an area suitably large enough and representative enough without additional land acquisition. Again the conservation benefits are not clear-cut. However significant these benefits are, they accrue to society as a whole.

Often conservation projects create a local economic boom through in creased tourist business attracted by the facilities. This seems unlikely in Pope County. Consider the recreational facilities currently available there: lake or river fishing and boating; swimming in lake, river or outdoor pool; hiking, camping, picnicking, backpacking trail-riding, nature watching, hunting—and all in federal or state facilities. If tourists have not been attracted by, existing facilities, will more of the same attract them any better? In addition, the types of development proposed do not readily transfer into local business. Birdwatchers and backpackers don't spend money on local motels or restaurants, nor do they support related activities such as excursions or equipment rental. Furthermore, some economic studies indicate that as income rises, these low cost leisure activities are abandoned. People spend money on more expensive leisure activities (skiing, for example) when their income increases. Thus, the present existence of a wide variety of recreational facilities and the likely lack of growth in this kind of recreation combine to make significant economic benefits to Pope County from these endeavors unlikely. In short, it is unreasonable to expect the economic benefits of either the federal or the state proposal to aid Pope County.

The more, the more
The foregoing cost-benefit analysis indicates that further public land acquisition in Pope County will result in excessive economic costs to the people and government of the county. These costs are immediate and highly localized. The benefits, on the other hand, are widely diffused and questionable in monetary value. Virtually none accrue to the local population which bears the burden of the costs. The poorest county is being asked to subsidize recreational and conservation areas for the rest of the wealthier population. Cost-benefit analysis just doesn't support these projects. Only if the residents of Pope County could be compensated for their costs by the rest of society would this problem be overcome.

Such compensation has been proposed often by Legislators as in House Bill HR 1225. "Payments in Lieu of Taxes Act of 1974," tout approved funds have been inadequate and chances of greater funding are' considered slim. Obviously these or other methods of compensation must be funded if proposals for Pope County are to be enacted fairly. 

November/1975/Illinois Issues/345