This story was an exclusive first report that appeared in the
Delaware Coast Press in March 1998.Study shows value of beaches warrants replenishment.
By Terry Plowman
Coast Press Editor
A long-awaited study of the economic effects of beach replenishment in Delaware says that the state would lose $30.2 million in tourist revenues over five years if it did no replenishment during that time.
The value of property would drop by $43.3 million, 268,000 visitors would vacation elsewhere and local parking revenues would fall by about $300,000, according to the study.
In addition, the state would lose about $2 million in tax revenues, which coincidentally is about how much it spends each year on beach replenishment.
How these statistics will play out in the political arena is as yet unclear, as legislators and other officials on the state Beach Nourishment Task Force have not formally discussed them. The report, which has been two years in the making, is to be officially released at an as-yet-unscheduled meeting of the task force.
Is replenishment justified?
Although Mike Lawrence, a consultant who worked on the study, said it offers no conclusions, he noted that it would be "pretty easy to justify protecting the beaches" based on the statistics.
Lawrence, vice president of Jack Faucett Associates of Bethesda, Md., said the data shows that "the value of the beaches far outweighs the cost of replenishing them."
John Hughes, director of the Division of Soil and Water Conservation, declined to comment on the report, saying, "It has been my intention all along to give it to the committee first."
Committee member Tony Pratt, of the state Shoreline and Waterway Management Section, also declined to comment on the reportís findings, but he noted that the report doesn't address the political question of who should pay for beach nourishment. "Its purpose is to give reasonable data on the economic benefits of the beaches," Pratt said.
Who should pay?
For legislators in Dover and Washington, D.C., who continue to wrestle with the question of who should pay for beach replenishment, the economic impact study offers some valuable information.
It shows that the benefits of replenishment to Delaware residents is relatively small in the five-years-without-replenishment scenario: "Most of the benefits of shoreline nourishment accrue to those outside of Delaware because most of the visitors and property owners reside in other states," the report says.
But the report also hints that millions of dollars in revenue could be tapped from what it calls "consumerís surplus."
According to Lawrence, consumers surplus is the difference between how much consumers actually pay for something and how much they are willing to pay. "(In terms of money for beach preservation), the question we ask is would consumers be willing to pay more than they are paying now," Lawrence said.
The report estimates an annual consumers surplus of almost $382 million -- which could be seen as potential untapped revenue for beach replenishment. Lawrence said, "There ought to be ways to generate funds (from the consumers surplus)," but he didnít suggest what they might be.
Bill Winkler, of Ocean View, a vocal critic of beach replenishment, has said that the economic study could lead to a taxation system based on who benefits from replenishment. Although legislators have avoided that topic, the report says that the cost of replenishment should be allocated according to its benefits. "To aid the state in cost allocation decisions, the geographic distribution of those impacted by nourishment, including visitors, property owners, business owners and employees is considered," the report says.
The report also appears to refute the contention that beach replenishment mainly protects oceanfront homes owned by affluent property owners -- a contention long criticized by tourism industry officials. "That couldn't be further from the truth," Lawrence said.