The effects of recent energy price increases, domestic inflation rates, financial market fluctuations, and changing public attitudes toward federally sponsored water resource development and management have brought economic and financial consideratiosn to the forefront of Western water management issues. Recently enacted federal policies place increased responsibility on the states and localities for the development and management of their water resources. A response common to many of the western states has been to stengthen traditional, and often small, water financing and development programs. In creating and sustaining such a posture, however, state governments must address the important questions pertaining to the economic and financial impact of greater state involvement, the distributional impacts of state taxing and lending programs, and the state social goals relating to such managerial involvement. The traditional and recently expanded water development programs of the State of Utah have been reviewed in the light of such management issues. The demand for state financing of water projects was addressed through an examination of economic indicators and an inventory of potential projects. State options for obtaining capital financing also were examined. This review indicates taht increased financing activity and the potential for increased concentration of water development project benefits to specific social groups have created a need for greater clarity in the legislative mandate and greater accounting and visibility of water project impacts through the use of improved economic and social evalution procedures. Moreover, in the absence of such safeguards, the continued investment of state funds might be considered premature and not always in the best interest of the state\u27s residents
