Many state park systems are struggling. And in some states, the legislature is making matters worse. It is time to rethink the approach to financing parks and work toward a more sustainable and efficient long-term funding system.
The Kansas City Star recently reported that the Kansas state legislature is proposing to rob Peter to pay Paul—or more accurately, rob the state park system to pay for other state services and programs. The state cut personal income tax rates last year, eliminated taxes on small businesses, and made other changes that drastically reduced revenues—by $800 million per year, or 12.8% of state revenues, by some estimates. As a result, it is now searching for money anywhere it can find it.
One proposal on the table is to take from the state parks department—specifically, take money from a fund whose revenues come from fees paid in the parks, mostly cabin rental fees. To add to the park agency’s budget woes, earlier this year the legislature cut funding that the parks received from state lottery revenues and from the state Department of Transportation. In total, the agency’s budget may drop by 18% in one year.
The state parks agency feels especially aggrieved by the recent move as it has been raising fees and cutting costs to become more self-sufficient over the past year. It is not alone in this regard. Over the past few years, as general fund revenues have declined significantly, many states have increased fees in their state parks. Since the federal government passed the Federal Lands Recreation Enhancement Act (FLREA) in 2004, many federal recreation sites have also charged fees. The FLREA is up for reauthorization in 2014 and many feel that one provision in that law is key to its success: fee revenues collected at a site stay with the site and are used for capital improvement projects, maintenance, park programs, and other activities that benefit visitors.
The enterprise fund model that local governments often use for some of the services they provide works similarly. Accounting and financial reporting under an enterprise fund occurs separately from that of general revenue funds and by law, the money may only be used on expenditures of the fund; it may not be used to support ongoing municipal operations or to cross-subsidize the general fund. In the case of parks, revenues earned in the parks would stay in the parks.
Almost no state park systems use the enterprise fund approach (New Hampshire is a notable exception). The Little Hoover Commission, an independent state oversight agency in California, just released a long-awaited study on California state parks and one of its main recommendations is a move toward an enterprise fund model. The Commission also recommends California look hard at the number of parks it operates and think about turning some over to local and regional park authorities.
In my recent report on state park funding options, I suggested that enterprise funds be given serious attention. For one thing, they would prevent the problem that occurred in Kansas (and in Arizona in 2011 and several other states). But I also warned that states need to be careful not to over-rely on user fees to fund their parks. For one thing, no state has successfully operated a fully self-financed state park system; some public funding is needed. Furthermore, charging a price rations use and in some cases this is inefficient. If there is no congestion and use of the park is “nonrival”—i.e., one person’s use does not take away the amount left for others to enjoy—then charging an entrance fee inefficiently limits use of the park. Fees are appropriate for many services—camping, lodging, equipment rentals, and the like – but not everything.
What’s more, many state parks are badly in need of repairs and upgrades. Charging higher fees in such a setting could backfire. In Washington state for example, funding for state parks has plummeted, and the state turned to fees as a revenue source. As Lynda Mapes of the Seattle Times reports,
"The Legislature launched the Discover Pass in 2011, charging visitors $30 a year to use state park facilities.
It was a radical step: No park system in the country is so heavily supported by user fees, and the Discover Pass generated only about half the hoped-for revenue. The cutting got deeper.
'It’s sad,' said Tom Pew, who takes care of a swath of parks from Nisqually to Eatonville to outside Chehalis... 'We are just getting by with keeping the campgrounds and the restrooms clean. The heavy emphasis on the collection of the fees, that takes staff time too,' Pew said. 'We have less contact with the public, and the contact we do have is in more of a negative manner.'"