Research & Commentary: Private Management of Public Parks
America’s public parks are struggling financially and have become an expensive enterprise for governments to operate. Even state parks that charge entry fees are able to collect only about half the cost of operation, with the rest coming from state general funds.
Approximately 80 percent of a public park’s expenses are labor costs. As public funding for parks gets squeezed, the park’s maintenance suffers, and so does the visitor experience. With expenses for services such as health care and education rising rapidly, further crowding out of funding for state parks is inevitable.
Privatization of nonessential government services, including public parks, has become more prevalent as states struggle to balance their budgets. Opponents argue turning public parks over to private owners will cause price increases, overdevelopment, and commercialization, such as having a McDonald’s or company logos in parks, spoiling the experience of nature.
Groups such as the Property and Environment Research Center (PERC) and Reason Foundation have proposed partial privatization of public parks through public-private partnerships (PPP). Such partnerships work by leasing individual operational duties such as maintenance, campground, trails, and infrastructure to concessionaires under a contract agreement, while the park remains publicly owned. The leases’ restrictions prevent the land from being overdeveloped, and the profit incentive for private concessionaires keeps prices from rising too high. The government also collects concession fees from the private park operators, which turns the parks into money-generators for the state.
Parks such as Arizona's Crescent Moon Ranch have been able to do just that, adding $60,000 to the local Forest Service recreation budget without requiring any tax money to operate.
Over the past five years, dozens of public parks have been closed down, and several more have been threatened with closure, due to increasing operating costs at a time of state budget deficits. PPPs are a practical solution to keep public parks open, restore them to fiscal sustainability, and improve the visitor’s experience.
The following documents provide additional information about private management of public parks.
Ten Principles of Privatization
The seventh installment in The Heartland Institute’s Legislative Principles series addresses state and local privatization, noting, “In recent decades, privatization has gone from a concept viewed as radical and ideologically based to a popular and well-proven public management tool.”
A Tale of Two Parks
Warren Meyer, president of Recreation Resource Management, presents a case study published in September 2013 analyzing two nearly identical state parks near Sedona, Arizona. One of the parks recently announced it would have to close because of budget shortfalls, whereas the other park is able to sustain itself and has added more than $60,000 to the local Forest Service recreation budget. Meyer concludes issuing leases to private entities to operate individual facilities can save taxpayers money, bring better customer service, and keep public parks open without fear of overdevelopment.
Take State Parks off the State’s Books
Writing for the Reason Foundation in April 2010, Leonard Gilroy, director of government reform at Reason Foundation, explains how cash-strapped states can use park concessions as win-win budget alternative to budget cuts, park closures, and tax hikes. Gilroy describes such a model already proposed in Arizona and many other states and already operating “in the ‘crown jewels’ of the national parks, including the Grand Canyon, Yosemite and Yellowstone.”
Taking State Parks off the State’s Books, Part 2
Writing in June 2010, Leonard Gilroy presents a sequel to his earlier column addressing how park concessions can lower operating costs and generate revenue for state budgets. Gilroy refutes four of the most prominent myths purveyed by opponents of private operation of public parks.
Save Our Parks! How to Keep National Parks Open During a Government Shutdown
In this video from the Learn Liberty series at the Institute for Humane Studies, Montana State University economics professor Holly Fretwell explains how to save public parks and protect them from political gamesmanship. Fretwell suggests parks remain publicly owned but the maintenance, campground, trails, and infrastructure be privately managed by leasing them out to entrepreneurs under strict term leases. This will generate money for the government instead of costing taxpayers money, while protecting the park from overdevelopment.
State Parks Coming Under Greater Budget Scrutiny
Writing for Environment & Climate News in July 2012, Milwaukee-based economist D. Brady Nelson describes what two states, Ohio and California, did with their state parks in the face of budget deficits. California announced it would permanently close 70 of the state’s 278 parks, whereas Ohio approved legislation allowing oil and gas production in state parks. The Cato Institute’s Jerry Taylor and Ludwig von Mises Institute’s Gregory Bresinger are quoted as saying privatization can help the environment while saving taxpayers money.
Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other topics, visit the Environment & Climate News Web site at http://news.heartland.org/energy-and-environment, The Heartland Institute’s Web site at http://www.heartland.org, and PolicyBot, Heartland’s free online research database, at www.policybot.org.
If you have any questions about this issue or The Heartland Institute, contact Heartland Institute Policy Analyst Taylor Smith at email@example.com or 312/377-4000.