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Evaluating Approaches for Financing State Parks

Jan 30, 2013

Evaluating Approaches for Financing State Parks
RFF Feature
January 30, 2013

                                                                                    Photo courtesy of Margaret Walls

The United States’ 14 million acres of state park lands provide enormous social and economic benefits, but state park systems nationwide are hurting. General fund revenues for state parks have declined since the 1990s, and the recent recession exacerbated an already difficult funding situation in many states.

In a new RFF report, Paying for State Parks: Evaluating Alternative Approaches for the 21st CenturyRFF Research Director and Thomas J. Klutznick Senior Fellow Margaret Walls analyzes a variety of methods, highlighted below, used to finance the operation of state parks. Overall, she finds that due to the diversity of park systems across the 50 states and variation in the degree of severity of their funding problems, no single approach can be recommended. She nonetheless provides several rules of thumb:  

  • User fees: State park systems need to be wary of an overreliance on user fees, but to the extent that fees are used, the revenues should remain within the state park system rather than returned to the state’s general fund;

  • Privatization: Contracting with private firms to operate parks is not necessarily a “selling off” of parks, but neither is it the answer to state park funding woes. State park agencies need to carefully weigh the full cost of the contract approach—which includes the government’s cost of writing and enforcing the contract—with that of public provision;

  • Dedicated public funds: There has been a recent move toward dedicated public funding systems that rely on lottery revenues, sales taxes, real estate fees, vehicle registration fees, and other sources. States that adopt these “earmarked” taxes should strive for a broad base and one that can provide a sustainable funding stream.

  • Voluntary private contributions: Following the lead of many major cities such as New York, states may want to consider increasing their efforts in attracting philanthropic gifts, but a careful study is required in order to achieve success. State park endowment funds may hold particular promise.

Walls finds that state park problems often go beyond money. Some park systems have not kept up with changing demographics and preferences, and management structures in some systems seem to stifle creativity and innovation. Improving the financial viability of state park systems should be considered in the context of wider-ranging reforms.