I stumbled upon the following congressional testimony about how to FIX the National Parks using Free-Market solutions.

This testimony dates from 1997 but it is more relevant today than ever. I'd suggest this is in close harmony with the solutions now being seriously considered by George Bush, Gale Norton, Fran Mainella and others.

You'll discover that recreation user-fees are absolutely central to these discussions.  It's scary what these people were suggesting! These fees are NOT going to be supplemental... not if this is the direction in which we are headed.

Here's what PERC's Don Leal told congress:

 [I think Congress should establish a fixed schedule that gradually reduces annual appropriations for park operations over a 10-year period until it reaches zero like they did in Texas and New Hampshire.]

And here's a warning from Rep Eni Faleomavaega (D-American Samoa) ... a warning no one heeded. A warning that is urgent today.

[The report entitled, ''Back to the Future to Save Our Parks,'' is based on the premise that, to use PERC's own words, popular parks can and should pay their own way. I believe this is a seriously flawed premise. We do not operate our national parks like Walt Disney charging what the market will bear.]

Scott

PS... While fee-demo activists focus their attention upon saving the National Forests from the rampant Disneyfication made possible by fee-demo we have all but ignored the National Parks and the impacts of fee-demo upon them. Perhaps the National Parks have already become sacrificial Industrial Tourism playgrounds and can not be saved at this eleventh hour. But perhaps that is not true and the National Parks can still be rescued. If that's the case, then fee-demo activists (and the conservation and environmental community at large) can no longer afford to ignore the impact this fee program is having upon the National Park System.

PPS... The complete transcript can be read at the link provided.

---begin except---

http://commdocs.house.gov/committees/resources/hii45042.000/hii45042_0.HTM

<snip>

STATEMENT OF HON. JAMES V. HANSEN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF UTAH

Mr. HANSEN. Good morning. The Subcommittee on National Parks and Public Lands will come to order. I have scheduled this hearing as a continuation of this Subcommittee's longstanding interest in the issue of recreational fees on Federal lands, especially in the National Park System.

This issue has been a major concern for the Congress for the past 10 years. And this subcommittee, as well as the Committee on Resources, have worked closely with the Budget Committee and the Appropriations Committee to ensure that the American public has the opportunity to enjoy the federally managed lands by paying fair and reasonable recreation fees.

During 1996, Congress authorized a Recreational Fee Demonstration Program providing the Federal land management agencies far-reaching discretion in creating recreation fee programs during the next 3 years. This Fee Demonstration Program allows the agencies to retain 80 percent of the revenue collected in excess of the amount collected in 1995, with 20 percent returning to the General Treasury.

Currently, language contained in the fiscal year 1998 Interior Appropriations bill would allow the agencies to retain 80 percent of the revenue in the unit collecting the fee, and the remaining 20 percent to the Federal land management agency. This subcommittee will continue to oversight the progress of this Recreation Fee Demonstration Program. And today's hearing will add valuable insight into the future success of National Park Service recreation fee program.

As in many instances, the States are in the forefront of implementing new and creative solutions to old problems. Today, we will hear detailed and interesting testimony concerning how States are addressing the issue of tight fiscal constraints in park budgets by moving from general tax support to user fees to operate and maintain their State parks.

Although I do not believe that the National Park System should ever reach total self-sufficiency in its operation budget, I do believe that there are many comparisons that can be made from the success of the States in operating and maintaining their parks.

I welcome Mr. Don Leal, Senior Associate of the Political Economy Research Center, Bozeman, Montana, who will present findings from his recently published policy paper entitled, ''Back to the Future to Save Our Parks.'' I believe that many of us will be surprised to learn that 16 State park systems currently obtain more than one-half of their operating costs from recreation fees, and that many others are heading in that direction.

Furthermore, I believe that this paper demonstrates that if fees are reasonable and the public is informed that their fees are utilized in the park where collected, there is broad-based support for recreation user fees.

I also welcome Kenneth B. Jones, Deputy Director for Park Stewardship, California Department of Parks and Recreation, who will provide testimony on the tremendously successful transition the State of California park system is undertaking to address budgetary and management issues.

The California park system is unique, consisting of 264 parks covering 1.3 million acres, including 11,000 picnic sites, 17,500 campsites, 280 miles of coastline, and 3,000 miles of trails. With over 70 million visitors enjoying this State system each year, it provides a true benchmark by which to measure our efforts on the Federal level.

I will let both of our distinguished panelists make their presentations so that we have their ideas and concepts on the table, and then I will recognize members for their questions. But prior to that, I recognize my good friend and colleague from American Samoa, the Ranking Member of the subcommittee, Mr. Faleomavaega. The gentleman from American Samoa.

[Statement of Mr. Hansen follows:] STATEMENT OF HON. JAMES V. HANSEN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF UTAH

Good Morning. The Subcommittee on National Parks and Public Lands will come to order.

I have scheduled this hearing as a continuation of this Subcommittee's longstanding interest in the issue of recreational fees on Federal lands, especially in the National Park System. This issue has been a major concern for the Congress for the past 10 years, and this Subcommittee, as well as the Committee on Resources, have worked closely with the Appropriations Committee to insure that the American public has the opportunity to enjoy federally managed lands by paying fair and reasonable recreation fees.

During 1996, Congress authorized a Recreational Fee Demonstration Program providing the Federal land management agencies far-reaching discretion in creating recreation fee programs during the next three years. This Fee Demonstration Program allows the agencies to retain 80 percent of the revenue collected in excess of the amount collected in 1995, with 20 percent returning to the General Treasury. Currently, language contained in the fical year 1998 Interior Appropriations bill will allow the agencies to retain 80 percent of the revenue in the unit collecting the fee, and the remaining 20 percent to the Federal land management agency. This Subcommittee will continue it's oversight role to monitor the progress of this Recreation Fee Demonstration Program, and today's hearing will add valuable insight into the future success of National Park Service recreation fee programs.

As in many instances, the States are in the forefront of implementing new and creative solutions to old problems. Today, we will hear detailed and interesting testimony concerning how States are addressing the issue of tight fiscal constraints in park budgets by moving from general tax support to user fees to operate and maintain their State parks. Although, I do not believe that the National Park System should ever reach total self-sufficiency in its operations budget, I do believe that there are comparisons that can be made from the success of the States in operating and maintaining their parks.

I welcome Mr. Don Leal, Senior Associate of the Political Economy Research Center (PERC), Bozeman, Montana, who will present findings from his recently published policy paper entitled, ''Back to the Future to Save our Parks.'' I believe that many of us will be surprised to learn that sixteen State park systems currently obtain more than one-half of their operating costs from recreation fees, and that many others are heading in that direction.

Furthermore, I believe that this paper demonstrates that if user fees are reasonable, and that the public is informed that their fees are utilized in the park where collected, there is broad based support for recreation user fees.

I also welcome, Kenneth B. Jones, Deputy Director for Park Stewardship, California Department of Parks and Recreation, who will provide testimony on the tremendously successful transition the State of California park system is undertaking to address budgetary and management issues. The California park system is unique, consisting of 264 parks covering 1.3 million acres, including 11,000 picnic sites, 17,500 campsites, 280 miles of coastline, and 3,000 miles of trails. With over 70 million visitors enjoying this State system each year, it provides a true benchmark by which to measure our efforts at the Federal level.

I will let both of our distinguished panelists make their presentations so that we have their ideas and concepts on the table, and then I will recognize Members for their questions, but prior to that, I recognize my good friend and colleague from American Samoa, the Ranking Member of the Subcommittee, Mr. Faleomavaega.


STATEMENT OF HON. ENI FALEOMAVAEGA, A DELEGATE IN CONGRESS FROM THE TERRITORY OF AMERICAN SAMOA

Mr. FALEOMAVAEGA. Thank you, Mr. Chairman. And, Mr. Chairman, I understand one of the focuses of today's hearing will be on a report issued by a private organization known as the Political Economy Research Center, otherwise known as PERC.

The report entitled, ''Back to the Future to Save Our Parks,'' is based on the premise that, to use PERC's own words, popular parks can and should pay their own way. I believe this is a seriously flawed premise. We do not operate our national parks like Walt Disney charging what the market will bear.

Our national parks have value to the Nation whether they are visited by one or 1 million persons. Many members support reasonable fees for visiting national parks with the understanding that the money collected will remain in the parks. As you know, Mr. Chairman, this was the subject of considerable debate in the subcommittee last Congress. The key to fee collection is that is it fair, reasonable, and equitable?

If we were to follow PERC's recommendation, there would have to be a sevenfold increase in what is currently collected. This is not to say there is not room for improvement, and I will certainly approach today's hearing in that light. If there are ways we can ease the financial problems of our parks in a manner that is fair, reasonable, and equitable, then I am certain that we are willing to consider those options.

And, Mr. Chairman, at this time, I would like to welcome our witnesses this morning, and I am looking forward to hearing their testimonies. Thank you, Mr. Chairman.


Mr. HANSEN. Thank you. We are grateful to our panelists for being here. Thanks so much for coming. We will start with you, Mr. Leal, and then Mr. Jones. Is that all right? And, Mr. Leal, as we say in our business, the floor is yours.

STATEMENT OF DONALD R. LEAL, SENIOR ASSOCIATE, POLITICAL ECONOMY RESEARCH CENTER

Mr. LEAL. Thank you, Mr. Chairman. I am here today to present the case for returning our popular national parks to the self-supporting parks they originally were intended to be. It is not widely known, but the intent of our early national parks was that they would be self-supporting parks. Congressional appropriations were to be limited to the Initial investments in roads and visitor facilities.

In 1916, when Congress authorized the creation of the National Park Service, Interior Secretary Franklin Lane appointed Stephen Mather, a successful businessman and millionaire, to run the 14 existing national parks on a self-supporting basis.

In Mather's first report on parks to the Secretary, he states, ''It has been your desire that ultimately the revenues of several parks might be sufficient to cover the cost of administration and protection, and that Congress should only be requested to appropriate funds for their improvement. It appears at least five parks have a proven earning capacity sufficiently large to make their operation both feasible and practible.'' The five parks were Yellowstone, Yosemite, Mount Rainier, Sequoia, and what is now called Kings Canyon-Sequoia National Parks.

Importantly, at this time, park revenues were held in a special account accessible to the Park Service without congressional appropriation. Mather, the Director of the Park Service, considered this important for responsible management because, from the Park Service's perspective, there was a clear link between serving park visitors and having the funds necessary to manage the parks.

Unfortunately, Congress took control of all financing for parks in 1918 by requiring that all park fees be returned to the Federal Treasury, and this critical link between serving visitors and generating funds for managing the parks was broken. With revenues going to the Treasury and the lion's share of the funding coming from tax dollars, the Park Service has had little economic incentive to serve park visitors.

Moreover, park budgets have become political footballs. Raising money via allocations from the Treasury has been a matter of first denying customer service or letting park facilities run down in order to provide the necessary political impetus to free up more money for parks.

I can give you a great illustration of the political problems in our financing. The Superintendent of Yellowstone Park last year announced the closing of two museums in a popular campground called Norris Campground in order to save $70,000, the cost in operating these facilities. And he was right. He would save $70,000 in operating costs.

But the problem was those three facilities or, excuse me, just the campground alone generated $114,000. In other words, revenue from that operation alone actually surpassed the costs of operating the three facilities. From the Superintendent's perspective, he didn't see the revenue. It all went to the Federal Treasury. So it was rational for him to try to save money by closing the popular campground and the two museums.

Contrary to the view that tax-supported parks guarantees long-term protection, our national parks have suffered from poor incentives to maintain themselves. The Park Service says it has a $4.5 billion backlog of construction improvements and a $800 million backlog of major maintenance.

Are we to assume that our parks have fallen victim to a budget-conscious Congress? The evidence says no. From 1980 to 1995, the total budget of the Park Service nearly doubled from almost $700 million to $1.3 billion. Spending on operation, which includes staffing and wage increases, grew at a healthy inflation-adjusted annual rate of 3.1 percent, and full-time staff increased from 15,836 to 17,216 employees, more than enough to handle visitation which grew by less than 1.5 percent per year. While spending on the agency itself increased, spending for major park repairs and renovations fell at an inflation-adjusted annual rate of 1.5 percent.

The healthy increase in annual operating expenses has not led to better service in Yellowstone, Yosemite, and other popular parks. According to a recent Consumer's Report survey, the two most frequent complaints were crowded conditions and the lack of adequate visitor servcies. This sad state of affairs is brought about because most of the money to support parks is not earned from park visitors.

States, however, are showing us that as tax support for their parks declined, State park agencies generated more revenue from users. Spurred by nearly a 41 percent decline in real terms in general tax support for all State parks in the country, user fees collected at all State parks went from $182 million in 1980 or about 17 percent of the total State park spending, to $513 million in 1994 or one-third of total park spending.

In contrast, the Park Service collected $94 million representing about 7 percent of total spending by the agency. Like national parks, State parks have increased fees, but they have also raised revenue by being innovative in creating more services for park visitors.

Moreover, a number of State park systems are showing us that the idea of self-supporting parks, at least operationally, is a feasible goal when heavy reliance on tax support for park operations is no longer a viable option. Faced with dramatic declines in general tax support, 16 State park systems now regularly obtain more than half of their operating costs from user fees.

New Hampshire State Park System funds its entire $5 million operating budget out of entrance and camping fees, not out of condos or golf courses, but from just entrance and camping fees. In 1991, in the midst of a growing general fund crisis, the legislature required the park system to rely solely on park-generated revenue.

Park revenue has actually exceeded operating expenditure for three consecutive years prior to passage of the Act, but park receipts have been handed over to the State treasury. The 1991 Act let receipts flow into a park fund that carries over unspent park moneys from year to year. This encourages self-sufficiency because park officials know that they have a reliable source of money dedicated to parks over the long-term.

Texas is another great example of a State that is weaning itself from public funding. In the early 1980's, the Texas State Park System got almost 60 percent of its operating funding from general State taxes. It now gets 67 percent of its operating funding from user fees.

It has also devised institutional reforms to raise revenue and save money. The Texas park management developed the entrepreneurial budget system. This innovative, market based financing system rewards individual parks with larger operating budgets if they surpass their revenue or cost savings targets for the year.

With financial self-sufficiency as a goal, we can expect better service and greater efficiencies in running our parks. Comparing adjacent State and national parks in Texas, California, and South Dakota where the attractions and the natural amenities are about the same and the market areas are about the same, State parks, relying heavily on user support earn more revenues per acre, spend less per acre, and offer more services than the nearby national parks. And I include those examples in my Exhibits A, B, C, and D in this.

And now, thanks to Congress, the National Park Service is testing the waters of greater user support. Congress recently authorized a 3-year demonstration program that raises fees and allows greater fee retention. However, I think we need to even go further.

I think Congress should establish a fixed schedule that gradually reduces annual appropriations for park operations over a 10-year period until it reaches zero like they did in Texas and New Hampshire. Removing the heavy dependency on general funds spurred Texas, New Hampshire, and other State park systems to respond with greater revenue. The Park Service has to face the same reality.

Congress should allow park managers to institute their own fee-based services as long as these services are compatible with the protection of natural amenities. Most of the fees collected in these parks—95 percent at least—should remain in the park system. A small amount, perhaps 5 percent, could be used to fund the systemwise administration.

I also recommend that parks managers should be allowed to keep all cost savings and apply them to the budget for subsequent years. And, finally, each park should have a special park endowment fund for capital improvements. Capital allocations from the Treasury have a way of going to the creation of new parks instead of maintaining the existing ones.

Giving park managers a capital fund dedicated to the individual park and the wherewithal to finance it with road tolls, surpluses from the operating revenues, as well as other avenues will help them generate the needed capital to support the park.

Of course, some parks will not attract enough visitors or have enough commercially valued assets to be self-supporting. If these parks are to remain in the public domain, they should be funded separately out of general funds and not be subsidized by the high-use parks because this would weaken the incentives for revenue generation. These parks could also be turned over to private nonprofit groups with a one-time endowment to fund maintenance.

Requiring popular parks to be self-supporting, at least operationally, is the surest way of spurring responsible management and financial accountability. The idea of self-supporting parks is what early park supporters had in mind near the turn of the century when we were a much poorer Nation. Surely, with our higher incomes today, we as users of parks can afford to pay these amenities and help make our parks the treasures they should be. Thank you very much, Mr. Chairman.

Mr. HANSEN. Thank you, Mr. Leal; appreciate your excellent testimony. Mr. Jones, we will turn the time to you, sir, and thank you for being here.

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