Reforming the Park Service

Table of Contents

User Fees: The Key to Reform

The problems facing the national parks are numerous and severe. Yet most of the reforms proposed by preservation groups, the administration, and other interest groups will not solve those problems because they simply do not address the root causes of Park Service turmoil.

The root problem is that the system of funding national parks out of tax dollars creates perverse incentives for both Congress and park managers. These perverse incentives lead directly to overcrowding, user conflicts, deferred maintenance, and damaged ecosystems.

Many of the parks' external threats are caused by profit-seeking private landowners. Many of the parks' internal threats are caused by pork-seeking politicians. To many, profits and pork are both dirty words, but of the two, profits are easier to fix. The problem with profit-seeking is that it is biased toward activities that are valued in the market. The problem with pork is that it is biased toward activities that generate votes. It is easier to create markets for resources like recreation and scenery than it is to create votes for facilities maintenance and ecosystem management.

The single step that will solve nearly all these problems, then, is a system of user fees. If carefully crafted to create the proper incentives, user fees would moderate overcrowding, prevent overdevelopment of parks, resolve conflicts between users, sustainably manage essential facilities, and promote ecosystem restoration.

To understand how user fees can do all this, it is necessary to first understand why the current system doesn't work. That means examining the incentives that face park managers.

Park Incentives Today

The national parks are run by good people who sincerely want what is best for the parks. But like any other people, they respond to incentives--and the incentives created by Congress and the political process have not always led to the best possible outcome.

Since before the Park Service began, Congress has used the parks as particularly visible form of pork barrel. And the first rule of pork is that government spending rises to its highest political value. This has important implications for the national parks. Congressional action has made clear that:

  1. Creating new parks--especially in states or congressional districts that have no parks--has a higher political value than sustaining existing parks.
  2. Building new facilities in parks has a higher political value than maintaining existing facilities.
  3. Getting visitors has a higher political value that merely preserving ecosystems or history.
In short, Congress has an incentive to promote development and acquisition over protection and maintenance. Park managers, in turn, have incentives to advocate development and use over preservation and ecosystem restoration. All these incentives are bad--yet changing the names of the people in charge of the Park Service won't change the incentives one bit.

Most of the major directors of the Park Service have responded primarily to one of these rules. Stephen Mather's work emphasized rule 3. Rule 2 was championed by Horace Albright, George Hartzog, and William Whalen. Arno Cammerer, with the Civilian Conservation Corps, and Conrad Wirth, with Mission 66, were most attracted by rule 1--which also seems to be the rule dominating Congress in recent years.

Bureaucracies funded out of tax dollars are under continual pressure to follow the rules of pork in order to get adequate funding--and sometimes just to survive. If Horace Albright had not convinced President Roosevelt to give him the Army's battlefields and the Forest Service's monuments, there might not be a Park Service today. If Conrad Wirth had not successfully promoted Mission 66, the national parks could not have handled the incredible hordes of visitors that came in the 1950s and 1960s.

Even when some, like Dickenson and Ridenour, are content to let the Park Service rest on its laurels, they tend to be crowded out by go-getters who promote the agency's growth. By pushing hard for the California Desert Wilderness Act, the current administration added seven million acres to the Park Service's domain.

Yet it is clear that growth alone will not solve the Park Service's problems. Political growth produces no "trickle down" effect. In fact, growth in the Park System can actually force reductions in the budgets of existing parks as the agency scrambles to spread limited resources over all of its domain.

User fees are the only significant alternative to funding agencies like the Park Service out of tax dollars. Yet user fees alone won't work--they have to be tied to the correct incentives. When Congress allowed the Park Service to increase recreation fees in 1987, but cut appropriations to compensate in 1988, it effectively eliminated any incentive to charge fees. When Congress gives the parks less than 10 percent of the fees they collect, it shrinks any incentive to respond to the users paying the fees.

On the other hand, proposals to charge the highest fees to the most development-oriented uses, such as concessions or recreation-vehicle campgrounds, creates another perverse incentive. If parks are allowed to keep those fees, then they will be rewarded when they emphasize such developments and penalized when they choose uses that conflict with such developments.

Designing the Right Incentives

To provide the right incentives, user fees must meet the following tests: This proposal should solve most, if not all, of the problems that beset the national parks. Anything short of this proposal will continue to encourage overdevelopment, conflicts between users, and deterioration of park resources.

The key elements of this proposal are:

  1. Fair market value
  2. Park self-sufficiency
  3. Funding out of net
  4. Preservation trust funds
  5. Just doing it
  6. A takeover process

Fair Market Value

Every unit of the National Park System should be allowed to collect fair market value from recreationists, concessioners, and other users. For taxpayers, users, other land-management agencies, and private landowners, fair market value is the only fair way to set prices.

Fair market value doesn't mean that Congress orders an expensive study to determine the "correct" price for every national park. Instead, it means that each park should explore different prices for various services--concessions, camping, touring, hiking, or whatever. The "right" price will vary from park to park, year to year, and use to use.

Fair market value is fair to taxpayers because it insures that those who get the most of the benefits from the parks also pay the costs. It won't be a case of people having to pay for something they already paid for out of their taxes. Instead, user fees represent rent that each park user must pay to the other 250 million Americans who share ownership of the parks.

Fair market value is fair to users because it creates incentives to provide the uses people really want--not what some congressman wants for his or her district. Fair market value fees will help park managers allocate parks to competing users--such as rafts versus motorboats on wild rivers--because managers will have an incentive to design a system that makes everyone happy.

Fair market value is fair to other agencies, such as state parks departments, and private landowners because it will allow them to charge fees without having to compete against below-cost recreation on the national parks. This in turn will help promote better management on all lands, not just federal lands.

Park Self-Sufficiency

Park funds must come from the fees (including donations) that they themselves generate. This means no Golden Eagle passes, no cross-subsidization of parks, and no funding out of tax dollars.

The Golden Eagle pass, which allows people to enter every park, probably cannot work on a user-fee system at the national level because of the difficulty of apportioning income to all the parks. If I buy a Golden Eagle pass from Yosemite, but spend most of my recreation time in Golden Gate Recreation Area, which park gets the money? A national pass makes no more sense than Holiday Inn selling a national pass to all its hotels or Safeway selling a pass to all of its stores.

Entry fees could be charged in the form of either a short-term permit or an annual pass. It might even be possible for a cluster of parks, such as Yellowstone-Grand Teton, to sell a single pass for several parks in the cluster and somehow apportion the fees. Conceivably, the bookkeeping problems of a single national pass could be solved with some kind of magnetic strip that every park could use to record entries--but such a pass would be so expensive that few would buy it anyway.

Congress' current user fee distribution formula allows the Park Service to cross-subsidize non-fee parks with some of the fees collected from fee parks. But cross-subsidies create perverse incentives. The parks collecting fees have less of an incentive to collect them because they keep a smaller share. Parks not collecting fees become responsive to some arbitrary criteria, such as high visitation or the favorite projects of the official distributing the funds.

The most controversial park of this proposal may be that parks should receive no tax dollars--just funding from user fees. This is essential because the dangers of inadequate funding are less than the dangers of pork barrel politics. If parks are allowed to receive any funding from appropriations, then parks will still have most or all of today's perverse incentives: Incentives to emphasize development, incentives to emphasize overcrowding, and incentives to cater to special interests such as concessioners.

Of course, a system of funding out of user fees would completely eliminate the centralized structure that governs the Park Service today. When the Park Service is funded from tax dollars, it is no surprise that the park office with the most number of employees is not Yellowstone or Yosemite, but the national office in Washington, DC. A user-fee funded park system would have no national office and no regional offices. Individual parks would be free to share services with other nearby parks as they see fit.

Funding out of Net

It is tempting to say that parks should be allowed to keep all of the income they earn. But parks shouldn't be funded out of their gross income; they should receive a fixed share of the net income they earn.

The accounting problem is simple, especially if parks receive no appropriated funds. At the end of each year, each park's receipts will be compared against its expenses. Some percentage of the difference--the net income--would be returned to the park for future operations. The remainder would go to the U.S. Treasury.

Parks that are funded out of net income will have an incentive to maximize their net income. This means that they will try to avoid any money-losing projects. But parks are funded out of gross income will have an incentive to maximize gross income--and to spend it all. In order to spend all their gross income, they will have to find money-losing projects that balance out any money-making projects they do.

Thus, a park that is funded out of its net income will tend to be much more preservation oriented and less eager to build roads and other developments than a park that is funded out of gross.

The percentage of net income that parks can be allowed to keep can vary. If it is 100 percent, then parks will keep about half of their gross income and will only invest in projects that earn $2 for every dollar invested. If it is 200 percent, then parks will keep two-thirds of their gross income and will invest in any project that earns $1.50 for every dollar spent. The actual percentage is less important than basing the formula on net income--although if the percentage is too high their won't be much funds left over for the preservation trust funds discussed below.

Preservation Trust Funds

User fees will give parks incentives to cater to recreationists and other users. While this is better than the incentives parks currently face, the Park Service also has a mission of protecting historic and natural resources. To provide incentives for this mission, a share of gross user fees--perhaps 20 percent--should be dedicated to trust funds for natural, prehistoric, and historic preservation.

The natural preservation trust fund would come from the fees earned by 163 parks that are primarily of natural interest. The prehistoric preservation trust fund would come from the fees earned by 28 parks that are primarily of paleontological or archeological interest. The historic preservation trust fund would come from the fees earned by 176 parks that are primarily of historic interest.

Each trust fund would be governed by a board of trustees selected for their expertise in natural or historic preservation. The boards could initiate projects as well as accept proposals from the individual parks for projects to restore or preserve natural or historic resources. This could include anything from land acquisition to prescribed burning of forests or preservation of Frederick Law Olmsted's papers. Trust funds could not be spent on construction, maintenance, or operation of recreation facilities.

Just Doing It

The proposal should be implemented almost overnight--not phased in over a period of years. In the first year, Congress should give each park seed money equal to the previous year's funding. After that the parks will be on their own.

This is a lesson learned from eastern European and other ex-communist countries that are attempting to reform their economies. A clear pattern among those countries has shown that attempts to phase in reforms over several years generally fail--the legislature that is doling out the pork always has an excuse to prolong the implementation. Countries that have employed "shock therapy"--rapid conversion from communist to market economies--are the best off, with rising standards of living and the least amounts of poverty.

A Takeover Process

To fund themselves out of net user fees, most parks will have to slash their budgets--particularly the budgets required to build and maintain expensive facilities such as visitors centers, roads, and employee housing. But even after doing so, some parks will simply not be able to make it. A process should be set up for allowing parks that can't make it to be taken over by other parks or by state agencies or non-profit organizations.

Such a process might involve some sort of bidding. Eligible bidders could include other national parks, state or local park agencies, or non-profit organizations. The actual amounts received from such bids would be small--they might even be negative in some instances. Funds received from such bidders could be placed in a trust fund that would be used to preserve park resources should the applicants fail.

How User Fees Will Solve Park Problems

No system is perfect. But the user fee system described above will go far toward resolving or eliminating nearly all of the problems that beset the Park Service.

Creation of Unsuitable Parks

Congress creates unsuitable parks today as favors to local constituents--tax dollars paid by all taxpayers are used to benefit a few in the local state or district. But Congress won't do local constituents any favors if it creates parks that immediately go bankrupt. Funding parks out of their income greatly reduces the incentive for Congress to create low-grade parks.

Pork Barrel Construction

Congress has two types of committees: the authorizing committees, which decide whether money can be spent, and the appropriations committees, which actually spend the money. The appropriations committees cannot spend money that hasn't been authorized by an authorizing committee.

Some of the new, unsuitable parks and all of the pork barrel construction projects have come out of the appropriations committees. This proposal for reforming the parks through user fees essentially calls for the authorizing committees to no longer authorize any tax funds to be spent on the parks. This will eliminate the opportunity for appropriations committee members to pork out on parks.


User fees will eliminate overcrowding for the simple reason that the overcrowded areas are the most popular and will charge the highest prices. Recreationists in Yosemite Valley will have to pay more than recreationists in Death Valley or even recreations in Hetch Hetchy Valley. The lower fees in less popular areas will lead people to disperse to those areas.

But won't a park that is funded out of user fees try to encourage overuse in order to get more revenue? Probably not if the park is small; absolutely not if the park is large.

In any park, the revenue that is collected is equal to the price times the number of people who pay it. Park users are interested in quality experiences--else why leave the freeways of Los Angeles or the streets of New York City?--and most regard crowds as a diminishment of quality. This means that people will pay more for a less crowded experience.

At the same time, serving large crowds can cost more per person than serving a few people. Roads must be broader and built to higher standards. Campgrounds must be maintained in more marginal areas. With per-person costs rising and per-person willingness to pay falling as crowds increase, parks trying to maximize net income will select a user fee that tends to reduce crowds. The fee won't be so high as to eliminate users, but it will be high enough to have less crowding than under the current system.

Preservation Versus Development

The Park Service overdevelops parks because it has an incentive to do so: The laws of pork state that Congress is more likely to fund highly visible projects like construction of roads or visitors centers than more subtle programs such as ecosystem protection or maintenance of facilities.

Funding parks out of user fees will decide most conflicts between preservation and development in favor of preservation. The reason is simple: Few parks will have the funds needed to do much development. Most parks are already overdeveloped, and many will be forced to remove facilities that are too expensive to maintain.

Even in the most popular parks, developments will be few. First, the parks' greatest value is that they are mostly undeveloped, whereas adjacent private lands have many roads and buildings.

Second, just a few acres can satisfy the demand for a huge amount of developed recreation because such recreation is money-intensive, not land intensive. For example, 99 percent of the people visiting Yellowstone stay in the developed areas which make up less than 2 percent of the park.

State parks departments that depend on user fees have sometimes proposed such things as using state parks for golf courses or other developments. But the reason for this is simple: With national parks, national forests, and other federal lands giving away their recreation at practically no charge, state parks cannot charge fair market value for undeveloped recreation. Once federal lands charge fair market value, the states can make their parks pay their way without developments.

Some people fear that funding outdoor recreation out of user fees will turn the national parks into Disneylands. But Disneyland and DisneyWorld are actually an instructives example of how user fees can work. Disneyland was built in the 1950s on 200 acres of California orange groves. WIthin a few years, the park was surrounded by a sea of motels, fast food stands, and other businesses catering to Disney tourists.

In the 1960s, when DisneyWorld was planned, the company bought 30,000 acres in Florida. DisneyWorld itself occupies just a few hundred of those acres--the rest are a buffer to protect it from the developments that surround Disneyland. The attraction to DisneyWorld is the development, but the attraction to the parks is the undeveloped area. So the average park will need even a smaller portion devoted to development.

User Conflicts

Many national parks suffer from conflicts between various recreation users. Typical is the conflict between motor boats and paddle boats on the Grand Canyon's Colorado River. User fees will resolve such conflicts by giving the Park Service the incentive to manage resources for the highest and best use.

This doesn't mean that any park or resource will be entirely dedicated to one use. While that frequently happens with political allocations, it almost never happens with allocations based on user fees. Instead, the user fees will give park managers an incentive to find a way to allow some of all uses. The motor boat versus paddle boat debate might be resolved by allowing motor boats on the river one or two days a week.

In general, however, a user-fee based national park will tend to favor uses that require the least cost. Fewer campgrounds, for example, will come with full hookups because those are expensive and can easily be provided on private lands outside the parks. Instead, the vast majority of park acres will be dedicated to low-cost uses for which they are most valuable and for which there are few substitutes on private land--which mostly means undeveloped wilderness.

Lack of Funds

It is hard to imagine that a proposal likely to cut the Park Service's budget in half will solve its perennial shortage of funds. But by making sure that the funds go where they belong--in the parks where the people are rather than in the bureaucracy or in parks favored by powerful members of Congress--user fees will help relieve shortages and promote funding stability.

Although the total Park Service budget is $1.5 billion, the parks only get about 60 percent of the operations budget--roughly $600 million. The parks also get funds for construction, but much of the new construction isn't really needed--it's pure pork.

The parks that are the most overcrowded and most often cited for having serious maintenance needs, such as Yosemite, Sequoia, and Yellowstone, are precisely the ones that will easily collect enough revenues to pay for those needs. Other parks will be able to determine their own priorities of where to spend funds instead of having to spend them as Congress directs.

Developments Outside Parks

Park advocates such as William Penn Mott dream of giving the Park Service control over lands within a "buffer strip" around parks to protect parks from overdevelopment. But this would be extremely controversial and divisive. Others suggest better "coordination" with other agencies such as the Forest Service. But this fails to address the real problem: If agencies like the Forest Service are developing their lands in ways that are harmful to the parks, it is because the agencies have an incentive to do so.

The real key to protecting areas near parks is not coercian or coordination but incentives: Other public and private landowners will protect their lands if they have an incentive to do so. Recreation user fees on national parks would spill over onto other lands, giving all land managers a reason to protect recreation values on their land.

Grandfather Mountain, the 10,000-acre private wilderness near the Blue Ridge Parkway, survives because it is near a national park and gets business from park tourists. But if the park charged user fees at market value, Grandfather Mountain would thrive and other large landowners would emulate its example.

Protection of Ecosystems

Funding parks out of user fees will tend to protect ecosystems because much of the damage to park ecosystems has come from Congressional appropriations. Federal funding extirpated wolves and other predators from the national parks. Federal funding sustained the fire suppression programs that have done so much damage to many Western parks. Without federal funding, parks would have found it much more efficient to maintain some predators and to allow some fires to burn.

User fees might, however, lead parks to favor some ecosystem imbalances. Elk are overrunning Yellowstone and Rocky Mountain parks partly because tourists like to look at elk. This is where the preservation trust fund comes in: A natural preservation board of trustees can decide to give park managers an incentive to cull elk herds by, for example, paying for each elk that is trapped or shot. The trust funds can take whatever other steps are necessary to promote the restoration of ecosystems that would not happen simply as a result of user fees.


Funding parks out of net user fees, including concessions royalties, would completely transform the incentives that face park managers regarding concessions. Currently, parks are not allowed to keep any concessions receipts. So they charge low royalties and ask concessioners to perform in-kind services.

Funding out of user fees will give managers incentives to renegotiate concessions contracts to get as much money out of concessioners as possible. In some cases, this may mean opening concessions to competitive bidding. In others, it may simply mean hard negotiations with existing concessioners. No single solution is always best, but user fees will give each park manager an incentive to find the best solution for each park.

Returning a share of net concession fees to the parks will not make parks particularly beholden to concessioners. Concessioners who have the power to get the Secretary of the Interior to fire a Park Service director will find that power disappated when they have to deal solely with local park managers who can put up their concessions for open bidding. Moreover, concessions receipts are likely to amount to no more than 10 percent of all park user fees, so parks will be much more responsive to the desires of other park users.

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