Archive for February, 2010

Georgia’s Rest Area Sledgehammer

Thursday, February 4th, 2010

The Georgia state government is proposing to take a sledgehammer to business and jobs at a time when its bankruptcy and unemployment rates are among the Nation’s highest.

The Georgia Department of Transportation this week said it aims to bolster state budgets by renting some of its right-of-way parcels and adding gas stations and restaurants to its highway rest areas – a practice currently banned under Federal law.

If Georgia succeeds, this ill-conceived idea will devastate local businesses whose survival depends on motorists exiting the Interstate.

Government-run rest areas offering food and fuel and other retail services will alter the competitive landscape. The Government gets the advantage by owning prime real estate directly along the Interstate — locations most easily accessed by motorists.

A University of Maryland study confirms this. The state kills the local businesses due to its competitive advantage of being located on the right-of-way as opposed to the exit.  The study found that state-run commercialized rest areas resulted in 50 percent fewer businesses along those corridors.

Allowing Georgia to overturn this ban is a sure-fire way to make a weak economy worse. Georgia already boasts the third-highest business bankruptcy rate in the nation and double-digit unemployment figures. It can ill-afford to further depress its local economies.

The Federal Government barred states from operating retail services in rest areas more than five decades ago precisely to spur local business development. Today, more than 60,000 businesses operate along the interstate system.

Lifting the ban is a short-sighted solution to the short-term hurdle of a down economy.

Commercialization Threats Emerge Across the Country

Tuesday, February 2nd, 2010

With state governments still struggling to balance their budgets, several state lawmakers have eyed rest areas as a potential revenue stream.  In at least four states, legislators have introduced bills examining the possibility of commercializing rest areas, signaling a heightened interest in this issue.  Let’s hope these lawmakers consider the impact of such a policy on local communities and businesses, which would suffer tremendously if commercialization were allowed.

So far in 2010, commercialization bills have been introduced in:

  • Virginia – a state which attracted widespread criticism in 2009 for shutting down 23 rest areas. State representative David Nutter introduced legislation (HJ 126) that, if approved, would study the feasibility of rest area commercialization.
  • Mississippi - similar legislation has been introduced by state Representative John Mayo (HB 374), calling on Mississippi to investigate the prospects of commercialization.
  • Washington - five state senators introduced a bill (SB 6465) allowing full-scale commercialization of rest areas if approved by the federal government.
  • Georgia – six state senators introduced legislation (SR 822) urging the Georgia Department of Transportation to seek a waiver from the Federal Highway Administration allowing retail developments at Interstate highway rest areas. The Chair of the Georgia State Transportation Committee has even said he supports a “yard sale” for the state, selling off any land possible.

We recognize that these are tough economic times. But the ban on commercialized rest areas has been good public policy for over 50 years, fostering intense competition among businesses for the services of interstate motorists. Changing this policy now would serve as an act of desperation to combat the short-term challenges of a down economy.

Coalition Supports Virginia’s Efforts to Reopen Rest Areas

Tuesday, February 2nd, 2010

Earlier this month, Virginia’s recently inaugurated Gov. Bob McDonnell announced that all 19 rest areas in the state that were closed last summer would reopen by mid-April. McDonnell had made reopening the rest areas a top pledge during last year’s campaign. McDonnell’s plan would use reserve funds to reopen the rest areas, while Virginia Transportation Secretary Sean Connaughton develops a more sustainable plan for operating the facilities over the long term. In confirming this approach, the prospect of commercialization was not discussed as an option.

Prior to McDonnell’s announcement, the Partnership to Save Highway Communities sent a letter to the Governor, offering to assist the new administration in developing ways to preserve the rest areas without resorting to commercializing them. Gov. McDonnell has suggested programs such as an “adopt a rest area” plan or the use of state inmates for maintenance projects, both of which would cut costs to the state without directly competing against private businesses located just off the right of way.

We hope that Virginia can serve a model for other states seeking solutions to keeping their rest areas open without resorting to unfair competition. Our coalition is eager to work with the Virginia Department of Transportation in this endeavor.