Archive for August, 2010

ADOT and AASHTO Propose Siphoning Jobs and Customers From Small Town Business to Fix State Budget

Thursday, August 26th, 2010

 

In a recent video press release issued by the American Association of State Highway and Transportation Officials, the Arizona Department of Transportation proposes that states should compete with small-town businesses, siphoning jobs and customers to fix state budget shortfalls, by establishing commercial rest areas along the Interstate right-of-way.

 

Congress outlawed commercial activities at interstate rest areas to foster competition and the growth of local communities near the Interstate Highway System. Today, this policy continues to promote a vigorous competitive environment. In Arizona alone, nearly 1,200 businesses are located within a quarter mile of an interstate highway, employing more than 31,000 people.  Nationally, 97,000 businesses, including truckstops, gas stations, convenience stores and restaurants, thrive along the Interstate Highway System, employing 2.2 million Americans.

 

ADOT’s plan to overturn this law and allow commercial rest areas would drain local businesses of customers, jobs and local tax revenues by putting established businesses in direct competition with the state. At the same time, it would give the state an unfair competitive advantage by granting the state direct access to highway motorists.

 

Arizona’s plan represents a deliberate attempt to set up businesses on the Interstate right-of-way with full awareness that there are no new dollars or new traffic on the Interstate Highway System.

 

State budgets nationwide are stressed because of the economic downturn. But addressing those budget problems by adopting measures harmful to small town businesses and local communities is counterproductive and stands to create more problems in the long-term than they solve.

 

State financial budget problems are not a burden that should be handed to local business owners and local communities. Now is not the time to threaten businesses that will suffer in the form of lost jobs and property taxes used to support schools, police, fire and other public services.

 

Despite claims that commercial rest areas represent a positive public-private partnership, the reality is they represent state-controlled monopolies on travelers’ food, beverage, retail and fuel purchases because they alone will enjoy the best, easiest-to-access locations. Well-established local businesses that rely on motorists exiting the interstates will no longer be able to compete.

 

What’s more, while nearby businesses are left to flounder, consumers will pay hidden taxes in the form of higher costs for goods and services at commercialized rest areas as the large multi-national corporations contracted to run them seek to recoup investments and turn a profit for shareholders and the state.

 

 

New Jersey Fuel Merchants Association Decries Commercial Rest Areas

Tuesday, August 3rd, 2010

The New Jersey Fuel Merchants Association became the latest industry stakeholder to take a strong stand against commercialized rest areas last week, issuing a letter to Gov. Christie decrying calls to lease state rest areas to private companies offering food, fuel and other services as a means of shoring up state budget gaps.

In its letter, FMANJ said while it supports Gov. Christie’s broad goal of finding ways to more efficiently deliver essential government services and save taxpayers money, commercialized rest areas monopolize travelers’ business and starve small enterprises like truckstops, fuel retailers and restaurants that currently thrive near the Interstate exits.

FMANJ’s battle to tamp commercialized rest areas represents just one example in what is a quickly growing trend among states struggling to balance their budgets amid the weak economy. States like Arizona, Virginia, California, New Mexico and Washington increasingly are eyeing setting up businesses on the interstate right of way as a revenue generator.

Congress banned this practice, known as commercialization, in 1960 as a means of fostering community and business development along the Interstate highway system. In recent years, some 95,000 businesses thrive nationwide as a result of this ban, employing nearly 2.2 million people.

Some states are seeking to overturn the law through the upcoming reauthorization of the highway funding bill. What these states fail to recognize, however, is that overturning the longstanding Federal law isn’t a quick fix to short term economic woes.

A University of Maryland Study shows commercializing rest areas devastates businesses and local communities. By operating at an unfair advantage directly along the Interstate right of way, commercial rest areas siphon customers from nearby businesses. Failing local businesses mean less jobs, while property and income taxes local municipalities use to fund schools, fire and police protection are transferred to state coffers.

In 2009, New Jersey was home to 1,867 exit-based businesses. Of these, more than 60 percent would directly compete with the state’s rest areas. According to the University of Maryland study, these competing businesses employ more than 19,500 people and contribute more than $14 million in local property taxes.