Posts Tagged ‘public-private partnerships’

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.

Commercial Rest Areas Devastate Local Communities

Thursday, July 29th, 2010

As a party with a clear interest in serving the needs of highway travelers, NATSO welcomed the Pew Institute’s recent examination of commercialized rest areas.

However, it’s imperative that state options to maintain highway safety and close gaping budget deficits be carefully considered from the perspective of all parties, especially the small towns that depend on traveler dollars.

The perception that adding food, fuel and other retail services to state rest areas is a silver bullet solution for closing huge budget deficits errs in regarding the option as a painless one.

There’s a reason Congress outlawed commercialization in 1960, and renewed it again and again during the ensuing 50 years. Research has shown that allowing states to develop and lease full-service rest areas along a highway would monopolize travelers’ business, starving the small enterprises, from truckstops to farm stands, which have sprouted near the exits.

A landmark study by the University of Maryland showed definitively that on sections of Interstate where commercial services are permitted at rest areas, nearly half as many exit-based businesses thrive. Nowhere is this demonstrated more dramatically than along Interstate-95, which runs through both Maryland and Virginia.

Maryland, which was grandfathered in and not subject to the prohibition, has two commercialized rest areas and only 201 businesses at the exit interchanges over 109 miles. Virginia, which does not have commercialized rest areas, has more than 858 exit-based businesses over 178 miles of I-95. Even taking into account the extra miles, the difference in commercial development along I-95 is striking, meaning more jobs, a healthier tax-base for local communities and more commerce for local communities and Virginians.

Adding commercial services to rest areas may add dollars to state coffers. But commercial rest areas merely redirect those revenues from town and county treasuries, which count on the property and income taxes from traveler-dependent businesses to provide essential services like sewer maintenance and police and fire protection. Reversing 50 years of federal policy would rob Small Town Peter to pay Statehouse Paul.

We also have to note that the dollars generated would hardly be the godsend the states suggest. Proceeds would amount to a few million dollars. But many of the states cited are facing budget deficits running to hundreds of millions, if not billions.

As much as we appreciate efforts to stimulate a dialogue, it is an incorrect assertion that commercializing rest areas would boost highway safety.

Studies have shown that truck drivers have fewer places to park and rest when states own and lease out rest areas along their highways. Like any other commercial landlord, states aim to maximize revenues by leasing space to big revenue-generators that can afford higher rents.

Parking spaces don’t fit that bill. On average, state-run facilities have two fewer parking spaces per mile than comparable operations located near the exits. Private, exit-based businesses provide more than 90 percent of all overnight parking.