HD40 - The Outdoor Recreation Needs of the Commonwealth

  • Published: 1988
  • Author: General Assembly. Joint Subcommittee
  • Enabling Authority: House Joint Resolution 204 (Regular Session, 1987)

Executive Summary:
I. Authority for Study

House Joint Resolution 204 (1987) established a joint subcommittee to study the outdoor recreation needs of the Commonwealth. The subcommittee was directed to assess the long-term needs of both state and local recreation acquisition, development and operational programs and to recommend stable long-term funding sources, including but not limited to park fees, bonding, use of private development of parks land and federal and state trust funds. The subcommittee was composed of eight members representing the House Committees on Conservation and Natural Resources, on Appropriations, and on Roads and Internal Navigation, the Senate Committees on Agriculture, Conservation and Natural Resources and on Finance, and two citizen members of the Outdoor Recreation Advisory Board.

II. Background

A. Past Studies

Virginia was the first state to open an entire park system at one time. In 1936, with financial assistance from the Civilian Conservation Corps, Virginia developed six parks (Douthat, Seashore, Hungry Mother, Fairy Stone, Westmoreland, Staunton), all of which continue to operate. Since the inception of the park system state government has assumed a role in providing public recreation. As early as 1953, Governor John S. Battle, by Executive Order, created an Interagency Committee on Recreation. The committee produced the first significant report on the status of recreational opportunities in Virginia. The report, entitled "Recreation as a Function of Government in Virginia," identified the need for state assistance in what was then a relatively new public recreation service.

The recognition of the importance of stable funding for recreation was documented again four years later in the "Report on State Parks, Commonwealth of Virginia" prepared by the Executive Director of the National Wildlife Federation in cooperation with the Virginia State Parks Commission. The report states:

During the CCC and WPA era of the thirties both National and State park systems were vastly benefited by public money and the leadership of the National Park Service. However, the park concept, including facilities and expansion, have chronically suffered from the lack of funds to carryon. No continuity of program due to insecure source of funds has undoubtedly been the greatest evil. Sporadic legislative recognition is not sufficient. Parks as well as other types of business, public and private, must have long-range plans if they are to succeed. A generous handout for a year or two and then a drying up of funds is not conducive to orderly development. The National Park Service and every state in the Union has found itself in this predicament at some time or other.

With respect to Virginia's parks system, the report concludes that state law provides broad authority to administer and expand the state park system, but it does not "provide continuity to financing a function that must be "carried on in part by concessions and in part by requests to the legislature."

In 1965 the General Assembly, recogn~z1ng that the Commonwealth had no comprehensive policy or plan for meeting present and anticipated needs for outdoor recreation, statutorily established the Virginia Outdoor Recreation Study Commission. The Commission was to "inventory and appraise the federal, State and local outdoor recreation facilities in Virginia in relation to its estimate of present and projected needs." Under the leadership of Senator Fitzgerald Bemiss, the Commission submitted a report entitled Virginia's Common Wealth, which found that (i) there was a strong and growing demand for more outdoor recreation opportunities and (ii) existing facilities were "inadequate for present demand with serious deficiencies in a number of localities and a variety of state parks." Among the Commission's recommendations were:

1. Adopt a state outdoor recreational and open space policy to guide the state and its political subdivisions;
2. Create a Commission of Outdoor Recreation to guide and coordinate statewide implementation of the Virginia Outdoor Plan;
3. Enlarge and improve the state park system; and
4. Aid localities in resource conservation and development by providing (a) research, guidance and technical assistance, (b) matching funds, and (c) legal powers.

The Commission proposed that within ten years (1966-1976) land should be acquired for thirty-six new parks, twenty of which should be developed within that period. This ten-year initiative was to be funded at $64 million, of which $24 million was to come from Federal Land and Water Conservation Fund grants and $40 million from state general fund appropriations. The Commission's report also noted that the "Division of Parks has been so seriously understaffed that it has been unable to prepare the site plans necessary to full and sound development of trails, campgrounds, and interpretation centers." These previous studies illustrate a continuing concern regarding the state's ability to develop a long-range plan for providing recreational opportunities which will meet an ever-increasing demand.

B. Current Situation

The Department of Conservation and Historic Resources, through its Division of Parks and Recreation, is responsible for the planning, operation and maintenance of the state park system as well as providing technical assistance to localities, agencies and organizations in developing or improving recreational programs and facilities. At present the Virginia state park system consists of thirty-six sites, including seven natural areas, six historic areas and twenty-three state parks. In addition, at the local level there are 122 full-time staffed park and recreation departments. Approximately twenty-nine percent of the counties do not have parks or recreation departments.

The state's initial effort to provide a funding source for meeting recreational needs was a result of action taken by the federal government. In 1964, Congress created the Land and Water Conservation Fund (L&WCF) to provide federal agencies, states and localities with financial assistance for the acquisition and development of outdoor recreation areas. These moneys were made available to states and localities on a matching basis. The state also provided general funds to be added to the grant program. The combined federal and state funds became known as the Virginia Outdoors Fund. This fund, with its significant federal contribution, is the primary source of revenue for land acquisition and park development activities. Between 1966 and 1987, $78,036,538 has been appropriated and obligated through these grant programs.

While the L&WCF has provided the bulk of the moneys available for capital improvement, this program has faced severe budget reductions in the past six years. As recently as 1980 Virginia received more than $7 million from the L&WCF. In 1987 Virginia's portion of these federal grant funds totaled only $700,000. The uncertainty of federal funds combined with the fact that the operational budget of the state parks has remained at level funding over the last several years ($5 - 6 million) has made it difficult to institute an orderly planning process and in some instances precludes construction of projects viewed as vital in meeting the demands of an increasing user population.

III. Subcommittee Deliberations

The joint subcommittee held five meetings at locations throughout the state (i.e. Fairy Stone State Park, Fairfax County, Hungry Mother State Park, Norfolk and Richmond). At each site the agenda included a business meeting followed by a public hearing and tour of a state or local park. The subcommittee was impressed by the amount of public interest in outdoor recreation. Attendance for the five meetings exceeded 350, with approximately 250 individuals testifying during the public hearings. Representatives of a variety of interest and advocacy groups, park users, and local government officials documented the need for additional recreational opportunities at both the state and local levels. Many of their comments and suggestion's provide the basis for the subcommittee's findings and recommendations.

A. Available Alternatives for Financing

The subcommittee reviewed the merits of funding approaches currently used to finance both the operation and capital needs of Virginia's state park system. The primary funding source for Virginia's state parks are general fund moneys, which represent approximately eighty-eight percent of the operating budget and thirty-six percent of the capital budget. The major advantage of the use of general funds is also its major drawback. While general funds are provided annually they are at the same time somewhat discretionary in nature, subject to the priorities established in a specific budget cycle. This makes planning for future development and acquisition difficult.

A second source of revenue is through user fees generated by the parks. Currently $1.65 million annually is realized through admission and parking fees, concessionaire operations, and rents from cabins and camping spaces. The advantages of "these types of fees are that (i) people who actually use the parks contribute towards the cost of operation and (ii) the fees can be tailored to market conditions. Among the disadvantages of such fees is that there is an upper limit on how much revenue can be generated. A significant increase in such fees could present a burden to lower income groups.

An alternative approach for generating significant revenue for operation and capital development is the leasing of parkland for private development. At present no state parks are leasing land, although one developer is interested in building a marina at Leesylvania State Park. Among the advantages of this approach are (i) no state funding would be needed for capital projects, (ii) the active recreation resulting from such development would draw a larger clientele to the parks, and (iii) additional operating revenue would be generated from both the lease and a portion of the developer's profit. There are two potential drawbacks of such an approach: (i) if the developer goes out of business and no one is found as a replacement, the state would have to take over the operation of the enterprise, thus requiring additional staff and (ii) it would encourage commercialization, which might change the character of recreation services.

Several current funding approaches are limited exclusively to the financing of capital projects. The primary source of capital funds for both state and local parks has in the past been the federal L&WCF grants. Typically, sixty percent of these federal funds are awarded to localities and forty percent go to state parks; however, the federal allocation has steadily declined over the years.

General obligation bonds have been occasionally used for state parks capital projects, e.g. $5 million bond issue was approved in 1977-78 for capital projects. The advantages of this type of funding are: (i) it provides a large amount of funds where there are extensive capital needs; (ii) since Virginia has a high bond rating, the amount of interest the state would have to pay would be below average; and (iii) the bond would be paid back over the life of the bond requiring less "up front money." The major disadvantages are (i) that a public referendum would be required before the bonds could be authorized for sale and (ii) Virginia has been reluctant to use this type of approach, preferring "to pay as you go."

A final alternative for generating revenue for capital projects is revenue bonds. These bonds are backed by the revenue generated by the capital project the bond is financing. The advantage of this approach is that no state funding would be required. The disadvantage is that state parks do not generate large enough projects that would interest investors in buying revenue bonds.

B. Financing of Other State Park Systems

Ms. Phyllis Myers, author of State Parks in a New Era: A Survey of Issues and Innovations, and officials of several state park systems briefed the subcommittee on funding alternatives utilized successfully by other states. Ms. Myers, a senior associate with the Conservation Foundation, indicated that many of the problems faced by Virginia's park system are being experienced by other states. Nationwide, federal funds represented the largest source of funding for acquisition and development of parkland. According to Ms. Myers, because of the decline in the federal commitment, state general funds and general obligation bonds have become the primary sources of revenue.

Under pressure to find additional funding, states in recent years have begun to tap revenue sources not directly generated by park use. Some states have been relying on earmarked or dedicated accounts. Ms. Myers' study points out that Oregon's parks have received funds from the state's highway trust fund between 1929 and 1980. Pennsylvania has used resources from oil and gas leases for recreation and conservation since 1955. Texas passed legislation in 1971 which earmarked a portion of its cigarette tax for state and local parks.

The subcommittee received testimony on some of the innovations for financing state parks from officials of West Virginia, Maryland and New Jersey. West Virginia, unlike Virginia, has a small tax base, which has further eroded with the recent repeal of the business and occupation tax. This resulted in a $149 million state shortfall. Last year parks received $10 million from the legislature. This year the figure has been reduced to $7.5 million. Given these circumstances, park officials have been challenged to make the park system self-sufficient by 1991. This has meant laying off some staff, closing some facilities, and increasing rents and fees significantly.

With tourism being West Virginia's second leading industry and its only growth industry, the park administration has embarked on a strategy which proposes to use the parks as magnets for tourism. This means incorporating a wide range of private sector ventures into the parks, including golf courses, ski areas, etc. To accomplish this the legislature recently passed a "privatization" bill, similar to Virginia's, which will allow private contractors to obtain a 25-year lease to develop profit making facilities within the state parks. The first contract has been awarded for the construction and operation of a $2 million aerial tramway. The state will receive a percentage of the profits and after twenty-five years, the operation will revert to the state. It is anticipated that a request for a proposal (RFP) will be put out each month for private development in the parks.

Because of the dramatic increase in land values and the lack of open space, New Jersey has made the acquisition of land its priority goal in the area of parks and recreation. To accomplish this goal the state created the Green Acres program in 1961. The program was funded initially by a $60 million Green Acres bond issue. Four subsequent bond issues totaling $615 million followed at approximately S-year intervals. During this time 187,719 acres of state park, forest, and fish and wildlife managements lands and 55,053 acres of county and municipal park lands have been purchased. In 1983, with bond funds running out and a demonstrated need for an additional $400 in projects pending, questions were raised as to the continued use of bonds to service those natural resources programs which required a continuous source of funding for their planning, management and development. The state looked at funding options which would stretch its available acquisition dollars. This led in 1983 to the creation of the Green Trust, a revolving loan fund to allow for 100 percent loans at two percent interest with a pay back over twenty years. To capitalize the trust, a $135 million bond issue for open space preservation, including state and local park lands, was approved by the voters. Under this bond issue $83 million was allocated to the Green Trust and $52 million was reserved for state acquisition and development over a five-year period. Recently, the Governor of New Jersey approved an addition to the trust of $35 million from a proposed $100 million bond issue and has lent his support to a large open space bond issue in 1989 to deal with the remainder of the trust's needs and to provide for delayed state acquisition.

A similar concern by the Maryland legislature regarding the rising population and the decreasing availability of recreational open space due to increasing development caused the state to embark on a long-term program of land acquisition. In 1970, Program Open Space (POS) was created to expedite the purchase of public open space lands before land values inflation rendered them unaffordable and development made them undesirable. The POS has been successful in providing a buffer to urban development. The program has been funded through a combination of general obligation bonds and a 0.5% transfer tax on land sales. The bonds issued in 1969 provided $20 million. The transfer tax, which was initially used to retire the bonds, now represents the sole funding source for POS. Through 1987 a total of $383.6 million has been allocated to the program, with half going for state land acquisition and half for local (county and municipal) land acquisition and recreation development. This year program funding will be capped at $29 million annually. Of the 393,944 total acres authorized for acquisition by the PCS, 320,000 have been acquired to date.