Alternative Funding Mechanisms for Public Recreation: An Analysis of the Montana State Parks Opt-Out Fee
Financing remains one of the greatest challenges facing public parks and recreation managers in the United States. Managers are confronted with the challenge of providing more services for a growing population with dwindling public financial support (Fretwell and Frost, 2006). Adequate funding has been described as the most important factor in the delivery of recreation at the local level (Gladwell, Anderson, and Sellers, 2003). While public recreation funding originally came primarily from general tax revenues at the federal, state and local levels, shrinking appropriations over the last few decades have caused agency managers to experiment with alternative funding sources. Much of the focus in recent years has been the increased utilization of user fees. User fees in parks and recreation areas vary from general (entrance into parks) to specific (camping fees or boat dock fees). User fees have been shown to generate revenue and increase economic efficiency and equity, but opponents contend that they pose a disproportionate burden on low-income groups (More, 1999; Samnaliev, More, and Stevens, 2006; More and Stevens, 2000) and turn a public good meant for everybody into an excludable private good (Samnaliev, More, and Stevens, 2006). In 2003, the State of Montana took an alternative approach by enacting an opt-out fee during vehicle registration to fund state parks. Several other states, including California, Michigan, Arizona, and Washington, have experimented with a vehicle registration fee based on the Montana model. The purpose of this study is to evaluate the Montana opt-out fee to determine if it is a viable alternative funding solution to increase revenue, improve efficiency, and ensure equity in the provision of public recreation. Utilizing a case study approach, the origins of the opt-out fee, including the authorizing legislation, and budgetary implications are reviewed. Since the literature on public recreation opt-out fees is limited, this analysis of the opt-out fee is conducted by utilizing public financing criteria from Mikesell (2007), including efficiency, equity, collection cost/simplicity, and revenue consequences. These are operationalized for the public recreation context through themes from research on public recreation user fees. While the Montana opt-out fee raised significantly more revenue than previous sources, the Montana State Parks system continues to face financial challenges associated with rising operational costs. Additionally, efficiency and equity were actually harmed when viewed from a user fee perspective. However, collection cost/simplicity was improved through the opt-out fee. The mixed results of the analysis coupled with the high performance of the revenue generating function of the fee suggest that the opt-out fee performs much differently than a typical public recreation user fee. While the revenue potential of an opt-out fee is apparent, further inquiry should be conducted to explore the fee from the perspectives of political feasibility and individual compliance with the voluntary fee. In a difficult financial climate for state and local governments, the opt-out fee remains a potential independent funding stream for public recreation, but more studies are needed before the fee is adopted by multiple state parks programs.
Networked Digital Library of Theses and Dissertations