March 2013 - Parks & Recreation - 12

Front Page
Dedicated Funds for State Parks:
Designing the Right Approach
By Margaret Walls

he recent recession has compounded an already serious funding problem for state parks. General fund revenues for parks, declining nationwide since the 1990s, have nosedived in many states in recent years.
State park systems have responded by cutting their operating costs in a variety
of ways and searching for new revenue sources. They have looked at significant
increases in user fees; greater reliance on the private sector through more expansive concessionaire agreements, corporate sponsorships, and various kinds of
partnership arrangements; and some tentative steps toward more philanthropy
and enhanced relationships with conservancies and nonprofits. In addition, in
an effort to avoid the ups and downs of the legislative appropriations process
and ensure some baseline public funding, some park advocates are pushing for
greater reliance on dedicated, or earmarked, public funding streams.
Creating such a fund can be an uphill battle. In some states, advocates
work directly with the legislature for
the introduction of a bill. In others, the
effort is directed toward ballot initiatives. In some cases, the fund may be
created through an amendment to the
state constitution. But is this approach
for state parks a good idea? What are
the pros and cons? And if states are to
go this route, what sources of revenue should they be looking to?

off-road uses; real estate transfer fees;
and oil, gas, and other mineral revenues from lease payments and severance taxes. Some states have multiple
funds. In Oregon, for example, lottery
proceeds and an RV tax provide funds

Background on
Dedicated Funds
Many states already have
dedicated funds for state
parks, though in some cases, they raise only a limited
amount of revenue. These
funds are financed by lottery
proceeds; general sales taxes;
motor vehicle registration fees;
hunting and fishing licenses; fees
on RV, ATV, boat, and snowmobile
registrations; motor fuel taxes from

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for state park operations. Minnesota
relies on both a dedicated sales tax and
lottery revenues.
Use of dedicated funds has risen over
the past two decades. In 1990, only
seven percent of state park operating
expenditures nationwide were covered
by dedicated funds; by 2011, that figure
had risen to more than 20 percent. In
the 11 states that received no general fund revenues in 2011, the share of
operating costs covered by dedicated
funds averaged 48 percent. The highest
share was in Maryland at 67 percent.
Sales Taxes
Ideally, a dedicated fund should be created from a tax or fee with a relatively
broad base. A general sales tax on all
goods and services is one example. Because the tax is assessed on a large number of transactions, a relatively low tax
rate can generate a reasonable amount
of revenue for parks without overly
burdening households. Three states
with sales taxes for state parks-
Missouri, Arkansas, and Minnesota-have rates that range
from one-tenth to three-eighths
of one percent, so an average
person pays only between $20
and $30 per year.
The broad base also ensures
that all citizens are contributing
to state parks. This is important
as it can help create broad support
for the parks and limit the influence of any single interest group. In
Missouri, the sales tax for state parks

March 2013 - Parks & Recreation

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