Tag: New Jersey

More Privatization Ignorance

Every time I hear a rant against privatization, I hardly have to wait 30 seconds before the “you will build a McDonald’s in front of Old Faithful” card is played.  Jeff Tittle of the New Jersey Sierra Club does not disappoint:

Private companies could end up determining public access, use, and costs….

Increasing privatization means we will see more battles like privatization of Fort Hancock at Sandy Hook, or the construction of “Disney Land” in Yosemite. More state lands would be turned into country clubs, amusement parks, or cute historic themed shopping centers. We don’t want to see a historic building where Washington’s army stopped turned into a fast food shop….

The sale of naming rights creates a potential for a cultural and historical disaster. New Jersey could end up with Jello Cheesequake State Park, Jeep Liberty State Park or Fort Mott’s Applesauce State Park. This would detract from the historic significance of parks that are public assets, not corporate assets.

It just doesn’t work this way, at least not in well-managed public agencies.  Check out any of these parks here — these are all public parks that are privately managed.  All of them look natural, because they are and are required to stay that way.  In not one single contract are we allowed to, under any circumstances, determine public access or use, and in no contract can we change fees without state approval.  I suppose there are examples out there of private companies that have been allowed to build condos in what should have been a wilderness area, but is that a failure of privatization or of the government agency managing the process?  I get that Mr. Tittle does not trust the state of New Jersey to be able to structure or run these partnerships, but I wonder, given that, why he trusts them to run the parks at all?  Take this for example

The lease of Farley Marina led to scandals in which state employees got favors in exchange for illegally leasing boat slips.

That is certainly a bad outcome.  So instead of kicking out the private vendor and getting a better managed one we should, what?  Hand it back to the state agency whose employees are accepting bribes?

Private companies will emphasize the bottom line over the visitor experience.

I am sure there are ways in which these two can conflict, but I can tell you that this is a fixed cost business, and every extra visitor is therefore a treasure, financially.  Why wouldn’t a profit-making venture care about the visitor experience?  People say this kind of thing all the time in privatization discussions without even thinking about it.  Let’s fill in some other names:  McDonald’s emphasizes the bottom line over the visitor experience; Wal-Mart emphasizes the bottom line over the visitor experience; Marriott emphasizes the bottom line over the visitor experience.  Do any of these statements make sense?  In every service business I have ever heard of, the Venn diagrams of “Improves bottom line” and “Enhances visitor experience” overlap a LOT.

Some privately managed federal concessions have multiple year long waiting lists and exorbitant rates. This shift would put our parks out of reach for lower income families.

What is he talking about?   The only thing that fits this description is some of the National Park lodges.  There are waiting lists, I suppose,  because the private concessionaire is doing such a bad job and is so unconcerned over the visitor experience that they are flooded with demand (lol).  The waiting lists at these lodges are because the National Park Service will not allow expansion of the lodges (they are rightly concerned with the character of the park) and will not allow the rates to go up.  As a result, any economics book will tell you that there will be waiting lists.  In effect, the waiting lists are a result of the federal authority worrying about exactly the kinds of things  (park character and fees) that Mr. Tittle wants them to worry about.  And besides, it is totally disingenuous for the author to hint at these examples and then somehow imply that they are in any way analogous to entrance fees at state parks.  As he himself says, managing a concession within a park is totally different than operating the entire park.

Privatization in other states and at the federal level has led to increased entrance fees for camping, cabin rentals and swimming.

Incorrect.   Totally.  Privatization has led to a reduction in the cost of operation of these parks, and thus has reduced pressure on fees.  The US Forest Service, which uses a lot of concessionaires to run whole recreation areas, used to subsidize recreation fees with timber revenue.  When, through the efforts of organizations like the Sierra Club, these timber sales went away, Congress refused to fill in the gap in recreation funding and thus the USFS was forced to cease subsidizing user fees.  Had the USFS not relied on more efficient private operators, fees would have gone up more and many USFS facilities would have closed.

Because private companies can operate much more inexpensively, our rates are often lower.  In Arizona, Arizona State Parks charges $20 in the summer per car at Slide Rock State Park.  Next door at Grasshopper point, a similar day use area in the US Forest Service, we charge $8 per car.  In California, California State Parks charges $30 for a camp site with no utilities.  In the public campgrounds we operate in California, we charge no camping fee for a similar site higher than $18.   When California State Parks recently raised camping rates, they demanded that we raise the rates proportionately on the cabins we operate in one state park — we refused.  In New Jersey, Island Beach State Park charges $20 per night for no-hookup camping.  With only one or two exceptions, none of our no-hookup camp sites rent for more than $18 a night.  New Jersey typically charges $5-$10 per car for day use visits.  Across the country, we charge between $5 and $8.

There is pretty much nothing in this criticism that is not addressed in my FAQ on public private recreation partnerships, so I refer you there for more information.