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The Increasing Use of Fee Revenue

Fee revenue from things such as picnic shelters dont always go back to the parks agency.

Fee revenue from things such as picnic shelters don't always go back to parks.

The New York Times just ran a story about the increasing use of fees to gain revenue by local governments, ranging from trade licenses to public parks. This issue has been around for a while. As government has devolved down to the local level, these budgets have found themselves strained in the last twenty years. In 1998, TPL published a booklet on the park agencies and fees (written by Peter Harnik). Though a bit dated, the issues are generally the same. Here’s an excerpt:

“The reality is that city budgets are being asked to cover more and more services,” says urban analyst Alexander Garvin, a writer, architect, developer and member of the New York City Planning Commission. “Government has taken a larger and larger role in our lives–from hospital services to welfare, a lot of things that government didn’t pay for earlier. Park Departments are in competition with items that weren’t there before. Our competitors are able to say, ‘But we already have parks!’ They don’t think about the need to keep them up, rehabilitate them or make repairs.

In many cases, park agencies are left charging more for activities and services but receiving none of the revenue they generate. In cities with independent park agencies, such as Minneapolis and Chicago, fees go back into the agency. But in others, they can go to the general fund without certain rules in place. Again from the book:

There’s one big caveat about fees. Many cities have a law or even a city charter requirement that all fees charged by a city agency are allocated to the general fund, not to the specific agency making the charge (much less to the specific park or recreation activity). While this is probably good public policy (since many agencies have no ability to charge fees at all), it severely reduces the incentive of a park agency to charge fees or of a park user to be willing to pay them.

Thus, for fees to have maximum advantage, park directors should attempt to reach an understanding with their mayors and their city councils that the agency will get credit for the revenue it generates (ideally, full credit). Even if the fees technically go into the General Fund, it can be widely publicized that the agency tracks the revenue and receives it back in its budget allocation (along with the normal taxpayer-based allowance). Being able to show the public that fees result in better maintenance of park facilities will go a long way to mitigating any unhappiness about paying.

So,  if fees are going to be raised or instituted, the idea is that they should help support the agency. More fees and shrinking budgets can be a bad combination for any park and recreation agency.

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