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|Take a Hike|
|Published Monday, July 21, 2014|
Developers invest millions in making business parks around NH attractive to employers, yet the state park system is woefully underfunded despite being a main driver of NH's economy. An estimated six million people visit state parks annually, with about a 50-50 split between in-state and out-of-state visitors, according to Plymouth State University’s Institute for NH Studies. But the parks they visit need millions in capital improvements to address leaky roofs and failed septic systems, among other problems.
With summer vacation around the corner, it’s time people think about a policy rarely discussed: how we fund our state parks and the effect they could and do have on our economy. The emphasis should be on the word “our,” because we all own those resources and explore them in our own way whether it’s camping, picnicking, hiking or just meditating at a scenic overlook.
Surveying the View
The state’s Division of Parks and Recreation, part of the NH Department of Resources and Economic Development (DRED), oversees 92 properties covering 12,000 acres. The system includes two ski areas and 7,000 miles of snowmobile trails. But that’s not half the story: The State’s Division of Forests and Lands, also under DRED, oversees another 384,000 acres of our land where people walk, snowmobile, hunt and fish.
The big picture is clear: Visitor spending, supported in part by these state-owned facilities, is a big chunk of the state’s economy. The Institute of NH Studies estimates that in FY 2012, recreational and business visitors accounted for $13.8 billion of the state’s economy. This spending supported an estimated 68,000 full- and part-time jobs in the state—10 percent of NH’s job base. Moreover, the effect on the state budget is significant, amounting to $390 million in state revenue annually from fees and taxes.
Better Stewardship Needed
Despite best efforts, upkeep on the state park system’s facilities is slipping. The system’s 10-year strategic plan, published in 2010, notes $28.5 million in deferred maintenance, $71 million needed to replace and redevelop facilities and $1.7 million needed in capital improvements to stabilize facilities in desperate need of attention. Some needs have since been met, but we’re talking about obsolete bath houses, rotting sills, and aging equipment that takes a lot of maintenance and repairs to keep it going.
The state’s park system is the only self-funded system nationally, required to fund all operating costs from user fees. The state does provide capital improvement funds, including the recent purchase and re-opening of the Mittersill Ski Area and the reconstruction of the Hampton Beach Pavilion.
Investing Pays Off
Many would argue the Parks Division should be spun out of DRED, whose primary role is supporting more conventional economic development activities. However, these facilities are an important facet of the fading NH Advantage. Where improvements were made, there is proof that the state parks are an economic engine.
When the $14 million project to rebuild the Hampton Beach Pavilion was proposed, economist Larry Goss anticipated NH would get its investment back within five years in the form of rooms and meals tax revenues, turnpike tolls and business profits taxes. That may have been too conservative. New condos approaching $500,000 each are replacing outdated motels. Owners of older lodging are finding it pays to upgrade and reinvest. All this activity is happening during one of the state’s steepest real estate downturns. One developer I spoke to was clear the state’s investment in Hampton contributed to his decision to move forward with several multimillion dollar ventures. Common sense says it’s no coincidence this reinvestment is coming on the heels of the state’s Pavilion project.
Investing in our recreation resources pays off. Visitors gather their impression of our state from the quality (or lack thereof) of these resources. Moreover, the lodging, recreation and food service sectors are among our fastest growing jobs. The wages are low, but in this economy, a job is a job.
New Hampshire shouldn't be penny wise and pound foolish when it comes to this legacy park system. Prudently maintaining our park system pays off in increased state revenue and higher private investment.
Business and industrial parks are not the only parks that contribute to economic development—our state parks do too. Besides, when was the last time you recreated at a business park? The state’s parks are good for the soul as well as the pocketbook.
Russ Thibeault is president of Applied Economic Research, an economic and real estate consulting firm he founded in Laconia in 1976. He can be reached at 603-524-1484.
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