Problems in Paradise: Following the Money

Table of Contents


Are Americans loving the parks to death? This is the question most often asked by popular accounts of park problems. Indeed, park visitation has doubled in the past twenty years. Yet its rate of growth has slowed considerably from previous decades, when it was doubling as quickly as every five years. Today, visitor congestion is a serious problem in a few areas of a few parks, such as Yosemite Valley and the South Rim of the Grand Canyon. Yet the vast majority of parklands still receive far fewer visitors than they could support.

The real problems in the parks are more subtle. The first is what former Park Service director James Ridenour calls park barrel--the creation of new, and often expensive, parks that serve more as local economic development projects than as parks that are truly of national significance.

This leads naturally to the second problem: park funding. Kansas City Star writers Jake Thompson and Jeff Taylor refer to the Park Service as the National Pork Service because Congressional funding emphasizes those activities that provide the greatest political return, such as new construction, and neglects less visible activities, such as maintenance and operations.

Park barrel parks and pork funding are indirectly responsible for many of the ecological problems that face the national parks. Many of the great Western parks, including Bryce Canyon, Grand Teton, Lassen, Mount Rainier, Rocky Mountain, Yellowstone, and Yosemite, have each lost one to seven major mammalian species since their founding. Alston Chase is only one of many critics who claim that Park Service policies are responsible for ecological decline--and those policies are responsive to Congressional funding.

Another source of problems in the larger parks relates to concessionaires (or, in Park Service terminology, concessioners). Critics charge that the concessioners' political power promotes park overuse and interferes with sound ecosystem management. This chapter discusses the financial problems in detail, while the next chapter focuses on ecological problems and threats to the parks.

What Makes a Park?

Keeweenaw Peninsula, in upper Michigan, was one of the main copper-pro-
ducing regions in the U.S. When the mines played out, unemployment increased and wages fell, but a few people turned old mining buildings into museums. To bring in more tourist dollars, they convinced Congress to create the Keeweenaw Historical Park in 1992. Now local residents are eagerly hoping for millions in federal subsidies to restore mining ruins and build visitors facilities.

Charles Pinckney was a South Carolinian who helped write the U.S. Constitution. When an old house on his former farm was threatened by a housing development, historic preservationists asked Congress to create the Charles Pinckney Historic Site. It turned out that the house wasn't built until after Pinckney died, yet the Park Service is spending millions to buy and restore it.

Just three new parks--Steamtown, America's Industrial Heritage Project, and the Presidio--will cost taxpayers well over half a billion dollars to restore and close to $50 million per year to operate. Meanwhile, older parks like Yellowstone and Yosemite are critically short of funds for maintenance and ecosystem management.

Should a house that Eugene O'Neill lived in for just seven years be enshrined as a national historic site? Should a collection of mostly Canadian steam locomotives be managed at great expense by the Park Service? Should every fossil bed, fort, and former home of poets, playwrights, and presidents be immortalized by the Park Service? What does it take to make a particular area so special that it should be managed by the National Park Service as opposed to another government agency or by private owners?

Questions like these have plagued national park leaders and advocates ever since the Park Service was founded nearly 80 years ago. The simplest answer is that "a national park is whatever Congress says is a national park." But many Park Service leaders, from Stephen Mather to James Ridenour, have been unwilling to accept this answer. Mather worried that "low-grade" parks would set a precedent for reducing the quality of existing parks. Creating a park that had a dam in it might justify damming the Grand Canyon. Creating a park that was heavily clearcut might justify clearcutting Yosemite. So early park advocates believed that parks should be limited to the most spectacular and pristine areas.

On this basis, Mather opposed many proposals for national parks--including parks at Lake Tahoe, Wasatch in Utah, Big Horn in Wyoming, Sawtooth in Idaho, and a Cascades park in Oregon and Washington that would cover Mt. Hood, Mt. St. Helens, Mt. Adams, and other Cascades peaks. Mather also kept parks out of the system that were added after his death, including Grand Coulee, the North Dakota badlands, Washington's Lake Chelan, and the Indiana sand dunes.

In proposing such parks, members of Congress often hoped that the magic words "national park" would help stimulate local economies. If nothing else, the placement of rangers and visitors facilities would bring federal funds into the areas. Mather saw the political benefits of spreading parks across the nation, but was unwilling to degrade the system with substandard parks. Instead, he promoted state park status for areas that deserved protection but were not nationally significant.

Predictably, the agency's strict adherence to an ideal of national parks did not outlast its first director. Horace Albright supported Mather while the latter was director, and after Albright took over he convinced President Coolidge to veto a proposed Ouachita National Park and then got "rid of" Sully's Hill Park, which was a square mile of North Dakota prairie. Yet he soon advocated rapid expansion of the park system using new designations such as "historic site." (Ironically, but predictably, when Albright went into private business he became an opponent of big government and protested the increasing bureaucracy of the Park Service.)

The next step was taken by Arno Cammerer, who felt comfortable with dams in parks--provided that the parks were called "recreation areas." But the Dinosaur controversy showed the fallacy of this strategy: If it is okay to have a dam in a recreation area managed by the Park Service, then perhaps it is okay to have a dam in a national monument provided you rename the monument a recreation area.

The rapid growth in the number of parks under George Hartzog brought out a new problem that plagues park managers to this day: Too many parks dilute the Park Service's ability to adequately manage any of them--and the really special parks such as Yellowstone and Yosemite suffer along with the rest. Part of the reason for this is simple arithmetic: An agency managing upwards of 400 different sites just has to be more bureaucratic--and less effective--than one managing only the 32 sites that the Park Service had when it was created.

More importantly, Congress' pork barrel habits often lead it to divert funds that ought to go to protect fragile areas such as Glacier or Rocky Mountain to relatively inconsequential sites such as Steamtown or Harpers Ferry. Hartzog wanted a park in every state and, if possible, every congressional district so that every member of Congress would support park budgets. But, as the next section will show, this backfired because it gave the most powerful members of Congress an incentive to divert funds from the parks that needed them to the parks in their districts.

Hartzog's "take it warts and all" policy led such park officials as Russell Dickenson--who later became director--to openly wonder "about the quality, integrity, and merit of some" of the new areas. Dickenson's worst fears may have been realized with the last two parks created during the Hartzog era: Gateway and Golden Gate recreation areas. While the idea of "urban national parks" excited many, the reality has proven to be a major drain on the Park Service's budget.

In recent years, Congressional appropriators discovered a new way to make a national park: Simply spend enough money on it, and it becomes a park. West Virginia Senator Robert Byrd, who chaired the Senate Appropriations Committee, spent nearly $10 million on the "Wheeling National Heritage Area"--and then asked Congress to make it a unit of the National Park System. Representative Joseph McDade, the ranking Republican on the House Appropriations Committee, did this for Steamtown, and Representative John Murtha, a leading Democrat on the House Appropriations Committee, did it for the Industrial Heritage Project.

Stephen Mather's policy of promoting state park systems helped save many deserving areas. But by the 1970s it had an ironic effect on the National Park System. Since most state and local governments have to balance their budgets, local parks are vulnerable to budget crunches. When state or local parks run into trouble, members of Congress--who don't have to balance the federal budget--often come to the rescue by having the Park Service take over. The Park Service has thus become a dumping ground for local park agencies' white elephants. Steamtown, Gateway, and Eugene O'Neill's home are all examples of park dumping.

For this and other reasons, the new areas are often the most expensive--and sometimes the least used--parks in the system. With the Presidio, Golden Gate costs almost twice as much to operate as Yellowstone. Gateway is the fourth-most expensive park in the system and received far fewer visitor hours of use than the much larger Grand Canyon, Great Smoky Mountains, and Sequoia parks, which cost less to operate. Between them, the Golden Gate and Gateway cost 8 percent of the total operating funds available to the parks. Yet the parks make up little more than 0.1 percent of the acres of all national parks. With 5 percent of park visitor hours, they are heavily used--what city park isn't?--but the costs ought to be borne by the users, not federal taxpayers. Their expenses cut deeply into the funds available for Yellowstone, Yosemite, and other major parks.

Park Service officials remain ambivalent about expansions to their system. On one hand, park employees strongly believe in the parks that they work in. On the other hand, the agency's numerous studies of new park proposals usually conclude that a new national park isn't needed. Between 1980 and 1993, Congress added 33 new areas to the National Park System, only 13 of which were supported by the Park Service. Of course, President Reagan's administration might be expected to oppose new parks. Yet Russell Dickenson, who was President Carter's choice for director, and James Ridenour, President Bush's director, were far more vocal about the dangers of substandard parks than Reagan's choice, William Penn Mott.

Paying for the Parks 1: Appropriations

Between 1987 and 1990, Park Service staff increased by nearly 1,000 full-time
equivalent employees. Yet the number of rangers available to manage and protect parks declined by nearly 25 percent. Meanwhile, Representative Joseph McDade was diverting $8 million per year of Park Service funds to Steamtown--a site that Congress had not even approved to be a unit of the Park System. This $8 million alone could have paid for one-fourth of the lost rangers.

The Park Service maintains a park construction priority list. Buildings in Yosemite need a new electrical system to protect visitors from electrocution and fire. Without a new sprinkler system, park officials say, a fire could destroy Independence Hall in thirty minutes. Members of Congress, and in particular members of appropriations committees, routinely ignore these priorities by bumping home district projects up the list. Senator Dale Bumpers, a member of the appropriations committee, made sure that the Park Service spent $12 million restoring a row of abandoned bathhouses in Hot Springs Park. This was only 110 on the Park Service priority list; sixty items that were ahead of it on the list didn't get funded at all.

Recent additions to the park system such as the Presidio, Gateway, and America's Industrial Heritage Project cost hundreds of millions of dollars per year. While Park Service budgets have increased, the increases haven't kept up with the new expenses. As a result, after adjusting for inflation, recent operating budgets for major parks such as Glacier and Great Smoky Mountains have actually declined.

Historically, nearly all park funds have come from Congressional appropriations of tax dollars. Except during World War II, park appropriations have grown steadily from 1916 to 1976. Since 1976, however, concerns over inflation and federal deficits have led park budgets down a very rocky path. While the agency operating budgets increased every year from 1955 through 1977, they were cut (after inflation) in nearly one out of three years since 1977.

Today, the Park Service says these cuts have created problems in at least two major areas. First, the number of rangers available to understand and care for the parks has declined significantly, dropping by 25 percent between 1987 and 1990 alone. Second, the Park Service says it has a $3 billion maintenance backlog--and estimates that this backlog will double in just a few years. No wonder, since maintenance budgets fell (after inflation) in more than half of the past sixteen years.

Of course, park managers have always worried about funding. Before the Park Service, wrote Horace Albright, "Congress had always been stingy with the parks." The parks that received the most money were those that enjoyed "the influence of a powerful personage or pressure groups." Creation of the Park Service was supposed to eliminate pork barrel funding of some parks at the expense of others, but it didn't. At best, it substituted another problem. In the 1920s, Albright says, "congressional committees granted money to the Park Service on the basis of how many people were using the parks." This led park managers to encourage overcrowding as "the only way to get the financial help we desperately needed."

Overcrowding wasn't much of a problem in the 1920s. But when it did become a problem, in the 1970s, Congress continued to fund parks by the same old rules: pork barrel and visitation.

The Park Service's strategy of presenting budgets for each park didn't help. Unlike the Forest Service, which divides its budgets into scores of line items but doesn't present individual forest budgets to Congress, the Park Service has only a few line items but presents Congress with park-by-park budgets. Both methods created problems: For the forests, Congress emphasized the line items it likes best--mainly timber sales. For the parks, it emphasized the parks it likes best--mainly those in the states and districts of appropriations committee members. In recent years, this has been particularly evident in park construction funding.

When Congress set aside Hot Springs Park, most people believed that thermal baths would cure various diseases. By 1950, most doctors consider this to be quackery. Use of the bathhouses declined steadily since then, and seven out of eight were closed by 1980. By directing the Park Service to restore the bathhouses, Senator Bumpers turned a local liability into a tourist attraction--at federal taxpayers' expense. Perhaps the buildings merited restoration because of their historic value; but the Park Service believed that sixty other projects were more important.

In 1993 through 1995, Congress funded 58 different Park Service-requested construction projects--and pushed another 167 different projects to the top of the priority list. Some of the things that Congress spent park money on in recent years:

Meanwhile, parks like Yosemite and Yellowstone lack funds for basic maintenance and upkeep. Yosemite isn't getting $5 million to repair an electrical system that the Park Service said posed "severe safety" problems for visitors. In Yellowstone, 90 percent of the trails and 80 percent of the roads need repairs.

Congressional creation and spending on unwanted parks is only part of the problem, however. The majority of park construction and maintenance costs go for three things: visitors centers, employee housing, and roads. The Park Service seems to have some unwritten rules about these facilities:

Responding to Congress' preference for pork barrel construction, the Park Service spends lavishly on these facilities. A typical visitors center covers 7,500 square feet--as much as four three-bedroom houses. Before recent timber price increases, construction costs alone averaged $300 to $350 per square foot--three times the cost of normal office construction. When water, sewer, landscaping, parking lots, and furnishings were added total costs typically approached $8 million. The Park Service commonly plans such visitors centers for parks that receive fewer than 100,000 visitors per year.

Employee housing is also expensive. The Park Service has 4,700 housing units--bunkhouses, apartments, or individual homes--for employees in rural parks. Employees pay rent averaging about $200 per month, which is dedicated to maintenance. However, the rent fails to come close to covering all of the costs. As a result, the Park Service says that it needs well over $500 million to repair, rehabilitate, or replace existing housing--an average of well over $110,000 per unit.

Such housing might have been appropriate in 1916, when most parks were remote and transportation was slow. Today, however, nearly every park is located within a few minutes of a reasonably sized town whose residents would be glad to rent housing to Park Service employees, just as they do for employees of the Forest Service and Bureau of Land Management. Even where housing is unavailable elsewhere (meaning, for the most part, some of the Alaska parks), it shouldn't cost anywhere near as much as the Park Service spends--typically $125 to $225 per square foot. For example, a tiny (1,300 square foot) house in Arizona might cost $220,000. Compare that with the cost of your house--and remember that this doesn't include land or utility hookups.

As with the visitors centers, these are just basic construction costs before recent timber price increases. Yet the costs are more representative of the most expensive, custom-built homes than they are of typical American housing. Very few Americans, outside of Park Service employees, will ever live in housing costing (in 1980s prices) more than $50 or $60 per square foot.

One reason why costs are so high is that the Park Service typically adds up to 20 percent to all construction costs for planning, 15 percent for administration, and another 15 percent for overruns--meaning that as much as a third of park construction funds really go for overhead and overruns. The Park Service argues that park buildings are more costly because they must be designed to fit in with the environment. But this is just one more reason why park personnel should be housed in nearby towns rather than in the parks.

The last--and often the biggest--major construction expense is roads. Again, park costs are extremely high. For example, a park in New Mexico plans to spend $2.2 million for a 2.8 mile single-lane paved road with turnouts--nearly $800,000 per mile. A nearby national forest recently built a similar road for less than $250,000 per mile. Crowded parks like Yellowstone, Great Smoky Mountains, and Yosemite certainly need roads and visitors centers--though not, in many cases, employee housing. But such facilities are hardly needed in remote parks that receive few visitors--especially when the costs are as high as those paid by the Park Service.

Of course, the Park Service is not entirely at fault. In many cases, members of Congress created the parks with the specific intention of transferring federal dollars into their states or districts. Yet the Park Service goes along with the scheme, even to the point of including money in its proposed national budget for parks that it knows members of Congress want even though they haven't been created yet.

Paying for the Parks 2: User Fees

When the Park Service first began, Stephen Mather believed that park user fees would cover all park operations, once basic facilities were in place. Initially, the only user fees were concessioner royalties. Since nearly everyone who visited a park relied on a concessioner for food, lodging, and/or transportation, that was considered sufficient. Then people began driving cars, often bringing their own food and staying for just a day. In 1908, Mount Rainier Park began charging $6 per automobile--equal to about $100 today. By 1915, more than half the designated national parks were charging an automobile fee at rates calculated to pay for each park's road system: Yellowstone, which required the most roads, charged $10 ($140 in 1994 dollars), while Mesa Verde and Glacier charged only $2. Monuments remained free until 1939.

In 1917, Congress insisted on setting prices at a minimal and consistent $2 per car in every park--about $20 at today's prices, four times the current fee charged by most parks. Despite the reduction, by 1924 Crater Lake was reporting a profit and Mather confidently predicted that other parks would soon pay for themselves as well. But any thoughts of becoming self-sufficient disappeared around 1930. First, Mather suffered a severe stroke and retired. Second, the Depression, while not reducing the number of park visitors, stemmed the growth rate of visitation and almost certainly reduced visitors' willingness to pay to visit parks. Finally, with the Depression, Congress started giving the Park Service more money than ever before in job-creation programs, so managers became less dependent on user fees.

Land acquisition became a high Park Service priority in the early 1960s, so in 1964 Congress dedicated all park recreation fees to the Land and Water Conservation Fund. This had the unintended effect of eliminating any incentive park managers had to collect fees. When fee collections proved less than anticipated, Congress added offshore oil revenues to the land acquisition fund.

The Land and Water Conservation Fund quickly became highly politicized, with Congress deciding most land purchases. By 1981, the Park Service had begun to try to regain control of its user fees and the amount it could charge. Congress briefly allowed the agency to keep concessioners royalties in a fund for maintenance of visitors facilities, but rejected proposals regarding other fees.

Then, in 1987, Congress gingerly allowed certain parks to double their entrance fees and to keep a share of those fees. The public accepted the higher fees almost without complaint, but in 1988 Congress reneged on the deal, refusing to allow parks to keep fees. Congress also insisted that senior citizens should be allowed into all parks for free, despite Park Service surveys showing that the average senior using the parks was better off financially than other park users and that they didn't mind paying fees.

Today, the Park Service collects well under $100 million per year in user fees. About $40 million comes from entrance fees, and another $25 million comes from other recreation fees such as campground charges and tour bus fees. Concessions pay a combined total of less than $15 million.

Concessions fees could certainly be increased. The average concessioner pays a royalty of just 2.5 percent of gross sales, but where there are few barriers to entry concessioners pay as much as 12 percent. If all concessioners paid a 10 percent royalty, the Park Service would collect $45 million more each year.

But concessioners fees are a drop in the bucket compared to potential recreation fees. A 1993 U.S.D.I. Inspector General's audit found that, if parks charged everyone the legally authorized fees, they would collect well over $200 million per year--more than five times current entrance receipts.

The report revealed that, of the 194 parks authorized to charge entrance fees, nearly a third didn't bother and the rest failed to charge everyone who could be asked to pay, usually because the entrance stations weren't staffed during slow periods. (Imagine Safeway closing its check stands and letting people take food for free during "slow periods.") "Park Service's collection efforts," the Inspector General noted, "were hampered by a lack of incentive because fees collected were sent to the U.S. Treasury rather than returned to individual parks."

In response, Congress allowed parks to use 15 percent of recreation fees to assist in fee collection and similar duties. A complicated formula distributes a share of these fees to parks that collect no fees, so parks collecting fees still get to keep only a small percentage of their total receipts.

Entrance fees may not always be the best or only way to collect recreation receipts, since they don't vary by the part of the park visited, the time spent in the park, or the activity. People willingly pay more for Häagen-Daz than for ice milk; why shouldn't they pay more for Yosemite Valley than for Death Valley? The total recreation fees collected could be vastly increased if:

It seems fair to conclude that total collections could be several times greater than they are today. How much greater? The Park Service hasn't studied the market value of park recreation. But Forest Service studies of the value of national forest recreation estimate an average price of nearly $14 per visitor day. This doesn't count hunting and fishing values, which tend to be higher, or "consumer surplus," which is the amount some users might be willing to pay above market value. Recreation values in many national parks must be at least as high as in national forests.

In 1993, the Park Service estimated that recreationists spent 114 million visitor days in the national parks. At $14 per day, the market value of this recreation is well over $1.5 billion per year--nearly twenty times last year's total receipts. Forest Service estimates may be too high, but $6 per visitor day seems reasonable--and that represents nearly $700 million in annual user fees.

The idea of collecting fair market value in user fees is controversial within the Park Service. "People in the parks see themselves as providing a service," says one park planner, "and they don't want that service `tainted' by user fees." Yet growing concerns about maintenance backlogs and personnel cuts are reducing the resistance to higher fees.

Actually, the Park Service has laid the groundwork for a major program of increasing user fees as well as public donations and "partnerships" with business. During the 1980s, when the Reagan administration was cutting budgets and pressing Congress to increase user fees, the Park Service prepared a detailed series of manuals with such titles as:

Some of these publications are used in training workshops for park personnel. Others are distributed to state agencies suffering from similar budget crunches. To date, however, the Park Service hasn't had either the freedom or the incentive to get serious about fee collection and fundraising. That will change only when Congress stops seeing parks as pork.

Planning the Parks

Early in 1995, the Park Service was in the news concerning the Martin Luther King, Jr., Historic Site. The King family still owns King's boyhood home, and the Park Service has been paying the family $500,000 per year to allow people in at no charge. With the park receiving three-quarters of a million visitors per year, the family decided it could collect more than that from fees. Relations between the park and the family have deteriorated. While fees were the catalyst, the real problem is that the Park Service and the family have two very different visions of how the park ought to be managed.

The King story is typical of a pattern dating back to at least 1915: Local activists convince Congress to create a park. The Park Service takes over and starts doing things that are different from what activists anticipated. Activists get mad. The controversy often continues until the activists move away or die.

Rocky Mountain Park started this way. Enos Mills, the man most responsible for the establishment of the park, hated the Forest Service, which was why he wanted the land taken from the Arapaho Forest and given to the Park Service. But when Stephen Mather refused to give Mills a concession in the park--since satisfactory concessioners already existed--Mills decided to hate the Park Service too, inspiring a number of newspapers to write editorials critical of Mather's policies. The dispute ended only when Mills died.

But such debates are common, particularly in the newer parks (where the original advocates are still alive), and they aren't always so commercial as Mills. The Eugene O'Neill Historic Site was originally managed as an art center by the Eugene O'Neill Foundation. When their finances proved inadequate, they convinced Congress to have the Park Service take over but let the foundation maintain its artistic programs. But the park is focusing on the sites historical value as O'Neill's former home and wants to restore the site to the way it was when O'Neill lived there. This means reducing the facilities available for foundation programs. Park planners were unswayed by foundation protests.

Kaloko-Honokohau Historical Park was an ancient Hawaiian village that local residents wanted preserved for its cultural values. Congress funded Park Service purchase of the village, which the agency wants to recreate as a static display. But the residents expected that the park would let them live there to demonstrate native lifestyles to visitors. While the dispute works its way through the courts, the residents have physically prevented park employees from entering parts of the park.

Like the Forest Service and other agencies, the Park Service has a planning process that supposedly settles disputes like these. But park planning is even more rigid and centralized than that of the Forest Service. Most park plans, for example, are written by the Denver Service Center, not by the parks. The few exceptions are written by the regional offices. Some parks complain that even they have little control over the plans.

The Blue Ridge Parkway, for example, says that the Denver Service Center gave it a draft plan with three alternatives. "They told us to pick one," says park superintendent Gary Everhardt. "We told them we liked some parts of alternative B and some of alternative C. They told us we couldn't combine them; we had to pick either B or C." Everhardt simply rejected the plan and no final was ever produced. As a former director of the Park Service, he might have been able to get away with that where other superintendents would simply have to settle for B or C.

Different Drummer's review of scores of park plans indicates that the main goal of Park Service planning is not dispute resolution but fund raising. The only significant decisions made by the plans are the size of the visitors centers, the number of miles of road to be built, and where the employee housing will go. These decisions are then funneled into the priority system for park construction dollars. The Park Service's planning budget averages $36 million per year--more than three-fourths of which goes into construction planning.

This suggests that the Park Service has not suffered enough disputes to consider them a serious problem. But it also suggests that people who advocate the creation of new parks may be surprised and disappointed if they get their wish.


The Park Service has about 1,550 agreements with about 500 businesses cover-
ing operations in the national parks. These businesses, traditionally called concessioners, include hotels, restaurants, stores, tour guides, outfitters, and many other services. Concessioners are required to meet stringent standards set by the Park Service and by the Concessions Policy Act of 1965. Nearly all agreements require the concessioner to pay a percentage of gross receipts to the Park Service. This percentage ranges from 3/4 percent to 12 percent and averages about 2.5 percent. In 1989, gross annual sales of all national park concessioners totalled more than half a billion dollars, of which the Park Service collected $13.2 million.

The role of commercial interest has been a quandary for park managers ever since the parks were conceived. Almost as soon as Congress set aside Hot Springs in 1832, commercial interests began putting up bathhouses and touted the supposed medicinal values of the waters. Eventually, Congress directed that a free bathhouse be erected for the poor. Similarly, as soon as Yosemite was set aside as a state park, people staked claims in the valley on which they proposed to build hotels. Their claims were denied, but the hotels were built anyway. Commercialization took a bit longer in Yellowstone, mainly because the region was so remote. But by 1915, the park had a chain of hotels, three stage coach lines, several private camping companies, and several other concessioners.

Stephen Mather believed that so many businesses led to inefficient competition. Not only did the various companies duplicate efforts, their high-pressure sales tactics sometimes verged on fraud. As a remedy, Mather wanted a monopoly regulated by the Park Service to keep prices fair. To obtain that monopoly, he forced concessioners to merge or simply shut down lower quality operations. In the New Deal years, the Park Service tried to oust private businesses from the parks altogether. With the support of Interior Secretary Harold Ickes, Newton Drury and Arthur Demaray set up National Park Concessions, Inc., a nonprofit corporation controlled by the Park Service, to take over all park concessions. Members of Congress objected to shutting down existing businesses, so National Park Concessions ended up handling some of the more marginal park concessions, such as those at Olympic, Isle Royale, and Big Bend.

Today, controversy over concession operations revolves around two points. First, some claim that concessioners have a stranglehold on park policies. They point to the firing of Park Service director William Whalen, during the Carter presidency, as an example. Second, people have raised concerns about the negligible amounts paid by most concessioners to the U.S. Treasury. A few concessioners pay as much as 10 percent of their gross receipts to the Park Service, but the average is only 2.5 percent and a few are as low as 3/4 percent. By comparison, concessions fees at the Smithsonian are 15 percent of gross revenues.

An examination of the Park Service's budget explains these problems. Except during a few years in the mid-1980s, Congress has not allowed the Park Service to keep any concession receipts. This has given the agency a curious, but predictable, attitude toward concessioner contracts. Instead of negotiating for high dollar returns, the Park Service deliberately keeps returns low and instead gets concessioners to agree to perform in-kind services, such as construction or maintenance of facilities.

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