Policy Analysis No. 726

Improving Incentives for Federal Land Managers: The Case for Recreation Fees

In 2004, Congress allowed federal land managers to charge recreation fees only for certain kinds of recreation. In general, while national parks and wildlife refuges can charge entry fees, managers of other federal lands can only charge for developed recreation, such as campgrounds, not dispersed recreation, such as hiking and backpacking. As a result, recreation is free on 98 percent or more of the lands managed by the Forest Service, Bureau of Land Management, and Bureau of Reclamation. The 2004 law expires in 2014, giving Congress an opportunity to revisit this restriction.

Congress should allow federal land agencies to charge market rates for all forms of recreation. Fees can help pay for maintenance and improvements of recreation areas, and will create incentives for both recreation users and recreation providers. Without these incentives, agency managers have little reason to cater to the needs and preferences of dispersed recreationists.

Incentives will also help land managers resolve conflicts over land uses. Off-road vehicles, for example, are not compatible with wilderness hiking. Fees that determine actual market values will help land managers reduce these conflicts by setting aside an appropriate amount of land for each use.

Unlike users of developed recreation, dispersed recreationists prefer experiences of solitude and are willing to pay extra to enjoy such solitude. That means this type of recreation comes closest to being a proxy for ecological health. Supporters of long-term ecological health should support dispersed recreation fees in order to give land managers an incentive to protect ecosystems.

Particularly in the West, federal lands are such a dominant presence that they heavily influence the market price for recreation and other resources. By giving away dispersed recreation, the federal government reduces to nearly zero the value of such recreation to private landowners. Charging fees will encourage private landowners to collect fees as well, leading to increased recreation opportunities for everyone.

However, if the land agencies are allowed to keep 100 percent of the fees as well as appropriations for recreation, they will have an incentive to overproduce, and so will lose money on recreation. To avoid this, Congress should allow the agencies to keep just half the revenues they collect, while the other half should be returned to the Treasury to compensate for appropriations out of tax dollars spent on the federal lands.

Randal O’Toole is a senior fellow with the Cato Institute and author of American Nightmare: How Government Undermines the Dream of Homeownership.