Kentucky’s state parks are losing money, even though the state has spent millions on improvements over the past several years. That conclusion of a state audit two years ago was confirmed by a more recent consultant’s study, making it clear that Kentucky needs to change the way it does business where state parks are concerned.
Key findings of the 2008 audit of park operations from 2000 to 2007, available at auditor.ky.gov/Public/ Audit_Reports/Archive/2008ParksAnalysisReport-PR.htm, included the following:
• Since a major bond issue in 1995, $316 million has been spent on expanding and renovating park facilities.
• Despite the improvements, operating losses increased by 14 percent, prompting the parks to seek additional state funding of $5 million.
• Occupancy rates at state lodges, the number of meals served and the rounds of golf played all declined.
A more recent review by PROS Consulting that was released earlier this year confirmed these findings. Although Kentucky’s parks generate the third-highest amount of revenue in the nation ($53 million, behind California and New York), the revenue only covers about two-thirds of the costs of operating the system.
The consultant’s study, in recommending that the parks reduce expenses and improve quality to remain viable, pointed out that the state subsidizes the cost of the average park meal by about $2. That means, essentially, that the parks are spending more to prepare a meal than they charge for it.
Clearly, this is not a sustainable business model.
To stave off additional losses, the state recently announced that the parks will be closed Sunday through Tuesday during the winter, that some fees will be increased and that seasonal workers will be hired through employment agencies.
From our perspective, a more promising development is the proposal by the Beshear administration to turn food service and golf operations over to private companies and to allow alcohol sales in selected parks that are in wet precincts, such as Lake Barkley, General Butler and Jenny Wiley.
The Kentucky Chamber supports this proposal and has been a long-time advocate of allowing the sale of alcoholic beverages in park restaurants to increase the parks’ ability to attract conventions and other meetings.
This would be a good first step, but we encourage state officials to go further and develop a pilot project involving the full operation of a state resort lodge by a private hotel or resort company. Private-sector companies know how to keep costs below expenses while ensuring a high quality of service.
This idea was one of the first collected by the chamber’s New Agenda project, an initiative that invited Kentuckians to share their suggestions for ways to improve the state.
The chamber also has addressed the need for the state to find smarter and more efficient ways to spend taxpayers’ money in its Leaky Bucket report. This new approach to operating state parks offers great promise for doing just that.
It has often been said that Kentucky has the finest park system in the nation. Without question, the natural beauty of the parks is unsurpassed. But their trend of spending more than they take in cannot continue. Failing to address the issue with creative solutions now will lead to a decline in quality and, potentially, access to the parks for Kentuckians and visitors from outside our commonwealth.