The Economic Impact of State Parks, Forests and Natural Resources under the Management of...
Consumer surpluses (quality of life benefits) in addition to their expenditures suggest that, in recent years, visitors to Connecticut Department of Environmental Protection managed venues derived more than $1.25 billion dollars in annual benefits.
Gunther, Peter et al. (2011). The Economic Impact of State Parks, Forests and Natural Resources under the Management of Department of Environmental Protection. Storrs, Connecticut: Connecticut Center for Economic Analysis, University of Connecticut.
This report documents the Connecticut Center for Economic Analysis (CCEA) analysis of the economic impact of parks, forests, and outdoor recreation licensing operations of the Connecticut Department of Environmental Protection (DEP). This research investigated general tourism as well as specific key activities such as camping, angling, hunting, swimming, recreational marine, education, and accommodation activities at the Harkness Memorial State Park. Aside from attendance data, this study does not cover other related activities such as hiking, bird watching, biking, horse-back riding, etc. DEP collects entrance and various activity fees at 32 parks; it records the number of park visitors at 43 sites out of the 107 parks and 32 Connecticut state forests under its management.
In establishing the net benefits of DEP services, CCEA estimated the total number of visitor days, the value that these visitors placed on various key activities net of fees paid (measured as consumer surplus), the value adjacent property owners derived from their location, and the aggregate expenditures inclusive of direct, indirect and induced expenditures and employment that result from these activities. These benefits are then aggregated into annual estimated benefits derived from DEP managed state venues.
The parks and state forests that the Department of Environmental Protection (DEP) manages deliver significant economic benefit to Connecticut residents and park visitors. In 2010, resident and nonresident visitors to Connecticut’s 107 State Parks and 32 Forests spent 8.5 million visitor-days touring within the state. Of those days, at least 4.6 million days were spent partially at for-fee parks and forests managed by DEP. DEP activities generate the following direct and indirect economic impacts:
- 8.8 thousand jobs currently, that in the absence of DEP managed parks and forests and activities would be reduced to 6.7 thousand in 2020 as personnel found alternative employment;
- $343 million in personal income growing in current dollars to $595 million in 2020; $253 in personal disposable income, that generates choices for citizens, increasing to $471 million by 2020; and,
- Net present value in state revenues over expenditures of $30 million in constant dollars.
In addition, owners of single residences in Connecticut derived amenity values of $270 million annually from overlooking DEP managed venues.
Both the economic impact of expenditures and the economic value people derive from the parks, vastly exceeds the annual cost to the state of husbanding nature’s assets for Connecticut citizens and out-of-state visitors.
In 2010 visitors to these venues spent an estimated $544 million in general tourism activities in Connecticut. In addition, 189,000 sportspersons, holding 293,600 licenses and permits issued by DEP, spent additional funds to pursue their specific sporting activities:
- $264 million for angling, of which 90% came from Connecticut residents;
- $100 million for hunting, of which $95.1 million came from Connecticut residents;
- $36.8 million for recreational boating, attributed to DEP-managed boat launches and training activities, net of anglers’ boating expenditures;
- $26.2 million for skiing and attending educational and other venues;
Visitor fees at the parks and forests, including late day visitors, were in the $3.0 to $3.3 million dollar range from 2005 to 2009. Increasing rates in 2010 set the stage for an increase to $5.2 million in future years. These same visitors are estimated to have spent $94 million in Connecticut. DEP charges visitors: entrance, parking, and camping fees, cabin and pavilion rents, ice and firewood sales and related sales taxes. These revenues all flow to Connecticut’s General Fund.
Recreational activities also generated licensing and permit fees as well as training and educational revenues. 2010 revenues generated from DEP licensing and permitting of key activities included angling ($3.8 million), hunting ($2.3 million), and combined hunting and angling licenses ($1.6 million). Recreational boat training, testing, and licensing generated a further ($3.2 million.)2. Including camping and all activity fees, DEP collected $18.3 million from fees paid by participants and attracted $5.4 million in federal transfers from the federal Sport Fish Restoration (SFR) and Wildlife Restoration (WR) programs. These direct revenues indicate that Connecticut residents, nonresidents and the Federal Government valued DEP managed state venues.
Before taking account of a one-time $1.1 million credit program to assist adjusting to the higher fees, direct revenues and transfers in 2010 covered all but $2.6 million of Connecticut state expenses of $26.3 million including parks, forest, and hatchery operations. Property taxes stemming from vistas dependent on DEP managed venues added a $4.2 million to state revenues, more than sufficient to cover DEP operating and capital expenditures. In addition, indirect revenues from other taxable tourist and sporting expenditures further contributed to state revenues.
The well known downward slope of demand curves for each activity implies that all but the least enthusiastic person undertaking each activity derives quality of life benefits over and above expenses incurred, what economists refer to as “Consumer surplus”. CCEA has estimated consumer surpluses accruing to Connecticut citizens by major activities:
- Camping (S124.1 million)
- Hunting ($17.8 million)
- Inland Angling ($67.4 million)
- Marine Angling ($36.9 million)
- Swimming at four parks ($570,000).
In addition to the $246.9 million accruing to residents in consumer surplus, out-of-state visitors undertaking these activities derived a further $25.1 million in consumer surplus, led by campers at $18.4 million. Total estimated consumer surplus for campers at DEP venues is 26% of Connecticut tourism expenditures made by them. In-state estimates of consumer surplus remain modest due to the close proximity of venues to the population.
Connecticut residents overlooking the parks from single family dwellings realized annual amenity benefits most days of the year of a further $258 to $309 million. Positive attributes of these residences, captured in the assessed value of their properties, generated $3.1 to $5.4 million annually in government revenues. (pp 2-3)