Three Federal Issues Impacting the Campground Industry in 2011

dg photo 1 12 30 2010

As the economy appears to be on a strong road to recovery, one would hope that the economic outlook for American business in general and the park industry in particular would mirror the upturn in the overall economic picture. Although the park industry has weathered the financial storms in pretty good shape, our brothers in the RV manufacturing and dealership side of the industry have not done nearly as well and a turn around in those sectors is certainly critical to the future of the park business. Signs of recovery of RV sales appear positive as the recent shipment numbers indicate and most importantly, as the attendance and interest in RVing at the early 2011 RV shows indicates.

With the good economic news, it would be easy to overlook some of the challenges that will face the industry as a new Congress and a re-focused Administration head into 2011. Here are a few of the challenges that the park industry will confront in the months ahead.

Repeal of the Form 1099 Legislation

As most know, the health care legislation passed in 2010 contained an extraordinary provision requiring business to send 1099 forms to every vendor or supplier with whom they did more than $600 in business. The burden that this requirement places on business is extreme and the small business community has made this a priority issue for 2011. The provision is slated to go into effect on January 1, 2012 so repeal this year is critical.

The campaign to repeal the “Form 1099” expansion has begun and there are high hopes that the new Congress will act swiftly to repeal the bill. In the House, Representative Dan Lungren (R-CA) has introduced H.R. 4, the Small Business Paperwork Mandate Elimination Act of 2011, legislation to repeal the expanded tax information reporting requirement established by the health care reform law. He has 245 co-sponsors.

The expansion provision was inserted into the health care reform legislation, even though it has nothing to do with health care, as a revenue offset. The last Congress was required to “pay for” any increase in spending or reduction in tax revenues with offsetting decreases in spending or revenue increases elsewhere. The Form 1099 provision, which refers to the Internal Revenue Service (IRS) form number, was projected to raise $17 billion. With increased attention to the health care reform issue and the House vote to repeal that legislation, there may be sufficient support to repeal this provision.

This issue is a high priority. RV park and campground owners are encouraged to write to their Members of Congress and senators urging repeal of the 1099 requirements.

Health Care

Although the House has voted to repeal the 2010 health care reform legislation, there’s little chance that the Senate will support that repeal. However, there’s a good chance that there may be some modifications to the legislation.

From the perspective of the RV park and campground businesses, there are a few elements that are critically important to park owners.

First, preserving the prohibition against discriminating in providing health insurance based on pre-existing conditions is a top priority. As many park owners, operators and employees come to the industry from other careers or from large corporations where they’ve worked for many years, changing to business ownership can make obtaining health insurance difficult and the issue is often compounded when one of the spouses or children has a pre-existing condition. Retaining the prohibition against discrimination based on that, is a key element.

Second, affordable health insurance available to all is a second key priority. Controlling health insurance premiums and making affordable coverage available to all is another key element to be preserved. Everyone who wants and needs health insurance should be able to secure it.

Third, permitting associations and groups to work together to offer health care to members is another key for the future. While ARVC may not be big enough to have its own program, the association should be permitted to work cooperatively with other trade associations to bring its members quality affordable health care.

Highway Legislation

As a road-based recreational activity, RVers and campers rely on the ability to travel safely and efficiently on the nation’s highways, bridges and tunnels. This includes travel in urban, suburban and rural areas and on interstate highways, scenic roads, and state and county roads. Passage of a new federal highway program during this session of Congress is critically important.

A very important sidelight to funding the federal highway program is maintaining the Highway Trust Fund, funded through the federal gasoline tax, as the source of funds for this important program. With more efficient vehicles, with Americans traveling shorter distances and with the growth of public transportation systems, the current gasoline tax does not provide sufficient funds for the Trust Fund. The issue of raising the federal gas tax by a penny or more at a time when gas prices are rising and unstable may further impact on road travel. The park industry will need to reach some conclusion on where it stands on the gas tax.

In dealing with the highway legislation, there is always tension between various highway users – truckers, commuters, recreational travelers, business travelers, emergency vehicles, intercity and tour busses, motorcyclists, and bicyclists all want a piece of the pie. Further complicating the issue is the question of population growth, shifting populations and changing road and highway needs. The road building industry has its agenda.

Further complicating the outlook is the desire of the new Congress to cut federal spending. There are few federal programs that can make a dent in the federal budget and highway funding is certainly one that could impact on the deficit and budget, even though it is funded entirely be a dedicated tax. There is certain to be legislators who will try to use the Highway Trust Fund for other purposes and the highway interests must be vigilant.

It’s all a very difficult situation with many conflicting interests.

The ARVC Public Affairs Committee last March requested that the association’s Washington representatives take a lead role in bringing together the travel, tourism and recreation communities to develop united positions and work cooperatively to protect the interests and needs of these various industries that serve the travel, tourism and recreation world. The Tourism Highway Coalition is now meeting regularly to assess the status of the possible renewal of the federal highway program and to work with Members of Congress and with the various industry groups to assure that the interests of these groups are served in any legislation that emerges. The coalition is being staffed primarily by Aubrey King with assistance from David Gorin.

Among the interests the coalition is working on include…

  • Continued funding and support for Scenic Byways
  • Continued support for the federal recreation trails program, rails to trails, bike lanes and similar alternative travel options
  • Continued support for travel enhancements such as visitor centers, information systems and safety enhancements to roads
  • Continued funding for maintaining and upgrading roads on public lands

The future of the federal highway program is a high priority for the RV park and campground industry.

Public Campground Competition

In recent years, public land agencies on the local, county, state and federal levels have all been engaged in upgrading campgrounds to grow their visitation and generate fee revenue to help support public lands and parks. As budgets get tighter and the need to balance budgets at every level becomes more and more prevalent, these public campgrounds represent a potential source of revenue for public agencies. More and more, public campgrounds are looking, acting and marketing themselves as if they were private sector businesses.

This increased competition from public sector facilities presents a challenge to the private, commercial park business. Should the industry embrace these facilities and treat them as just another business competing for the guest? Should the industry continue to exclude the public parks from participation with the private sector? I’d expect that these questions will come up more and more often in the coming years.

These are among the key federal issues of importance to the park business. There are others. Promoting international visitation to the US. Funding the new Tourism Promotion Board. Estate taxes. The role of recreation on federal public lands. Energy prices and availability. During 2011, this column will try to keep the park industry abreast of these issues and others that we can’t now envision but are sure to come up.