Arizona Gov. Douglas Ducey petitioned the U.S. Department of Transportation (DOT) to allow the Arizona Department of Transportation (ADOT) to operate commercial rest areas under a pilot program, a move that threatens the truckstop and travel plaza industry as well as other businesses operating near Interstate exits.
NATSO immediately criticized Arizona for seeking to sidestep a federal law that has been debated and reaffirmed in Congress many times and seeking to allow the state to compete with small-town businesses, siphoning jobs, customers and local tax revenues.
In a letter dated Nov. 6 to Secretary of Transportation Elaine Chao, Gov. Ducey requested that the state of Arizona be granted a Special Experimental Project (SEP-15) to conduct a pilot project demonstrating the technology and innovation benefits of operating rest areas through a partnership with the private sector. Gov. Ducey also urged DOT to work with Congress to eliminate the federal prohibition altogether.
Several states, including Oregon, Washington and California, have filed similar requests under SEP-15, which is a research provision, within the past decade. Those requests were denied by the Federal Highway Administration (FHWA). NATSO nonetheless takes this as a serious threat to the travel plaza and truckstop industry and all businesses operating at the exit interchanges and will actively oppose this effort.
In his letter, Gov. Ducey referred to the federal prohibition on commercial rest areas as an “archaic” and nonsensical” prohibition that “punishes” states where commercial rest areas are not grandfathered in under the 1960s-era law.
In a statement, NATSO President and CEO Lisa Mulling urged U.S. DOT to reject Arizona’s petition because rest area commercialization threatens thousands of businesses serving travelers at the interstate exits, risking the livelihood of hundreds of Arizona business owners and their employees as well as local communities that depend on the property taxes these businesses pay to fund schools and police.
What’s more, the provision of federal law that Gov. Ducey calls ‘nonsensical’ and would like to eliminate empowers the blind community in the United States because blind-owned businesses currently receive priority for Interstate rest area vending opportunities.
“This is not privatization, as the governor maintains. In fact, commercialization of rest areas uses government power to establish one business as a monopoly to the detriment of others operating in the free market,” said NATSO President and CEO Lisa Mullings. “Rather than privatizing a government function, this proposal would transfer sales away from the private sector to the government.
“We don’t need a pilot program to see the effects of commercial rest areas on local communities and businesses because there are at least a dozen states that oversee commercialized rest areas,” said Mullings. (These state-controlled rest areas were already commercialized when the federal law was passed and were thus allowed to continue.) “We can witness the anti-competitive effect that commercialized rest areas has on Interstate businesses,” she said, citing a study conducted by Virginia Tech. The report found that there are 46 percent fewer gas sales, 44 percent fewer restaurant sales and 35 percent fewer truck service business sales. In total, this is a loss of over $55 billion in annual sales for interchange businesses.
Congress effectively privatized highway services in 1960, when Congress prohibited states from offering commercial services at rest areas along the Interstate Highway System specifically so that private sector entities would grow and provide services to the traveling public. Today, hundreds of thousands of established businesses, including travel plazas, convenience stores, restaurants and hotels are meeting the needs of highway travelers.
NATSO is joined in its opposition to commercial rest areas by the fuel retailing, convenience store, hotel and restaurant industries as well as blind entrepreneurs.
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