Proposed changes being considered by Arizona, Virginia, California and other states would unfairly pull the rug out from c-stores along highways
Last fall's election results left some employers hoping the worst might be over when it comes to growing government pressure on our businesses. Unfortunately, the political leadership changes in Washington and elsewhere will do very little to alter the economics that may create the toughest competitors operators of c-stores and travel plazas have ever faced â our own state governments.
Most state governments are strapped for cash and will continue to desperately pursue any and all options to raise revenues. Several are even looking to turn their backs on the small businesses and communities along their interstates by commercializing their rest areas.
For many years, our company has owned and operated convenience stores and travel plazas along highways in Arizona and Colorado. As any of us fortunate to thrive in this tough industry know, location is the single most important factor when it comes to long-term success. Of course we must also operate well, deliver good service and provide value to attract customers. But if you had to pick the most critical decision we make, it's where we choose to locate our stores.
The years and dollars we've invested to build our businesses also create local jobs and support our communities through tax revenues and other means. This investment will be wasted if the state government decides to set up shop at rest areas â the prime spots alongside the interstates. Why would travelers bother to exit if they can find everything they need, courtesy of the state, on the median or shoulder of the interstate?
For those unfamiliar with commercialized rest areas (mostly found on the East Coast), these state service plazas were grandfathered in when the federal law prohibiting commercial rest areas was passed around 50 years ago. These operations dominate travelers' business so much so that there are 50 percent fewer businesses at the exits on the interstates with commercialized rest areas. Because of the prime right-of-way location that only the state has access to, these facilities attract millions of customers each year for food, fuel and convenience items. While state bureaucrats try to promote commercial rest areas as politically popular by calling it ârest area privatizationâ or describing it as a great business opportunity for our industry, the fact is the concession agreements to manage these operations have all gone to one of two large multi-national corporations in the concessions business.
The shortsighted idea of a state granting itself a virtual monopoly with commercialized rest areas would ultimately hurt more than help the state's residents. Revenues would be stripped from the communities along the highways and transferred into state coffers and the pockets of a few large corporate retailers. Local communities would lose jobs and the tax revenues they desperately need to fund schools, fire departments, police protection and other services.
It would be a classic case of robbing Peter to pay Paul, with the net economic impact devastating to towns already in distress. According to an economic study, convenience stores, gas stations, restaurants and other businesses serving travelers along highway exits employ more than two million people. Many of these jobs would be put in jeopardy by state-controlled travel service monopolies at interstate rest areas.
There are sound reasons why commercial rest areas have been prohibited by federal law for nearly 50 years in all but a few grand-fathered states. When the interstate system was young and being expanded, our nation's leaders had the wisdom to stimulate economic development along the highways. The plan worked to perfection and many small communities sprung up near interstate exits.
Now, some states want to change the rules. The proposed changes being considered by Arizona, Virginia, California and other states would unfairly pull the rug out from any one of our companies and our employees. Where commercialization is allowed, research shows, jobs and revenues are lost.
Yet many in the convenience store industry are not even aware of this issue. While we focus on sales, profits, hiring, training, merchandising, marketing and the million other details that running our businesses require, bureaucrats are seeing dollar signs. And it's not just convenience store or petroleum retailers that will be hurt. This issue impacts many other businesses that thrive based on their convenient access for traveling professionals or vacationers.
State Departments of Transportation are calling for the federal law to be overturned, which will take an act of Congress. We need to fight hard to keep this law in place. A number of the associations representing us in Washington are fighting hard, including NATSO, PMAA, NACS and others. It's important that we watch this issue, and I encourage retailers to learn more by visiting www.jobsnextexit.com, the Web site for the coalition, Partnership to Save Highway Communities. Repealing the commercialization ban would put exit-based businesses at an enormous and unfair competitive disadvantage. If we sit on the sidelines while states move to reverse federal law in this desperate money grab attempt, our businesses will feel the impact sooner rather than later.
The economy is tough enough for everyone, and to shift state spending and budget problems onto the backs of business owners and the interstate communities that we support is clearly not the right answer.