Finding a Road Forward

You have been in the car for hours, but it feels like it’s been days. You’re hungry, you could use a few hours of sleep, your car’s gas light has been orange for 10 minutes, and you could have used a restroom at least 25 miles ago.

But there isn’t an exit off the interstate for another 10 miles, and now you don’t think you can make it.

And then…

There’s a highway rest stop on the horizon.

You reach it, pull over, and you barely make it to the restroom before your bladder calls it quits. After the initial relief fades, you look around the rest area for some food. The only options are a modest selection of old packaged snacks, like those peanut butter-filled cheese crackers, in a vending machine. There aren’t any gas pumps, either. But there are some state tourism pamphlets to flip through. (It’s been a while since you trekked through a cave.)

This August, one of your friends is probably living through that very scenario — maybe even sometime today — on their way to the beach or a national park.

While they might not be a shopper’s paradise, highway rest areas are a vital safety measure for everyone from truck drivers to the 25-year-olds moving across the country to work on Senate campaigns — but more and more frequently these days, rest stops might not be there in moments of need.

As Congress and President Donald Trump turn to their next legislative priorities — tax reform and infrastructure — states burdened with funding issues are taking another look at a contentious policy proposal to raise more revenue for transportation infrastructure by commercializing highway rest stops. The problem is that local business owners with diners and small gas stations say such a change would upend their revenue stream and threaten their livelihoods.

In recent years, states have faced budgetary troubles with their transportation programs. Some states, like Florida, Ohio, South Dakota, and Connecticut, have either shut down some of their rest areas or are on the verge of doing so.

Aging infrastructure in the United States means repair costs are on the rise, but elected officials seeking re-election to their respective seats generally tend to view the tax hikes that would address those costs as nonstarter rather than a potential solution.

Enter an idea some lawmakers have started to embrace in recent years: Open up highway rest areas to gasoline and food sales, and not only erase the funding problem, but maybe even generate additional revenue.

Still, like all the major issues facing the federal government right now, it’s a lot more complicated than that.


President Donald Trump signaled in his budget proposal this spring that his administration will push private investment in transportation infrastructure, including highway rest stops.

The White House’s fact sheet included this nugget: “The administration also supports allowing the private sector to construct, operate, and maintain Interstate rest areas, which are often overburden[ed] and inadequately maintained.”

Of course, that decision rests with Congress.

Congress banned commercial activity at highway rest stops when the Interstate Highway System was created via the Federal-Aid Highway Act of 1956, with few exceptions. Vending machines were allowed, along with media, like books and DVDs, that promote state tourism.

More recently, state and federal lawmakers have eyed scrapping the ban as a way to boost state revenue.

In 2012, Sen. Rob Portman (R-Ohio) introduced an amendment to the highway bill to give states the ability to end the prohibition on food and fuel sales, but his Senate colleagues overwhelmingly voted it down, siding with the owners of existing local businesses off the highways.

Banks’s bill

This April, Freshman Rep. Jim Banks (R-Ind.) tried again.

He introduced a bill to allow states to commercialize highway rest stops in order to collect additional revenue through property leasing and taxes on site, which could then be invested into infrastructure projects.

“Allowing for commercial activity at rest areas, specifically food services, convenience stores, and private restaurant operations, is what states need to convert deteriorating rest areas from tax siphons into significant revenue generators,” Banks argued in a letter urging his colleagues to support the bill.

Rep. Tom Garrett (R-Va.), a co-sponsor of Banks’s bill, told Independent Journal Review the measure was met with enthusiasm from state officials who saw the move as necessary, but added that others in various industries closely tied to the interstate highway system saw it as “the end of the world.”

While Garrett acknowledged there may be some merit in the concerns of opponents, he argued the bill would be an improvement over current law.

“More choices are better, and what we’ll learn ultimately is what works best if we give people the latitude to make decisions for themselves,” he told IJR.

Legal Battles

While commercial activity is banned for rest stops built after 1960, some East Coast states had already constructed rest areas before Congress created the Interstate Highway System. Those locations were permitted to keep operating afterward.

Meanwhile, other states have gotten creative in their efforts to keep rest stop lights on, and some have even turned to violations (or charitable interpretations) of the law to raise funds.

In 2011, New York Governor Andrew Cuomo unveiled a new tourism initiative and approved the construction of several new welcome centers and improvements to existing highway rest areas which would include “Taste of NY” food stores under the guise of promoting state tourism, Gannett reported.

Federal Highway Administration officials acknowledged the questionable status of the rest stops, promising to bring them “into compliance” if it was determined regulations were being broken.

Two of the rest stops have been built thus far, and one of them is located in Rep. Claudia Tenney’s (R-N.Y.) district.

Tenney wrote a letter to Federal Highway Administration Acting Deputy Administrator Walter C. Waidelich Jr. just two weeks ago, on July 24, to call for the rest stops to be brought back into compliance with existing regulations.

Tenney said Cuomo’s commercialized rest stop was in “clear violation of established federal law and threatens the livelihoods of small businesses within my district that are located just off the interstate.”

“New York has no legal basis for placing a commercialized rest area that sells food and drink outside of vending machines along I-81,” Tenney wrote. “By promoting a state-run monopoly that gives private entities no chance of competing, the state’s commercialization of interstate rest areas is a lose-lose for local communities and small businesses.”

Kevin Biesty, deputy director for policy at the Arizona Department of Transportation, told IJR that while he and Arizona DOT Director John Halikowski have been pushing for changes to the commercial restrictions for nearly a decade, the state doesn’t plan to flout the law like New York has.

“We’re going to continue to work through the legal process to get the law changed,” Biesty said.

He supports Banks’s bill that would empower states to make those changes.

“Many of our rest areas are at or approaching a 50-year life,” Biesty explained, and several of Arizona’s rest areas are found in isolated rural areas, meaning building and maintaining them is like managing “little cities out in the middle of nowhere” with steep costs for clean water, waste removal, and electricity.

Their funding comes from vehicle license and registration fees and gasoline taxes, but many of those dollars go toward maintenance and operations for the highway system and technology enhancements.

“With rest areas,” he said, “if we were able to take a portion of our operation and say, ‘Look, we’re going to take this one rest area and we’re going to allow Starbucks and a burger shop and a gas station to go in,’ that way we don’t have to spend money to update that facility and maintain it.”


Some Americans disagree, though, believing commercial rest stops are a potentially disastrous threat to their communities and livelihoods.

“The prime opposition comes from NATSO — National Association of Truck Stop Operators,” Biesty told IJR. “Because, quite frankly, they don’t want the competition.”

But Tiffany Neuman, vice president of Public Affairs at NATSO, doesn’t think the issue is so simple.

“It’s a lot more than the truck stops and travel plazas who are opposed to it,” she told IJR. “It’s opposed by chain restaurants, hotels, blind merchants.”

Some of the fiercest critics of efforts to commercialize rest areas are blind entrepreneurs.

An 81-year-old law, the Randolph-Sheppard Act, designated the visually impaired to have the priority in operating vending machines on federal property. Those in the program collect cash from vending machines and operate them for a living.

In fiscal year 2014, more than 2,000 blind vendors operated 2,389 vending machines on federal grounds across the country, according to the U.S. Department of Education. That year, the Randolph-Sheppard Vending Facility program earned $693.6 million, and profits for individual vendors averaged $59,012.

Of those vending machines, more than 700 are located at highway rest stops, which are operated by more than 300 blind merchants, according to the National Association of Blind Merchants.

“The total revenue collected nationally from third party vending is approximately $5 million annually,” NAMB said of rest stop vending operations in a statement last year. That income is used by states to match dollars for federal vocational rehabilitation funding to improve life for individuals with disabilities.

“NABM would oppose any additional commercial activity that involves the sell of tangible products,” the statement continued. “We believe that any retail operations should be operated under the priority currently afforded to state licensing agencies under the Randolph-Sheppard Act.”

Arizona DOT’s Biesty acknowledged the Randolph-Sheppard issue was tricky to deal with in commercialization efforts, but told IJR states could certainly find ways to commercialize rest areas without jeopardizing business opportunities for blind merchants. His main concern remains the truck stop industry.

“There’s a way to do this. But to simply say we’re not going to do this because a segment of the business community doesn’t want the competition? That’s just wrong,” Biesty said of NATSO. “We can’t keep operating like that.”

Truck stops and local business owners

Aside from blind entrepreneurs, local business owners have also been vocal in their opposition to commercializing rest areas.

Businesses have invested heavily in real estate off interstate exits, NATSO’s Neuman explained, and for states to flip highway policy on its head after more than 50 years of established rules would be devastating.

Neuman pointed to a Virginia Tech study that concluded hypothetical commercialized highway rest areas would result in a 46 percent decline in gas sales, a 44 percent decrease in restaurant sales, and a 35 percent hit to truck stop revenue in counties currently free of commercial rest areas.

Not only that, but small towns depend on the local tax revenue those off-interstate businesses generate.

“In many rural communities located near interstates, gas stations, restaurants, convenience stores, and truck stops represent the largest local taxpayers, contributing more than $22.5 billion in state and local taxes annually,” Neuman wrote in an email.

If state governments opened up highway rest stops to corporate partnerships, she argued, local tax dollars would be siphoned away from small communities, going to state governments instead.

NATSO’s VP of Government Relations David Fialkov told IJR commercializing rest stops would act as a “backdoor sales tax on towns.”

“The fact is, it’s a government-sanctioned monopoly at the expense of local […] mom and pop businesses,” Fialkov said.

Finding a road forward

For those reasons, Fialkov argued, Congress probably won’t alter the commercial limitations on rest areas anytime soon. He said there may be a need for change in transportation and infrastructure funding, but that the issue isn’t as complicated as it seems.

Simply raise the fuel tax, Fialkov said, noting the tax hasn’t been raised in more than 20 years — despite the challenges of higher construction costs and inflation.

Trump, whose ambitious infrastructure initiative hasn’t taken shape yet, suggested he was open to hiking the gas tax in a May interview with Bloomberg. Such a move would go against conventional Republican wisdom on the issue, though, and likely wouldn’t enjoy much GOP support in Congress.

But Fialkov sees the recent Republican pivot to tax reform as an opportunity for lawmakers to bury a gas tax increase in a bill that would cut tax rates overall. “It’s hard to call somebody a tax-raiser if you’re pointing to a vote that results in people getting more money in their pocket,” he explained.

“The fuel tax was the most efficient, ubiquitous way of raising revenue for transportation investments,” Fialkov told IJR. “It’s simply a matter of garnering the political willpower to make that case to the public.”

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