Posted by Yevgeniya Bukshpun, December 7, 2010

Despite its highly publicized goal of promoting a healthy lifestyle among city residents, the Bloomberg Administration announced plans to double the membership fees at the city’s recreational centers and increase the costs for tennis and ball field permits as part of its latest budget plan. The result may be that a signature policy, whose long-term goal is to improve the health of New Yorkers, may be undermined by a shorter-term goal of balancing the budget.

Children and youth would still be admitted to recreation centers for free, while adults would have to pay $150 per year for centers with pools, up from $75, and pay $100 for centers without pools, up from $50. Membership fees for senior citizens, who currently pay $10 per year, would increase to $25.

Seasonal tennis permits for adults would also double, from $100 to $200, while single play permits would rise from $7 to $15. Permits for ball field use would also increase: fees for fields without lights would rise from $16 to $25 and those for lighted fields would rise from $32 to $50.

The recent history of the city’s recreational centers reflects a persistent tension between recovering costs for services and a broader goal of providing equitable access to recreational opportunities for all city residents. Prior to 2002, all of the city’s recreational centers were free of charge but welcomed user donations. Faced with the economic crisis after the Sept. 11 attacks, the city instituted mandatory fees at all but six recreational centers that were funded by federal grant money. In July 2006, the parks department began charging fees at all recreational facilities.

This next round of fee hikes comes at a time when many New Yorkers rely on these recreational centers and facilities as an affordable alternative to more expensive private clubs. In 2010, 174,000 New Yorkers were members of the city’s recreational centers. Membership among seniors and children has been increasing each year since 2006. Kids make up 36 percent of center users, while about 20 percent of members are seniors. Adults, at nearly half the total membership, represent the largest share of those who use recreational centers. Yet adults may have been the most sensitive to fee increases as adult membership declined by 38 percent after the expansion of mandatory fees in fiscal year 2007 and took two years to rebound. Since 2007, overall membership at the city’s recreational centers has trended upward.

While the 2007 drop in membership may have been caused by more than just the fee hike, given the continued high level of unemployment in the city it is likely that membership will decrease as a result of the fee increases. Access to public recreational facilities contributes to overall public health and the fee increase may seriously undercut access in low-income communities that are likely to be especially sensitive to price increases. Low-income communities experience higher rates of obesity and diabetes, with 7 in 10 residents overweight or obese, compared with the citywide average of 6 in 10 residents.

As the number of adult and senior citizen members increased over the past few years, revenue from recreation center membership fees reached $4.8 million in fiscal year 2010. Assuming a 5 percent decline in membership, the parks department expects the higher membership fees to increase city revenue by $1 million in the current fiscal year and by $4 million each year starting in 2012, bringing the total membership revenue to $5.8 million in 2011 and $8.8 million in 2012. In 2010, revenue covered less than one-quarter of the $21.5 million the city spent operating the centers. If fees are raised as proposed and the department’s forecast of modest declines in membership proves correct, membership revenue would still cover less than half the cost of operating the centers.

The likelihood of significant new revenue from a fee increase on the sale of tennis permits is less certain. In fiscal year 2010, the city issued 12,800 permits to use tennis courts, which generated $1.8 million of revenue. Officials project the same 5 percent decline in tennis permits as in recreation center memberships as a result of the increase in fees. If so, sales of tennis permits would bring in $1.2 million of additional funds in 2011 and total $3.0 million. In 2012 through 2014 the parks department expects the higher priced permits to score $3.4 million in annual revenue.

But these revenue projections may be too optimistic given the behavioral change seen a few years ago. IBO’s previous research found that doubling the cost of adult season tennis court passes in 2003—from $50 to $100—led to a 40 percent drop in sales volume, as players switched to single-play passes. Sales of single-play passes, the price for which remained unchanged at $5 until 2005—increased, yet total revenues rose only marginally from $1.2 million in 2002, prior to the fee increase, to $1.4 million in 2005 following both fee increases.

Whether the city is able to generate the additional revenues it projects will depend on how city residents react to a 100 percent increase in recreation center membership fees and tennis permits and a nearly 60 percent increase in ball field permits at a time when many New Yorkers are still struggling to recover from the economic downturn. Residents may seek out less expensive ways to stay physically fit or stay home altogether and undermine the Mayor’s efforts to keep them healthy.