TESTIMONY FOR THE RECORD: PATRICIA ROJAS-UNGAR VICE PRESIDENT, GOVERNMENT AFFAIRS, OUTDOOR INDUSTRY ASSOCIATION ON “FORCE OF NATURE: THE POWER OF SMALL BUSINESSES IN AMERICA’S RECREATIONAL INFRASTRUCTURE”
Chairwoman Velázquez, Ranking Member Chabot, and members of the Committee:
I am pleased to submit testimony on behalf of Outdoor Industry Association (OIA), the leading national trade association of 1,300 suppliers, manufacturers, and retailers of outdoor gear and products. The outdoor recreation economy generates $887 billion in consumer spending, supports more than 7.6 million highly skilled American jobs, and makes other significant contributions toward the goal of healthy communities and healthy economies across the United States. On behalf of our member businesses, we thank you for holding today’s hearing, “Force of Nature: The Power of Small Businesses in America’s Recreational Infrastructure,” on the economic impact of outdoor recreational infrastructure, how small businesses contribute to this industry, and how the federal government can ensure the industry continues to thrive.
Small businesses make up the backbone of the outdoor industry. In fact, 78 percent of OIA’s 1,300 members generate revenue of less than $10 million dollars. These small businesses are especially attentive to legislation and regulations that ensure a framework that encourages economic growth, promotes outdoor recreation, conserves and grows our public lands, protects our environment, and ensures clean air and clean water for generations of outdoor enthusiasts.
We welcome the efforts being undertaken by the Committee to promote American small businesses and to create a legislative and regulatory environment where they can prosper and continue to grow. In the outdoor industry, the success of those small businesses relies heavily on a strong workforce, growth in outdoor recreation participation, access to outdoor spaces, fair and balanced trade, conservation of public lands, and protection of our climate. At OIA, we see the economic, health, and social benefits from the outdoors every day and hope to continue working with your Committee on this important topic.
Unlike other industries, the outdoor industry lacks a traditional onramp for recruiting and seeking new talent in the workforce. There are no job fairs and very few degree programs, and there is a lack of awareness that the outdoor industry is a viable career path, so the outdoor industry is working to change all of that and proactively attract and retain a qualified, diverse workforce. OIA will soon launch the Outdoor Industry Business Certificate program with university partners around the country that will target individuals who are looking to enter the outdoor industry from college or change career paths from other industries. We will promote the certificates via our new career center and through colleges and universities.
In addition, we will be conducting outreach to “career changers” who have skillsets they’ve developed in other industries—such as people who work in finance, marketing, HR, sales, or operation—but who may have a passion for the outdoors. Our industry needs all of those skills, but many people aren’t aware that the outdoor industry is a viable path for a lifelong career that combines their personal passion for the outdoors with their professional pursuits. OIA also convenes an Educators Working Group at each Outdoor Retailer Show (the largest B2B trade event serving the outdoor industry), with approximately 10-15 universities in attendance at each meeting, as well as key human resources professionals from several outdoor companies.
Promoting Outdoor Participation
Incredibly,146 million Americans participate in at least one outdoor activity per year, which helps to generate over $887 billion in consumer spending and makes up 2.2 percent of U.S. gross domestic product—but that’s only half of the story. Our research also shows that 50 percent of Americans fail to spend even one day a year participating in any outdoor recreation. And if you look more closely at the ethnicities of those that are getting outdoors, 74 percent are white, 10 percent Hispanic, 9 percent black, and 6 percent Asian. These statistics do not reflect the country’s rich and increasing diversity. OIA sees filling this gap as a key priority that will not only result in immense economic growth but also deliver a multitude of benefits to our nation.
OIA’s charitable arm, the Outdoor Foundation, is committed to working with the private sector to fund Thrive Outside Communities across the country that will build the capacity of local organizations and leaders to provide repeat outdoor experiences for kids and families. But this is an issue that the private sector cannot solve on its own, which is why today’s hearing is so vital. We are eager to continue to partner with the Committee and Congress to explore and advance policy solutions that will facilitate more Americans, especially those in underserved communities to get outside.
Access to outdoor spaces and public lands is critical to increasing the participation rate among Americans and minorities. Increasing access to outdoor spaces requires a multifaceted approach. OIA supports several measures introduced in Congress to increase access to outdoor spaces, including H.R. 4512, the Outdoors for All Act; H.R. 2435, the Accelerating Veterans Recovery Outdoors Act; and H.R. 4273, the Transit to Trails Act.
The Outdoors for All Act (H.R. 4512) will help communities nationwide develop new parks and open spaces while improving upon the existing areas designated for outdoor recreation. At OIA, we believe that everyone deserves access to outdoor recreation close to home. As it stands, one in three Americans does not live within a 10-minute walk to a quality park or open space, and residents in low-income communities live farther from a quality outdoor recreation area than their affluent counterparts. The Outdoors for All Act aims to improve the equity of access and quality of outdoor recreation by establishing a mandatory source of funding for the Outdoor Recreation Legacy Partnership (ORLP), a nationally competitive grant program funded by the Land and Water Conservation Fund (LWCF). This legislation will empower communities nationwide by funding projects that support job training for America’s youth and providing resources through public-private partnerships, at no additional cost to taxpayers. The Outdoors for All Act will bring us one step closer to achieving equity in outdoor access while making our communities healthier and safer.
The Accelerating Veterans Recovery Outdoors Act (H.R. 2435) would create an inter-agency task force to identify ways to expand access and usage of public lands for outdoor therapy and rehabilitation treatments for veterans. OIA supports this legislation because managing physical and mental health issues associated with military service is a considerable challenge for many veterans. Some veterans turn to the outdoors to heal from the trauma of war and renew bonds with family members after long deployments. Veteran organizations, including Veterans of Foreign Wars, Disabled American Veterans, and Paralyzed Veterans of America, see participation in outdoor pursuits as a vital—and underused—tool to promote healthy physical activity, build community, and aid in the recovery from post-traumatic stress. H.R. 2435 would help improve access to the healing power of the outdoors for our nation’s veterans.
The Transit to Trails Act (H.R. 4273) directs the Department of Transportation (DOT) to establish the Transit to Trails Grant Program to award grants to certain governmental and private entities for projects that increase transportation access to public lands, waters, parkland, and monuments for critically underserved communities. Transit connectors to these spaces are important for all Americans, but individuals in rural and urban communities suffer most from the inability to access these lands, which should be readily available to all Americans. OIA is proud to support the Transit to Trails Act because it provides greater urban and rural accessibility to our public lands through increased and affordable transportation options.
Fully Funding the Land and Water Conservation Fund (LWCF)
Access to public lands to hike, swim, paddle, camp, fish, ski, and participate in other recreation activities all depends on the protection of places to provide opportunities for people to get outdoors. From backyards to backcountry, LWCF is the primary federal program investing in access to our public lands and waters. These areas range from our iconic national parks and national trail system to community playgrounds and state forests. LWCF funds have gone to every state and nearly every county across the country, making it one of the most successful programs for protecting access to our outdoors, no matter where you live, boosting the national recreation economy. According to the Department of Interior, over 90 percent of LWCF funding has gone toward providing public access. OIA is grateful for the overwhelming support from Congress to permanently authorize the program this year. We now seek your support for H.R. 3195, the Land and Water Conservation Fund Permanent Funding Act to ensure that LWCF is fully financed to meet the growing recreation needs in every state throughout the country. OIA strongly supports this legislation, and with 229 cosponsors, we believe this bill deserves full consideration by the House of Representatives before the end of the year.
Improving Recreation Permitting and Access on Public Lands
Ensuring that more Americans have ready access to recreation on America’s public lands is a top priority for the outdoor industry. Unfortunately, unnecessary hurdles prevent many people from accessing our public lands for recreation. For example, recreational permitting systems managed by federal land management agencies are outdated and burdened by unnecessary bureaucratic barriers. This can make it extremely difficult for guides, outfitters, and outdoor programs to take children and adults outdoors.
We believe that with some simple reforms, the permitting systems could be more responsive, efficient, and transparent. H.R. 3879, the Simplifying Outdoor Access for Recreation (SOAR) Act, seeks to make several changes to reform these systems. It modifies the procedures for issuing special recreation permits for certain public land units. We urge you to consider ideas such as providing dedicated staff to agencies to process applications, allowing a single permit to be used for similar activities, directing agencies to collaborate with one another, and issuing a single permit for activities that cross agency boundaries. We believe that, with your support, we can improve the recreational permitting systems to make it easier for all Americans to experience public lands with the help of a guide, outfitter, or educational program.
It is also important to establish outdoor recreation as a priority for federal land management agencies, further improving recreational opportunities on public lands. That’s why we support H.R. 3458, the Recreation Not Red Tape Act, which would instruct land managers, during their existing planning processes and inventorying for potential new Wilderness or National Wild and Scenic Rivers designations, to inventory for places of recreational significance. This process will assist Congress in developing new National Recreation Area designations and help to ensure that management plans appropriately account for recreation. We are constantly working with our members, partner organizations, and Congress to ensure that those who wish to get outdoors do not face major hurdles to do so.
Support for Restore Our Parks and Public Lands Act (ROPA)
Our nation’s national parks are some of the most iconic and majestic places in America and a huge draw for many to the outdoors. In fact, in 2018, there were 318 million visits to our country’s beautiful national parks, with visitors spending billions in gateway communities. To properly accommodate so many visitors, national parks need to be well maintained. Unfortunately, our national parks have failed to receive the federal funding needed to address serious and significant maintenance problems. Needed repairs range from unmaintained trails to crumbling roads to visitor centers built 50 years ago, desperately in need of updating. One-third of this maintenance backlog are critical projects that must be completed to avoid irreparable damage. More than $1 billion of the nearly $12 billion maintenance backlog is on recreation assets, such as trails, campgrounds, and marinas. H.R. 1225, the Restore Our Parks and Public Lands Act, was introduced with the goal of repairing the maintenance challenges in our national park system by dedicating $6.5 billion (over five years) in new funding drawn from royalties collected from resource extraction on public lands and waters. None of the new funding would be diverted from the LWCF, which also collects funding from this source. OIA strongly supports this bipartisan legislation and urges the House of Representatives to take up this legislation before the end of the year.
Protecting America’s Treasures
We are pleased that the House of Representatives will consider three important public lands bills starting today: the Colorado Outdoor Recreation and Economy (CORE) Act (H.R. 823), the Grand Canyon Centennial Protection Act (H.R. 1373), and the Chaco Cultural Heritage Area Protection Act (H.R. 2181). These bills seek to protect some of this nation’s most treasured land and offer outdoor enthusiasts the opportunity to continue to enjoy these places for generations to come. We strongly support their approval in the House and encourage the U.S. Senate to schedule them for consideration.
A Balanced Trade Agenda
OIA’s trade program represents the diversity of our membership, including outdoor companies whose products are conceived, designed, and produced in America and that utilize global value chains to bring their products to retail markets. For all of our members, but in particular for the small, family-owned businesses that are the backbone of our industry, we work to ensure that U.S. federal trade policy fosters and promotes a stable and predictable environment for all outdoor businesses, while seeking to lower costs for those companies and their customers. International trade benefits U.S. importers and domestic manufactures alike, creates new jobs, lower consumer prices, and open new markets to U.S. exports. For its part, OIA pursues a “balanced trade policy,” seeking only tariff eliminations on outdoor products that have no commercially viable domestic production. For those products that are made in America, we promote federal policies that support U.S. manufacturers and help them transition to competition in a global economy.
The ability of small and medium-sized outdoor businesses to create jobs; develop new, innovative, and high-tech gear; and compete in this global economy, however, has been significantly challenged by the U.S.-China trade war. Backpacks, sports bags, kayaks, bikes, camp chairs, camp stoves, leather ski gloves, and headwear now face a 25 percent punitive tariff. Some outdoor apparel, footwear, and sporting goods have already been saddled with a 15 percent punitive tariff, with another group of those products set to be hit on December 15 with yet another 15 percent tariff.
Even though there is no commercially significant domestic production of many of the outdoor products that have been impacted by these punitive tariffs, they already face normal import duties, as high as 32 percent for polar fleece jackets and 37.5 percent for hiking boots. An additional tariff of 15 or 25 percent in addition to what some members are already paying, will raise costs for outdoor companies, cut already thin profit margins, hamper innovation and new product development, and depress U.S. job growth. These higher costs have also impacted our domestic manufacturers who often rely on critical inputs from China and other countries.
In total, from September 2018 to July 2019, America’s outdoor recreation businesses have paid $1.8 billion more in tariffs on affected products compared to the same period a year ago. When you add the normal tariff rates to the new punitive tariffs, outdoor industry companies have paid $2.8 billion in total on affected products from China—triple what they paid last year.
And this data does not even cover the much larger group of products on the so-called List 4 that were assessed the 15 percent punitive tariff on Sept. 1. When this data is released in November, we expect to see a significant increase of duties paid by outdoor companies.
Ultimately, the U.S.-China trade war could force some small and medium-sized businesses to shut their doors, resulting in significant job losses. And it could put many of these business’s products out of the financial reach of U.S. consumers.
While outdoor companies are actively looking to diversify their sourcing options, in several cases, China continues to dominate the market, with the infrastructure and skilled workforce outdoor products require. Other countries that are viable sourcing options may already be at capacity and unable to accommodate a massive, immediate shift of supply chains out of China. It will take additional time, significant investment, and training to shift sourcing to other countries. Our members are prepared to do that, but additional tariffs at this time could negatively impact their ability to remain competitive and make the necessary investments to do so.
In the meantime, human and capital resources that should be used to hire new employees, create exciting new innovative outdoor gear, and identify new sales and business opportunities will be devoted to supply-chain management and tariff mitigation strategies. Outdoor companies are being asked to put business growth on hold. In some cases, they will be forced to make the decision to lay off staff or stop operations altogether.
The time has come for the U.S.-China trade war to end. We call on the president to conclude a comprehensive agreement with China that protects U.S. intellectual property and removes all punitive tariffs immediately. Outdoor companies should be able to get back to doing what they do best: developing new gear to enhance the outdoor experiences and get more Americans outdoors.
Protecting Our Climate
Changes to our climate have led to longer and hotter summers, prolonged droughts, increasingly devastating forest fires, rising sea levels, warming waters, reduced river flows, and an unreliable snowpack. These changes, in turn, impact the safety and quality of outdoor experiences. They also result in a decrease in predictability, impacting businesses across the industry: manufacturers making decisions regarding the types and number of products they make, retailers trying to forecast for future seasons knowing the past few have had major fluctuations, and guides whose livelihoods rely on the outdoors being accessible and safe.
There is an increased need and urgency to address the causes of climate change and mitigate and adapt to their impacts. OIA has been working to identify and champion proposals that can garner bipartisan support, including the funding for outdoor recreation areas, support for renewable energy development, setting and achieving science-based emissions targets, and establishing a price on carbon as part of an overall solution to combating climate change. We hope to work with members of the Committee on these and other climate solutions moving forward.
I want to thank Chairwoman Velázquez, Ranking Member Chabot, and all other members of the Committee for giving the outdoor industry this important platform to discuss the critical role this industry plays in creating jobs and promoting economic growth. We hope to work with you to advance the many policy priorities outlined today that will have an important and long-term impact on the health of our industry’s small businesses.