Along Stretches of Highway, States Eye New Ad Opportunities
Federal law makes it hard for states to capitalize on one of their biggest assets: their highway systems. But that hasn’t stopped state officials from trying.
Highways may be some of states’ greatest assets, but increasingly it seems state officials see them as underutilized. The result has been a flurry of ideas in recent years -- some successful, some not -- to put the large swaths of land to better use.
The most recent example comes from California, where lawmakers are considering a pilot program to allow advertising on 25 of its 900 digital message boards.
Gov. Jerry Brown’s administration has pushed the idea, arguing that a pilot program could raise $8.5 million to $10.2 million a year, which would be more than enough to cover the $5 million it takes to operate the message boards statewide. It would also improve the quality of the 25 signs from monitors with yellow text to more modern LED screens that can display crisp pictures.
Not everyone is on board with the idea. In fact, the California Association of Counties, the League of California Cities, half a dozen individual municipalities and several outdoor advertising agencies oppose the measure. “Auctioning public traffic signs is not a building block to leadership. On the contrary, allowing ads on highway signs would up-end the well-established policy that official signs are for traffic control and management, not advertising,” Jim Moravec of Stott Outdoor Advertising, a California firm that opposes the legislation, wrote in a recent op-ed.
The proposal faces significant hurdles before it could take effect. A Senate panel is still tweaking the legislation, which means it would have to pass both the Senate and the House if it gets out of committee. That’s no guarantee, considering the Senate rejected similar bills in 2010 and 2016. Even if the law is approved by state lawmakers, the federal government would have to give its approval for the pilot program to move forward.
But that the California Department of Transportation would go to such lengths to test the idea shows just how alluring the prospect can be, especially for states with tight transportation budgets. And these experiments to either raise revenue or further other state priorities aren’t just limited to selling advertising. Recently, states have also tried to use rights-of-way to promote tourism and upgrade rest areas.
Just as in California, those efforts raised plenty of legal and practical concerns.
New Advertising Opportunities
States' attempts to cash in have often been frustrated by federal laws that date back to the administrations of Dwight D. Eisenhower and Lyndon B. Johnson.
In fact, a group called Scenic America, which is one of the chief proponents of removing billboards from highway landscapes, tried for nearly a decade to get the digital billboards banned outright on federal highways. The group claimed that LED screens violated state agreements with the federal government that banned flashing, intermittent and moving lights on billboards. It also claimed the new billboards violated provisions of the Highway Beautification Act, a law that President Johnson signed in 1965. But a federal appeals court dismissed Scenic America’s broad-based challenge in 2016 and the U.S. Supreme Court declined to take the case, removing a major source of uncertainty about the legality of the digital billboards.
There continue, however, to be questions about where those digital billboards should be allowed. Texas, for example, asked for permission to acknowledge sponsors on its electronic message signs, much as California lawmakers are considering now. But the Federal Highway Administration (FHWA) rejected that proposal a year ago.
Federal laws and regulations prohibit virtually all advertising on highway medians and rights-of-way. Signs along those roads must promote the safe and efficient use of the highways, and all land within the right-of-way must be devoted exclusively to highway-related purposes. The federal government’s Manual on Uniform Traffic Control Devices for Streets and Highways, which sets industry standards for signage throughout the country, specifies, “Traffic control devices or their supports shall not bear any advertising message or any other message that is not related to traffic control.”
States that don’t comply with the federal regulations can lose some of their federal highway money.
The mere threat of losing federal funding was enough to convince Michigan Gov. Rick Snyder to veto a measure last year, which would have given school districts the ability to make money by leasing out school property for billboards along highways. Snyder said the measure would have jeopardized as much as $100 million in federal highway funding to the state.
The biggest recent fight over highway signage, though, has been in New York. There, Gov. Andrew Cuomo lost a showdown with FHWA earlier this year over more than 500 “I ♥ NY” signs that Cuomo’s administration had erected along interstates and other highways. The signs promote the state’s tourism efforts by highlighting local sites and the state’s tourism app.
The federal agency threatened to cut the state’s highway money by $14 million a year if the state didn’t take down the signs by Sept. 30. The state first put up the signs, which didn’t adhere to federal design standards, in 2013 over objections from the federal government.
Even though the state has agreed on principle to take down the signs, it still is working with federal officials to try to develop signs that comply with federal regulations but also promote New York businesses.
Mark Falzone, the president of Scenic America, says efforts to introduce more advertising along highways end up backfiring, which is why only a few jurisdictions are pursuing those options. Most states understand the value of beautiful transportation corridors and their necessity for economic development and tourism,” he says.
“New York wants to put up ugly signs to promote tourism, but it would have the opposite effect. When people are looking for a place to visit, scenic beauty is one of their top considerations,” Falzone adds. “Vermont, Maine, Alaska, Hawaii are very dependent on tourism for their economy, and they have gone even further. They have a complete ban on billboards. I think other states are starting to see that scenic beauty is crucial, and billboards are blight.”
He thinks electronic message boards are blight, too. Many of them are redundant, he says, when drivers increasingly depend on smartphones and other GPS systems to help them navigate. “We would rather they not be there at all, but if they have to be there, they should be as least intrusive as possible. The more graphics, the more it’s going to stick out from the natural landscape or even the built environment."
The fight over signage is so fraught that even innocuous-looking “Adopt a Highway” signs have become perennially controversial. In 2016, for example, the Georgia Supreme Court ruled that the state had to allow the Ku Klux Klan to participate in the program. Several other hate groups have won the right to participate in similar programs in places like Missouri, Kentucky and Oregon, as well.
But in some states, particularly ones that allow sponsors to pay to adopt the road rather than clean it, the signs have been ways for controversial businesses to advertise themselves. A strip club sponsored a stretch of highway in Pittsburgh, while Colorado has seen a bevy of pot shops join the program since the state legalized marijuana. Marijuana dispensaries can’t advertise under state law, but, because of free speech concerns, they can adopt highways. Marijuana companies now account for 140 of the 287 miles of adopted highway in Colorado, Westword reports.
Rethinking Rest Stops
The 1956 law that created the Interstate Highway System simultaneously banned new commercial activity along the road. So by design, most rest stops across the country are simple affairs with parking spaces, picnic areas, bathrooms, vending machines and basic travel information. But even the quaint setup can be expensive to maintain, which is why several states in the Great Recession closed or considered closing the pit stops to deal with their budget woes.
But the federal law’s ban on commercial activity didn’t apply to state-operated rest stops that already had commercial stops when the law went into effect. So certain roads in Delaware, Maryland, Kansas, Oklahoma, Connecticut, Florida, Maine, Ohio, Pennsylvania, West Virginia, New Jersey, Massachusetts, Illinois, Indiana and New York have gas stations, restaurants and shops within their rights-of-way.
Arizona Gov. Doug Ducey recently asked federal officials to grant the state a waiver to allow commerical activity at rest stops, so that state could offer the same kinds of amenities as Connecticut’s rest stops. “In Arizona, we face a major roadblock to these partnerships: An archaic and nonsensical federal prohibition that punishes younger states, especially in the West,” that didn’t have established highways when the interstate system was created, the governor wrote U.S. Transportation Secretary Elaine Chao.
Ducey noted that the Trump administration has called for allowing more commercial activity along federal highways. He asked Chao to grant Arizona an exception to the law, using her ability to allow for pilot programs.
Ducey’s predecessor, Jan Brewer, had also pushed for more commercial activities at the state’s rest stops, to no avail. Ducey’s effort didn’t get off the ground, either.
The FHWA has little leeway to waive the long-standing rules, says FHWA spokesman Doug Hecox. “Existing laws related to rest areas have been in place for decades,” Hecox says. “We understand states’ interest in finding new ways of adapting new technologies to old practices, and are doing as much as possible within the limits of the law to help them.”
There have been several attempts in Congress to change the restrictions, but they have been overwhelmingly defeated.
Many groups, including the National League of Cities, truck stop owners, hotels, restaurants and gas stations continue to oppose looser rules. They claim commercialized rest areas would eliminate jobs, hurt existing businesses at highway exits, deprive localities of tax revenue, force customers to pay higher prices and reduce parking capacity for trucks.
As the debate continues in Congress, Cuomo, the New York governor, tried to push those federal rules with rest stops as well. As part of his tourism initiative, he rolled out two rest stops along interstates that included shops for goods produced in New York. But those rest stops were not among those that had been grandfathered in by the 1956 law, so they have to follow rules for newer rest stops that only allow for sales via vending machines.
So FHWA told the Cuomo administration it could not operate the shops at rest areas. Last year, New York switched from over-the-counter sales to self-checkout kiosks in two rest stops at stores promoting local goods at two rest stops. As part of the agreement, the state also had to scrap plans to introduce more stores at other rest stops.
One approach that states have been able to use to generate extra money for their rest stops is advertising that cannot be seen from the highway. Geico, the insurance company, in particular, now sponsors “safe phone zones” at rest areas in eight states.