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Some states profit, others lose on highway food and gas signs

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Posted at 12:48 PM, Sep 17, 2014
and last updated 2014-09-18 10:49:20-04

Blue highway signs let drivers know where they can fill up on gas, food and road trip essentials.

For most, the logos of common gas stations, fast food restaurants, hotels and attractions are a welcomed sign along roadways.

"I find them helpful on road trips," Taxpayer Jeremy Frutchey said.

Helpful for drivers, the signs can be much more than that for some states: A big money maker.

The State of Ohio partners with Ohio Logos Inc., and after the company receives a flat annual fee of $1.29 million, the Ohio Department of Transportation gets everything else. On average, it comes out to about $5 million annually — or about 80 percent of the profit.

Kansas contracts with Kansas Logos Inc. The state takes in 60 percent of collected fees with a guaranteed payment of $1.5 million a year.

Arizona began running its own blue sign program in 2012, which was previously administered by an outside vendor for 20 years. Arizona's program took in $1.4 million in fiscal year 2013 for its state highway fund.

But, an analysis by Scripps reporters found not all states are seeing the money pour in.

In Oklahoma, the state owns the highways, but despite owning the land, last year the Oklahoma Department of Transportation received about a fourth of the sign advertising revenue, or just more than $358,000. 

Kenna Carmon, a spokesperson for ODOT, says by law they must contract out the sign work to a private company.

"They pay for the signs, the maintenance, they do all the work for finding the companies," Carmon said.

Click here for more information on the blue sign program in Oklahoma.

Like Oklahoma, most states contract-out their blue sign business. Nearly half contract with Interstate Logos or a subsidiary.


Check out the map above to see how a company handles its blue highway sign program and how much money it is making from the program or click here.

Indiana Logo Sign Group has operated Indiana’s blue logo sign program since 1988. That's the same year the state last competitively bid the sign program.

ILSG keeps 90 percent of the revenue. The Indiana Department of Transportation receives the remaining 10 percent. The money goes to repair roads.

"It flies in the face of logic,” Jay Ricker, who owns 50 convenience stores throughout Indiana, said. “Somebody didn't use good business sense when they negotiated that and I think we're missing out on tens of millions of dollars."

Click here for more information on the Indiana program.

"This program began as one that had no taxpayer investment whatsoever," INDOT spokesman Will Wingfield, said. "Other states have made some investments using taxpayer dollars in the past. We're receiving more than we used to."

Wingfield explained that after Indiana Logo Sign Group won the contract in 1988, the company invested in the infrastructure for the program.

Documents obtained by Scripps reporters reveal Indiana Logo Sign Group grossed more than $63 million since 1988, when it signed its contract with Indiana. During the same time frame, Indiana received $2.75 million, and did not start receiving any revenue until 2007.

"They were the ones who invested their own money to build this program up from scratch," Wingfield said. "Since it started in 1988, it's always been a privately funded program."

Click here for more information on the Indiana contract.

Not all states enter in to contracts in a blue sign program. Arkansas organizes and oversees its own program and brings in $877,000 in revenue.

In Oklahoma, taxpayers said they want to see the state bring in those kind of revenue percentages.

"I think we need to negotiate better," taxpayer Sam Jones said.

"They're just giving away money," Frutchey said.

In Oklahoma, if the state wants to see more revenue, ODOT said that it would be up to the Legislature to decide if they want to revert on the state statute and change the program.
  
Scripps reporters contacted Interstate Logos, LLC and talked to the CEO of the Louisana-based company, Floyd Williams. He said the program revenue is often based on the size of the program in the state.

In Maine and Delaware, where the blue sign programs are small, both of the states do not receive any revenue. Missouri, which has a larger population, gets more money.

In most cases, the companies listed on the signs pay for the advertising.

In Oklahoma, companies spend roughly $1.4 million per year to get their logos on the highway signs. Indiana businesses pay among the highest in the country each year to be on the signs, $3,744 for four (two ramp and two mainline) signs at an interchange. That's not counting the initial fee to create the placard.

Lynn Walsh is a data content producer and investigative reporter on the Scripps National Desk. She may be followed on Twitter through the handle @LWalsh.