Salt Lake City golf courses in the rough

When a golf course falls on hard times, then what?

If the golf course is privately owned, the owners figure out the answers, or they lose their business. They alone are responsible for covering their financial obligations or finding private investment options to fund improvements.

That’s the nature of the free market. If an area has too many golf courses, then those that find ways to survive stick around, and those that don’t succeed go out of business. It’s fair, and it’s a level playing field.

On the other hand, a government-owned golf course operates without having to pay taxes – a market advantage over its privately operated competitors, which always have to pay taxes.

Also, when government enters the golf course business, as is the case when it joins any industry, taxpayers pay to build the courses. Then, if there are revenue shortfalls, they might have to cover the maintenance and improvement of those courses via tax increases, as is the case with the 2011 $1.4 million “subsidy” for Salt Lake County’s six golf courses.

And that is one of the options Salt Lake City is considering to pay for 66 improvement projects for its nine city golf courses. (By the way, if you’re keeping score at home, that’s 15 city or county golf courses in Salt Lake. How do you think private owners feel about that competition?) According to a June 6 KSL report, Salt Lake City’s options for covering the $22 million needed for the 66 projects are:

  1. Increase the cost to play at the city courses
  2. Bond taxpayers for all or part of the $22 million
  3. Sell surplus golf course property (worth an estimated $15.5 million)
  4. Shut down one or more of the city’s golf courses

Interestingly, in a KSL report from a year ago, city officials stressed that raising taxes (bonding) or green fees was not desirable:

[Salt Lake City Golf Manager David] Terry says the plans do not involve raising taxes. In fact, they are not subsidized by any taxes. “We’re not looking for any kind of handout, and we also don’t want to raise green fees. Anytime we raise green fees, that shrinks our market.”

And, from the June 6 article, “In a letter sent May 24 to [Salt Lake City Mayor Ralph] Becker and the City Council, the Salt Lake City Golf Enterprise Fund Advisory Board opposes the idea of charging more to play at city courses.”

That also tells us that if government gets into the golf course business, then it must also create more government to advise the government golf course people, via the Salt Lake City Golf Enterprise Fund Advisory Board, or the SLCGEFAB.

Salt Lake City Mayor Ralph Becker is also getting in the mix by sponsoring a study group “to improve the long-term viability of city golf courses.” The KSL article quotes the mayor’s spokesman: “A broader analysis needs to take place to evaluate the future of municipal golf courses. It’s the mayor’s goal to come up with a long-term strategic plan for golf courses, without any predisposition of what that might look like.”

This is what government growth looks like. Mayors and advisory boards and study groups (paid for by taxpayers) all struggling to find answers to the same problems that private industry wrestles with (at no taxpayer expense).

So, obviously, options 1 and 2 aren’t preferred. What about No. 3, selling surplus golf course property? A KSL piece from May 2010 reports the idea of selling land isn’t very popular either:

The proposal to sell off open space was not a big hit when it was outlined to the city council, but it’s an option that remains on the table.

“The city has always had a tremendous commitment to open space and preserving open space,” said Wendy Fisher, executive director of Utah Open Lands. “That’s part and parcel of why they have a policy of ‘no net loss’ of open space. So I can’t imagine that they would change that in a way that would take away meaningful open space.”

“We would much rather not have to sell property and we’re hoping we can work with the city council to avoid that,” Terry said. “But we have a responsibility to present a plan that generates this funding without asking for a handout from tax money.”

So if increasing playing fees, bonding taxpayers, and selling land aren’t very attractive options, then that leaves closing down one or more of the courses. That’s not very appealing either. That means city employees lose jobs.

But that’s what can happen when government enters private industry. If the free market supported 15 city and county golf courses, then there would be no issue. And, for years, it appears the economy has supported it. But now the economy has declined, and government in the Salt Lake area is stuck with financing 15 golf courses when the city and county have so many other pressing needs.

If these 15 courses were privately owned, this struggle would still occur, but taxpayers wouldn’t have to pay the bill and government wouldn’t have to choose between financing golf or something else more important.

Organizations in the private, free market have to be lean, smart and prudent or they go out of business. And that makes for a more stable, efficient economy for our community.

But when government plays the game, it can always go to taxpayers to cover its mistakes, all the while putting unfair pressure on private owners because of government’s inherent tax advantages. And if tax hikes aren’t politically popular, then government might have to shrink. That is painful for those employees, but if government hadn’t grown too much to begin with, the cutbacks wouldn’t have to happen.