Free Market

Should Governments Operate Convention Centers?

In terms of design, functionality, and ambience, the Utah Valley Convention Center is impressive. Having operated for over a year now, the facility regularly hosts conferences, trade shows, and other events conducted by organizations looking for lots of room.

But the facility is a creation of government, financed on the backs of taxpayers to the tune of $41.8 million. Provo spent nearly $3 million to acquire part of the land needed, and Utah County acquired the rest, along with funding the creation of the structure. Taxpayers throughout the county are now obligated to pay back the debt over the next three decades.

Even the most conservative of Republicans have lavished praise upon the public project, struggling at times to contain the excitement over the potential economic impact such a facility may bring to the area. Increased hotel lodging, restaurant patronage, and spending at other businesses ultimately leads to more tax revenue to fill government coffers. “This is going to produce literally millions of dollars for this economy both in sales tax and economic benefits,” said Utah County Commissioner Gary J. Anderson. New businesses catering to tourists may open in the surrounding area, thus rejuvenating Provo’s downtown environment. Davis County’s convention center is justified and praised on similar grounds, as are others.

Davis County Commissioner Brett Millburn stated, “we are looking for the greatest return on investment.” Of course, government should not be run as a business, and seeing (coercively obtained) tax dollars as “investments” highlights the warped nature of public funding. Millburn continued: “We look at increases in visitorship at various sites in the county, numbers of individuals staying in our hotels, folks eating in our restaurants.” All this in an effort to recoup costs and justify the government’s creation of a business.

But Millburn’s response is also evidence of the entrepreneurial disease infecting the minds of government agents. Referring to privately owned businesses by the possessive pronoun ‘our’ shows the tyranny masked behind the veneer of economic development programs run by government. Hotels and restaurants do not belong to, nor should they be run at the mercy of, bureaucrats or members of the surrounding community.

The same arguments used to justify these economic development efforts throughout counties and cities were echoed throughout the halls of the Capitol earlier this year as officials from Salt Lake City and County pressured lawmakers to approve a tax incentive for a hotel and convention center. The proposal was narrowly defeated in the House by a majority that rejected government’s involvement in private business. Not anticipating their defeat, proponents of the project persistently claimed that it would be an economic boon to other businesses in the area—a “win win” idea that would benefit everybody.

But if the market would truly support such efforts, and be profited thereby, then individual actors would be able to find the funding—a true investment, not the taxpayer version—to make the project a reality. Those who don’t care, disagree, or otherwise object to the project would not be forced to help fund it as they currently must under the economic development regime imposed by governments throughout Utah.

Such “public” projects, financed by taxpayers, are a fundamentally unfair form of competition between the government project and privately owned competitors. The Utah Valley Convention Center, for example, opened up shop right across the street from the Provo Marriott Hotel and Conference Center.

Should governments throughout Utah operate convention centers? Perhaps a better question is: should governments be involved in economic development at all? The answer is apparent after reviewing the most simple of political principles. The defense of life, liberty, and property are the beginning and end of the proper role of government; taxing many people to benefit a select few falls far outside this narrow scope, and must therefore be rejected.