Free Market

Utah is in the Business of… Golf?

With the development of the Lake Golf Course at Wasatch Mountain in 1967, the state of Utah began ownership and operation of golf courses. Since that time, an additional five government-run courses have been developed around the state. None of them justify the subsidy of taxpayers to drive down the cost for those who desire to use these courses.

Worse, poor planning has placed these golf courses away from any large population of regular golfers, thus requiring marketing and other efforts to attract golfers who live long distances away and must travel long distances to reach the course. For this reason, among others, all of the courses have been experiencing a decline in use. Now is the time to sell them off and extricate the state from an area of enterprise in which it may not legitimately operate.

In 2012, the state commissioned a report from National Golf Foundation Consulting “to assist with evaluating the Utah State Parks golf system and to make recommendations to help ensure the long-term viability of the golf program.” Their core findings highlight the “competitive disadvantages” of the government-owned golf courses, and point to six key areas of deficiency:

  • Golf facilities with remote locations that are not proximate to golfer populations;
  • Inadequate resources devoted to marketing and promoting the golf facilities;
  • High labor cost in proportion to total expense;
  • Lack of “entrepreneurial” focus within the system (improving in 2012);
  • A rigid pricing schedule that lacks the flexibility to be adjusted in response to changing market conditions; and
  • A high level of debt service (over $1.0 million per year) that will likely not be covered by golf revenues generated by the facilities.

The report further advises, “The basic oversight and structure of the Utah State Parks golf system needs to change to become more entrepreneurial and allow the golf system to be run more like a business and less like a public accommodation.” As part of this desire to see more entrepreneurialism within a government-run business, a recommendation is made to employ a government “Director of Golf” to oversee the report’s findings while retaining all golf courses under government ownership and control.

As noted by the Utah Taxpayer Association, several municipalities around Utah also own and operate their own golf courses. They write, “With taxpayers hurting, and the economy still recovering, there is no better time than the present for the state, cities and counties to stop taxpayer-funded subsidies for rounds of golf.” As part of their recommendation to privatize, the UTA further noted:

In FY 2010, Utah taxpayers provided a net operating subsidy of $1.96 million to these golf courses and their accompanying state parks. There is simply no rational justification for taxpayers to subsidize rounds of golf. In fact, the state can and should lease or sell these golf courses to the private sector. Leasing the operations of these parks would provide the state with increased ongoing revenue of approximately $2.32 million.

First, taxpayers would not have to provide the $1.96 million subsidy. Second, the state would receive an annual payment from the golf course lessee that would likely equal 10 percent of the golf courses’ total collections. Even assuming that a private provider would not be able to attract greater participation at these courses, a dubious assumption at best, Utah would stand to receive an annual $360,000 payment from the private lessee.

Lawmakers need to take off their economic developer hats and realize that their only legitimate function is to secure the life, liberty, and property of citizens. Theirs is not the task to use coercive taxation as a slush fund for their central planning activities. If Utah’s conservative political leadership truly believes in the free market as they so often claim, then they should strongly and immediately support privatization of these courses. It’s one thing to favor government ownership of pre-existing natural wonders through a system of state parks, and quite another to support the government’s creation, operation, and debt-based financing of sport facilities.

The 2012 report disagrees with privatization, but admits that the government-run golf system is only “viable to cover its basic operating expenses, but not capable of covering full debt service.” In other words, those who reject privatization are requiring taxpayers to continue to subsidize rounds of golf for an extreme minority of citizens (and out-of-state tourists). This violation of the free market should be quickly corrected, and taxation should be used only in fulfillment of government’s proper role—golf, of course, falling well outside that narrow scope.