FFM Bulletin 8/11/10

The Star Tribune ran a piece over the weekend about the plight of municipal golf courses in Minnesota. With more than 100 municipal golf courses operating in Minnesota, it’s great to see some media scrutiny on these operations. Unfortunately, the piece helped perpetuate several myths about our states’ many taxpayer-funded golf courses.

The article suggests that many municipal courses “are not funded by property taxes” but instead operate as “self-supporting enterprise funds.” However, in 2008, the most recent year for which comprehensive enterprise fund data are available, these so-called “self-supporting enterprise funds” reported operating losses of $2,708,356. Only twelve cities reported operating profits, and those profits were modest.

The piece also suggests that these financial woes are a recent phenomenon, brought about by a combination of a struggling economy and bad weather, saying that “courses that are supposed to be self-supporting have suddenly plunged into the red.” In reality, red ink is nothing new to government-owned golf courses in Minnesota. In fact, the vast majority of city courses lose money every year. In 2008, municipal golf funds lost $2.7 million. In 2007, they were $2 million in the red. In 2006, it was $2.3 million. In 2005, municipal courses lost more than $2.7 million. You get the picture.

And finally, the Star Tribune article cites the example of Edina’s Braemar Golf Course, which the city says “still makes money … but it doesn’t make enough to pay debt service tied to a 1993 expansion and renovation.” In other words, it doesn’t make money. If local governments insist on competing with the private sector, then they need to accept that basic economic principles apply to them. When government borrows money to build a swimming pool or construct a broadband network or expand a golf course, they need to pay that money back. If they’re unable to do so without additional subsidies or higher taxes, then that operation is not a financial success.

The fact is that when these operations lose money, taxpayers are on the hook, forced to subsidize someone else’s round of golf. Just something to keep in mind the next time big government advocates claim that local governments have already “cut to the bone.”

For more information, see FFM’s 2009 report, Municipal Golf Operations in Minnesota: Teeing Off on Taxpayers.

Check out the most recent FFM Accountability Alert, which takes a detailed look at another area where too many local governments are wasting your money: bookmobiles. A number of local governments around the state continue to operate these outdated and inefficient mobile libraries. In St. Paul, the bookmobile costs taxpayers almost $300,000 per year, despite a Freedom Foundation review finding that the vast majority of the bookmobile’s stops are in close proximity to branch libraries.