Muni-golf a handicap to city residents, who subsidize tens of thousands of rounds and carts annually
Minneapolis, MN — A Freedom Foundation of Minnesota analysis of city-owned golf courses throughout the state concludes that municipal golf courses lost approximately $2 million in 2007, the most recent year with comprehensive available data of municipal golf enterprise funds. At $50 per round, that’s the equivalent of about 40,000 rounds of taxpayer-subsidized golf a year. Click here to view the full report.
“Our scorecard shows that many muni-golf courses are teeing off on the taxpayers,” said Tom Steward, FFM investigative director. “City-owned golf courses are placing an ever-increasing financial handicap on many residents, who are subsidizing green fees and cart rides, whether they play golf or not.”
Of the more than 500 Minnesota golf courses, just over 100 municipal courses are owned by approximately 70 cities across the state and the vast majority of city courses lose money. While many city courses were built during a golfing boom in the 1980s and 1990s, the popularity of the game has declined steadily in the last decade, leading to fewer rounds, fewer green fees, and subpar financial results at many city-run links. The problems of struggling municipal courses are compounded by declining revenues at all levels of government and reductions in Local Government Aid (LGA).
The City of Moorhead, which lost $1,488,226 on its golf courses between 2003-2007, tops the FFM scorecard of top 10 municipal golf money holes in Minnesota. The city has not turned an operational profit in more than five years, and its taxpayers will be paying off golf course bonds until the year 2021. Golf spending accounts for 2.8 per cent of Moorhead’s 2009 budget, more than the information technology and library budgets combined.
“By competing with private enterprise, city governments also undercut small business,” Steward said. “Since government need not turn a profit, it can set artificially low prices, forcing taxpayers to cover the losses. Too often, it’s a case of lose-lose for taxpayers and small businesses.”
The negative trend recently led the city of Renville to get out of the golf game by selling Stoney Creek Golf Course to a local business. Between 2003-2007, the city’s operating losses approached $600,000 in a community of 1,200. Now taxpayers are off the hook, while the new owner expands operations. “There are definitely some benefits to the private sector,” said Paul McLaughlin, Renville city administrator.