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Gastonia should end golf subsidy

Public course loses money, hurts competition

Contact: Dr. Michael Sanera
919-828-3876
msanera@johnlocke.org

September 20, 2007

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RALEIGH – Gastonia should get out of the golf-course business and focus on providing essential city services. That’s the key recommendation in a new John Locke Foundation Spotlight report.

“The Municipal Golf Course of Gastonia lost more than $1.2 million over the last five years,” said Dr. Michael Sanera, JLF Research Director and Local Government Analyst. “The annual loss of more than $250,000 per year doesn’t include property taxes which private owners would have to pay on the same property. The city-owned property generates no tax revenue.”

The golf course is more than a drain on city funds, Sanera said. He and co-author Michael Moore, a JLF research intern, found that Gastonia’s city-owned course uses tax dollars to generate unfair competition with private businesses.

“In the Gastonia area, there are eight privately owned golf courses that pay property taxes that benefit Gaston County and one city-owned golf course that drains tax revenues and benefits only those few golfers who use it,” Sanera said. “In fact, when the taxpayer subsidy is added to the green fee at the Gastonia Municipal golf course, the true cost of a round of golf is $29.50. The higher fee is comparable with some of the more exclusive private courses in the area that are open to the public.”

Gastonia’s problem extends to any local government that owns a golf course, Sanera said. “It’s no different from a local government operating a Mercedes dealership or Tiffany’s jewelry store,” he added. “Most citizens would consider that unfair competition with private business. No one would be happy to see that type of business operating at a loss while offering a benefit to a very small number of people.”

Most taxpayers would object to government schemes that divert their money to small interest groups, Sanera said. “What would happen if an elected official suggested that the city devote 200 acres of city land and spend nearly $254,000 per year for a polo field that benefits a very small number of Gastonia polo players?” he asked. “I don’t think she would be re-elected. But the mayor and city council are doing just that for the Gastonia golfers.”

There’s no good reason for Gastonia taxpayers to continue paying the bills, Sanera said. “Unlike police and fire protection, golf is not an essential city service,” he said. “If the course were sold, city taxpayers would gain the amount of the sale and avoid paying its annual operating losses. As a privately owned operation, the course would contribute to the city and county tax base.”

Selling the golf course could have a major impact on the city’s bottom line, Sanera said. “The sale price would bring a hefty sum and boost the city coffers,” he said. “The city and county would then benefit from annual property taxes, a benefit that might help stave off future tax increases.”

Dr. Michael Sanera and Michael Moore’s Spotlight report, "Gastonia's Golf Losses: The city government has no business being in the golf business," is available at the JLF web site. For more information, please contact Sanera at (919) 828-3876 or msanera@johnlocke.org. To arrange an interview, contact Mitch Kokai at (919) 306-8736 or mkokai@johnlocke.org.

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