May 6, 2007

RALEIGH – Burlington could focus more attention on essential city services by getting out of the golf-course business. That’s the key finding in a new John Locke Foundation Spotlight report.

“The city-owned and –operated Indian Valley Golf Course lost almost $700,000 in the last four years,” said Dr. Michael Sanera, JLF Research Director and Local Government Analyst. “The annual loss of more than $170,000 per year doesn’t include property taxes which private owners would have to pay on the same property. As city-owned property, the course generates no tax revenue.”

The 66-acre golf course does more than drain city funds, Sanera said. He and co-author Michael Moore, a JLF research intern, found that Indian Valley uses tax dollars to generate unfair competition with private businesses.

“Ten private golf courses pay property taxes that benefit Alamance County, while one city-owned golf course drains tax revenues and benefits only those few golfers who use it,” Sanera said. “If you count other private options in the immediate area, Indian Valley unfairly competes with 14 private golf courses.”

Burlington makes a mistake that’s common to all local governments that own golf courses, Sanera said. “It’s no different from a local government operating a sporting goods business with a $170,000 annual tax subsidy,” 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.”

There’s no good reason for Burlington taxpayers to continue throwing money at sand traps and fairways, Sanera said. “Nothing against golf, but many cities consider it more important to spend scarce tax money on police and fire departments and improving streets,” he said. “If the city sold Indian Valley, 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 Burlington’s bottom line, Sanera said. “The sale price itself would boost the city coffers,” he said. “The city and county would then benefit from annual property taxes, a benefit that might prevent future tax increases.”

Dr. Michael Sanera and Michael Moore’s Spotlight report, “Burlington’s Loss Factory: 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 [email protected]. To arrange an interview, contact Mitch Kokai at (919) 306-8736 or [email protected].