September 19, 2007

RALEIGH – Goldsboro could devote more money to essential city services if taxpayers stopped subsidizing local golfers. That’s a key finding in a new John Locke Foundation Spotlight report.

“Goldsboro Municipal Golf Course lost more than $2.7 million over the last six years,” said Dr. Michael Sanera, JLF Research Director and Local Government Analyst. “The loss of more than $450,000 per year doesn’t include property taxes which private owners would have to pay on the same property. The city-owned 97-acre course generates no tax revenue.”

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

“The taxpayer-subsidized golf course competes with seven privately owned golf courses in the area,” Sanera said. “Several of these courses offer green fees that are competitive with the city golf course even without the taxpayer subsidy. In fact, when the taxpayer subsidy is added to the green fee at the Goldsboro municipal course, the true cost of a round of golf is about $39 for 18 holes. The higher fee is comparable to some of the more exclusive courses in the area that are owned privately but open to the public.”

Goldsboro’s problem extends to any local government that owns a golf course, Sanera said. “The city-owned course is not on the tax rolls, unlike the four privately owned golf courses in Wayne County,” he added. “Imagine how you would feel if you owned a sporting goods store and you were being made to support a city-owned competitor that offered sporting goods at a lower price because of a $450,000 tax subsidy each year.”

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 97 acres of city land and spend $450,000 per year for a polo field that benefits a very small number of Goldsboro polo players?” he asked. “I don’t think he would be re-elected. But that’s what elected leaders are doing now for Goldsboro golfers.”

There’s no good reason for Goldsboro taxpayers to continue paying the course’s 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. “According to the Wayne County tax assessment, the municipal golf course is worth $1.2 million dollars,” he said. “If the course were sold at the assessed market value, the city would gain $1.2 million that could be used for other projects. The city would also have $450,000 more each year for essential services because Goldsboro taxpayers would no longer have to cover the golf course’s operating deficit.

“Finally, by transferring the land to the private sector, the land would be returned to the tax rolls,” he added. “With the current tax rate of Goldsboro and Wayne County, the course would generate about $16,900 per year in property taxes. “

Dr. Michael Sanera and Michael Moore’s Spotlight report, “Goldsboro in the Rough: 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].