State Owned Golf Courses Are in the Hole
By Ian Nemelka
State officials in Utah are planning to bid off their publicly owned golf courses to private managers. Although this movement has been ever present in the minds of a few citizens for the last several years, most Utahns are now only becoming aware that the state owned golf courses to begin with. In an effort to drive economic development in certain areas, the state had invested in and continues to manage a total of four courses in Utah—Green River State Park Golf Course, Palisade State Park Golf Course, Lake and Mountain Courses at Wasatch Mountain State Park, and the Gold and Silver Courses at Soldier Hollow. The problem is that more often than not, these courses are losing money rather than making it, and the taxpayers in Utah are forced to pay the balance.
Subsidizing the game of golf seems potentially detrimental, especially considering its popularity with the millennial generation is falling, and many Americans feel that the sport somewhat “elitist.” Although conceived with good intentions, these state managed courses seem even more adverse when analyzing the costs. The average subsidy per round of golf varies significantly. At Green River, that subsidy is more than $65 per round, while the operational side of the Wasatch course is actually profitable. Because Wasatch has significant capital debt, however, taxpayers still provide a large subsidy.
These kinds of projects are implemented more frequently than you would think. In fact, the practice is not exclusive to state or the national government. Many cities and townships conceive, again with good intentions, burdensome projects which too often do not even benefit the demographic or industry they were meant to help. This is not to say that local efforts to solve issues are in vain. On the contrary, local solutions are often the best solutions. When entrepreneurs eventually offer to burden the risk of an otherwise failing business, however, the powers that be should take it as a sign that the project was potentially premature.
If an activity is desirable, the market will provide it. If an activity is undesirable, the market will let it die. The same principle of demand which results in two Starbucks being across the street from one another also applies to gyms, car washes, ski resorts, and yes, golf courses. If private entities want to take on the financial responsibilities and risks of managing these courses they should be allowed to do so. If not, taxpayers in Utah will be forced to subsidize rounds of golf for years to come. The Utah State Park system is among the best in the nation, but it’s high-time they let entrepreneurs play through.
Strata is committed to finding entrepreneurial and innovative solutions to a variety of issues from climate change, to local golf course management.