Tee Time for Taxpayers
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Taxpayers in Concord and Manchester are subsidizing local golfers. City-owned golf courses are not immune from the slow economy, and when they lose money, the city has to pick up the tab.
In Manchester, Derryfield Country Club has been losing money every year since 2007. Parks and Recreation officials say that the golf course and restaurant are bringing in more revenue than it costs to operate the place, but are losing money because of the expensive debt service payments stemming from recent capital improvement. Between the Derryfield and municipally owned JFK Memorial and West Side ice arenas, city taxpayers have subsidized the supposedly self-sufficient sports operations with more than $5 million so far.
In Concord, Beaver Meadow Golf Course is expected to lose $141,000 this fiscal year, and has lost money for the past several years. After years of bringing revenues into city coffers, taxpayers are now paying for other people to golf.
Even if these two municipally-owned golf courses were to turn a nominal profit, we should calculate the opportunity cost of leaving such a valuable property in city hands? Profits from good years not only have to outweigh losses from bad years, but also be larger than the tax revenues that a privately-owned golf course could generate. Which operations are subject to state business and Meals and Rooms taxes, and which are effectively given a subsidy through tax exemption? And is it proper for city-owned golf courses to compete against private courses?
There is also a middle ground to consider, which the State of New Hampshire and the City of Manchester have already explored. Lake Sunapee Ski Area is owned by the State, but run by a private company that pays for the privilege. After years of neglect and mismanagement, Sunapee is now thriving. Lawmakers have briefly considered outsourcing operations at Cannon Mountain. Manchester turned over the keys to McIntrye Ski Area three years ago to McIntyre Ski School Inc, which runs it as private enterprise even though the city still owns it. City officials in Manchester and Concord should consider to pros and cons of privatizing Derryfield and Beaver Meadow, if they can’t get themselves out of the golf business entirely.
If something can be done by the private sector, it should be done by the private sector. There is certainly no public obligation to provide golf courses or ski areas. Supporters might see such departments as revenue-raisers which can support more essential services. Maybe Manchester can open up a pizza place or a car dealership. Those could make money, but would be no more justified a function of city government.
Derryfield and Beaver Meadow aren’t the only golf courses to face financial pressure in this dreadful economy. But unlike most, they get to go to local taxpayers for a bailout. Now would be a very good time for local taxpayers to decide if this relationship should continue.
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