Minneapolis - Golf is a game. It’s entertainment. “It’s a good walk spoiled,” Mark Twain said, apocryphally. Could government provide a service that’s less essential? It’s hard to imagine.
Nevertheless, the Minneapolis Park and Recreation Board (MPRB) runs six golf courses just in the city alone. Many times, these courses made money, but those days are gone. The MPRB recentlygot a report from a Golf Convergence, a consulting firm, that contained some stark truths. Since 17 years ago, the number of rounds played at public courses has plummeted 46%, and the courses need $14 million dollars of renovation just to maintain the status quo. To turn things around, the report said the Park Board would have to spend $34.5 million on the courses.
It’s not that I think that everything should be left to the free market. I love parks and libraries! Sometimes public ownership make sense. But for a lot of things, private ownership is the best system, and people should pay for what they use. An activity should be subsidized (or taxed) in proportion to how it benefits (or harms) bystanders.
And what are the external effects of golf courses? The vast, manicured lawns are nice to look at, but the herbicides, fungicides, pesticides, and fertilizers wreak havoc on other vulnerable organisms (sometimes humans). They use a stupefying amount of water. The 2.5 billion gallons of water used each day to irrigate the world’s golf courses is more than enough to support every person in Asia. The external benefits of the beautiful courses are mostly captured by the folks who own nice homes nearby. Municipal golf courses are good for golfers and nearby property owners, and bad for pretty much everyone else. This is all to say that it doesn’t look like golf courses’ net effect on society justifies a subsidy.
It’s not about being pro-golf or anti-golf. This is how the consultants at Golf Convergenceframed the issue:
“To what extent should a governmental entity subsidize the leisure of a recreational asset that is utilized by less than 15% of the population whose average age is 41.5 years of age, who have median household income of $85,800, and 80% of which are Caucasian?”
What a nice, pointy question! But the economist in me wants to pare down the question to something like this: “When should we use city-owned land for golf and not something else?” A thrifty response would be, “If and only if using the land as a golf course is more valuable than any alternative.”
It’s important to consider all possibilities. If you just look at the revenue and expenses of a golf course, then you’ll only see part of the picture. When we choose to devote land to playing golf, we’re giving up the profit that would come from the best alternative. That’s what economists call the opportunity cost of a venture. Even if the city golf courses were financially sustainable, we might be leaving money on the table if there were a better use for them.