RALEIGH – With the country slogging through recession and governments facing big deficits, officials in various North Carolina communities are still talking about new ways to keep government-owned convention centers, recreational businesses, and other enterprises afloat. Not that I’m trying to remind anyone of Western civilization’s near-death experience of the late 1980s, but are these yahoos serious?
I’m using the term “yahoo” in the original, Swiftian sense of irrational creatures who dig in the mud for pretty stones.
It never made sense for North Carolina localities to start and operate businesses in competition with private venues and attractions. But in the present circumstances, the senseless has become the defenseless. It is crucial that governments limit their activities only to core responsibilities that can be financed at current tax rates.
City-owned convention centers fail that test. Whatever the merits of pooling the resources of local hotel and restaurant operators to subsidize conventions and shows they think will draw out-of-town crowds to their establishments, taxpayers should not be forced to invest in such a speculative enterprise. If private firms and trade association want to do so, fine. If some hotels and restaurants refuse to participate in the plan, that’s not the public’s problem.
Taxpayer subsidies for sports, recreation, and leisure enterprises also fail the test. These activities compete with private firms for audience, advertising, and memberships. In JLF’s City & County Issue Guide, Michael Sanera explains the core of the problem:
Across North Carolina, many private recreational centers provide swimming pools, golf courses, gyms, and other athletic services. These facilities are the source of income for many North Carolinians. When parks & recreation departments operate similar facilities, they threaten the business of these citizens. P&R departments have an unfair advantage over private sector services because they have access to tax dollars. They also do not have to pay taxes on their facilities and land as private sector businesses do.
Public facilities also compete with private non-profit firms, such as the YMCA. These organizations rely on user fees and private charitable donations to stay open and pay employees. Competition from taxpayer-funded P&R departments is harmful and unfair.
Come on, folks. North Carolina governments have promised spending that exceeds expected revenue by billions of dollars. One of the responses must be to shrink public budgets. There aren’t two sets of rules, one for government and one for everyone else. When times are tough, you make a priority list, fund the ones on the top, and reduce or eliminate your expenditures as you go down the list.
Convention centers, recreational facilities, and similar activities are way, way down the list. Public officials should be seeking the fastest way to get out of these businesses, not trying to prop them up in expectation of some future when they will suddenly become viable. They won’t.
Hood is president of the John Locke Foundation