March 27, 2017

Why Does the Florida State Legislature Keep Subsidizing the World Golf Hall of Fame?

House Bill (HB) 7005 preserves the state subsidy for the World Golf Hall of Fame while seeking to eliminate a range of tax credit programs provided through Enterprise Florida. The justification for retaining the state subsidy for the World Golf Hall of Fame is unclear at best, and raises the question of what criteria the House used in determining which tax credits to propose for elimination and which to preserve. State return on investment, it appears, is not the benchmark being used by the Florida House of Representatives.

Florida taxpayers give the World Golf Hall of Fame $166,666 per month, for a total of $2 million a year. During the 1998 legislative session, the state committed to a total of $50 million in subsidies for the facility to be distributed over a 25-year period.

Compared to the state’s economic development programs including sports and sports-related programs currently receiving state subsidies, the World Golf Hall of Fame is one of the worst public investments. According to the Office of Economic and Demographic Research (EDR), the economic research arm of Florida’s Legislature, taxpayers lose 8 cents on every dollar invested in the facility. HB 7005 eliminates state subsidies for the International Game Fish Association World Center facility, the only program with a lower return on investment than the World Golf Hall of Fame.

The World Golf Hall of Fame also performs poorly on non-financial performance measures. In return for the state subsidy, the facility is expected to attract least 300,000 out-of-state visitors annually. In reality, the facility never achieved this target. From 1998 to 2009, the number of out-of-state visitors totaled less than 300,000 per year, according to the Office of Program Policy Analysis and Government Accountability. EDR found that out-of-state visitors from 2010 to 2013 totaled less than 40,000.

Transparency in the monitoring and evaluation of the World Golf Hall of Fame is also a concern. The facility must be recertified every 10 years to maintain the state subsidy. In 2009, despite failing to meet its performance targets, the facility was recertified. In lieu of continued state subsidy, the facility was required to increase its annual advertising budget from $2 million to $2.5 million. The additional $500,000 was to be allocated for generic Florida advertising. While the facility claims that it spent $3.1 million annually in generic Florida advertising from 2010 to 2013, this amount could not be verified.

The Speaker of the House has made funding transparency a major issue. Repealing economic development programs because they don’t provide a return on taxpayers’ investment makes sound financial sense. HB 7005 eliminates a host of economic development programs, some of which generate a return for taxpayers. The state cannot put itself in a position again to be financially tied to a tax-sucking enterprise for decades to come.

From an abundance of generosity, we will presume that the Legislature is contractually unable to stop funding the World Golf Hall of Fame. In that case, it should not be recertified in 2019. Then the Legislature can pull the financial plug. This should serve as a lesson to inform future contracts with attractions that are too big to fail.

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