NCPA - National Center for Policy Analysis

STRAPPED-FOR-CASH MUNICIPALITIES SHOULD SELL UNPROFITABLE ENTERPRISES

September 2, 2004

Instead of blaming budgetary shortfalls on a weak economy, Michigan government officials should look at their own unnecessary spending, says John R. La Plante of the Mackinac Center, a think tank in the state.

One municipality that is a good example of the need for reform is Traverse City, which is currently beset with almost a million dollar budget shortfall. Plante says the city doesn't have to look past its government-run Hickory Hills ski area:

  • Nearly 9 percent of the city's deficit is attributable to the money-losing ski resort.
  • Hickory Hills loses money because it sells tickets for below-market rates -- even neighboring non-profit ski hills charge about 3 times as much for daily lift tickets and season passes.

Plante says that owning and operating recreational facilities is at best a low priority of government, particularly in a region where there is a wealth of commercial and non-profit facilities are available.

The sale or privatization of the city's Hickory Hills ski area provides a sterling opportunity for the city to begin to get its financial house back in order, concludes Plante.

Source: John R. La Plante, "Cities that Cry Poverty Should Sell Their Money-Losing Ski Areas", Mackinac Center for Public Policy, July 2004.

For text http://www.mackinac.org/article.asp?ID=6686

 

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