By Janae Wilkerson | SMART Boise
An old buddy has a new business proposal for you: An outdoor swimming pool, he says. It will be great. People can swim all summer.
An outdoor swimming pool? Tell me more, you say, a bit skeptical.
Don’t worry, he says: “There are a lot of ways to make money! We’ll get people to pay a yearly fee to become members of our Pool Society, and that will pay for the upkeep. And then we’ll charge admission each time they actually come to swim. Oh, and we’ll charge every Pool Society member a mandatory, ongoing fee to help us maintain some swim teams. And charge them again if their kids join the swim teams. And if the pool doesn’t break even, we can just charge our members more to cover the difference! So many revenue-making opportunities: What do you say?”
RELATED: SMART Boise report reveals more than $144 million in wasteful spending by City Hall. Click here to download.
I imagine most of us would turn down this proposal. Common sense alone declares no swimming pool with such a business model would even find the funds to start, let alone become profitable.
Yet despite the obvious flaws, such a business model does exist. What’s more, you and I are both involuntary Pool Society members. We each pay yearly fees to run a system of outdoor pools and we pay to maintain pool swim teams, whether we want to or not. If we actually want to use the pools or join a swim team, we pay more.
Such are the facilities run by the City of Boise. Public officials have spent property tax money to build the facilities, make taxpayers pay to use them, then cover consistent yearly losses with more taxpayer dollars. Boise owns and operates pools, golf courses, an ice skating facility, and a crop farm, and nearly every one consistently loses money.
The City of Boise is not a savvy business owner: Boise’s unwise business practices directly contribute to property tax increases.
Overall, there are two factors that decide how high each resident’s property taxes are each year: The amount of money the city says it needs, and the amount of taxable property from which to draw that money. The city first decides how much to spend—to account for new programs, for maintenance, for swimming pool losses—which dictates how much tax money Boise needs to collect.
So the first way Boise’s business practices contribute to higher property taxes is obvious: Boise’s facilities constantly hemorrhage red ink, growing the city’s budget accordingly. If the facilities Boise runs were private businesses, they likely would have folded years ago.
Take Idaho Ice World, an ice skating rink Boise bought from private ownership in 2003. For each of the last five years, Idaho Ice World has operated at a loss. Admission fees bring in some revenue, but not enough people skate to cover operating costs: Over the past five years, the ice rink has lost more than half a million dollars. Boiseans’ tax dollars subsidize the difference. Thus, as an involuntary “ice rink member,” you pay an annual fee to keep the doors open, and pay Boise each time you actually skate.
Boise’s six public pools are sinking even faster. Not a single one makes money, and each pool’s annual loss ranges from $37,000 to more than $100,000. In the last half-decade, the city has spent more than $2 million tax dollars to keep its pools open. Furthermore, gyms and facilities with their own swimming pools pay property taxes that maintain their competitor’s—aka the City of Boise—pools.
The City of Boise is not good at managing facilities. After all, government spending, in a nutshell, means using one person’s money to buy something for someone else. The government has no monetary incentive to be careful about how much it spends, or the quality of the results. So the city’s experiments with pools, golf courses, farms, and ice rinks swell Boise’s budget and increase the amount of money taken from its residents.
Boise’s business practices directly increase our property taxes in another, less obvious fashion. The more property government owns, the fewer private properties there are to actually pay property taxes. Government-run facilities and properties owned by Boise don’t pay property taxes to Boise, despite being covered by city services such as police and fire. Thus, the more property Boise owns—dozens of properties and counting—the more upward pressure on property taxes for the rest of us.
The City of Boise shouldn’t act as a business management company, because it directly burdens city residents with higher and higher property taxes. Residents of Boise should say the same thing to the city government as they would say to an old buddy with a ridiculous pool scheme: “No.”
There are two things the city can do right now to fix part of this property tax mess: Boise City Council can call for a complete review of programs, facilities, and public lands that can be auctioned off to the highest private bidder. Selling government-owned facilities would get Boise taxpayers off the hook as involuntary “Pool Society” and “ice rink” members. Furthermore, the city should pledge to use the resurgence in taxable property to lower the tax burden for homeowners and other property-tax payers.
Finally, city councilors should pick up a copy of “Are you kidding me, Boise?” the SMART Boise analysis of Boise’s budget, to understand the plethora of areas where they can cut down wasteful spending.