Stopped in its tracks
Rapid response and united effort ground North Carolina sales tax
In a state known for being first in flight, North Carolina’s golf groups flew into action a couple of months ago when they got wind of a golf sales tax being talked about in the legislature.
“Our first alert on the sales tax came from the CEO of Charlotte Country Club in late June,” says Chuck Borman, CAE, executive director of the Carolinas Golf Course Superintendents Association (CGCSA), who received an e-mail from Damon DiOrio about the rumors. “We had to move quickly because budget discussions were underway for a scheduled budget completion in little over a month.”
Besides a time crunch, there was no specific bill for a golf sales tax, or for what eventually became known as the recreation and entertainment tax. “It was only part of a laundry list of options that were being bandied about among legislators,” says Del Ratcliffe, PGA, president of the North Carolina Golf Course Owners Association and of Charlotte-based Ratcliffe Golf Services, Inc. “Nothing was in writing. It was all just talk, but they were talking about a 7-7.5% tax on all participatory sports.”
North Carolina was facing a $4.6 billion shortfall so everything and anything was on the table to balance the budget. Ron Schmid, executive director of the Carolinas PGA Section, says the government was looking for $1.6 billion in new revenue.
North Carolina golf and club interests had formed a loose alliance several years ago for the purpose of holding an annual Golf Day in Raleigh, the state’s capital, so “the nucleus for mobilizing on issues like a sales tax were already in place,” according to Ratcliffe. In fact, a Golf Day had been held in May.
“But we had never been forced to act so quickly before and in a way that required such coordination and collaboration,” he says. “This was all new territory for us.”
On June 23, the first e-mail blast went out to all interested parties, including course owners, superintendents, the Carolinas PGA Section, amateur golf organizations, and club managers, asking for their participation to oppose the tax. The first meeting was held via conference call on June 29 about developing a plan of action. Prior to the meeting, Chris Valauri, CGCSA lobbyist, had gathered as much information as possible about the rumored tax.
According to Borman: “Del agreed to ramrod any communications campaign because course owners really had the most to lose in this fight.”
In only four days, Ratcliffe and his staff had up and running a Web site (www.golfkeepsusgoing.com) with downloadable talking points, sample letters to legislators in both houses, video clips of golfers talking about the problems a tax would cause, and sign-up sheets for course owners to display at their counters so players could register their opposition.
“We initially inundated the legislature with e-mails, but we weren’t sure how many of those got through or were actually read,” says Schmid. “That’s why we went with the sign-up sheet that we provided to every golf facility in the state with a PGA professional presence, which is about 70% of all golf facilities in North Carolina. In less than a week, we faxed more than 100 two-column pages of signatures to the capitol. Each time, I’d get ready to send the sheets, another completed page would turn up on my fax machine. The response from golfers was tremendous in opposition to the tax.”
Golf also took its game to Raleigh on July 14 to meet with legislators, particularly with budget and finance conferees in both the House and Senate. “Our communications were intense, and legislators heard from us loud and long,” says Ratcliffe.
Golf courses across the state were already cutting prices in an effort to maintain the same volume of business. Any additional obstacles would only worsen golf’s struggle.
“We lost some courses and others could follow,” says Borman. “Golfers were telling us they were playing as much golf as they could based on their household budget and current economic conditions, and that a tax would create more pressure to eliminate such discretionary activities.”
“The biggest stumbling block in persuading legislators about golf’s plight was that they had little information about the industry and how extensive it is in North Carolina,” Ratcliffe says. “They simply didn’t understand the detrimental consequences of such a tax on an industry that’s larger than any agricultural industry in the state and as big as technology.”
“Fortunately, and this was critical to our eventual success as an alliance, we had recently completed an economic impact study of the golf industry in North Carolina,” says Schmid. “This gave us the facts in a concise format to show legislators and prove our case of how important this industry is to all the people of North Carolina, not just golfers.”
According to the 2007 study by SRI International, which was spearheaded by the CGCSA, golf has a total annual impact on the state of $5.3 billion. And it supports almost 70,000 jobs. In addition, charitable giving attributed to golf exceeded $132 million.
“Golf is an economic engine in this state, but all of this was in jeopardy,” Borman asserts. “Legislators were talking about giving tax incentives for industries to move to the state, but, at the same time, they were considering taxing one of the state’s biggest existing industries. It just didn’t add up.”
In the end, the campaign was successful. The governor signed the budget in late July without the recreation and entertainment sales tax.
“In just two weeks, we were able to turn the tide,” says Borman. “Even if the tax had passed, golf wouldn’t have been included.”
Adds Ratcliffe: “No question that without the campaign, there would be a sales tax on golf…and on all participatory sports…right now in North Carolina. Golf really led the way in this fight.”
While the wings of a sales tax have been clipped for now, revenue projections for North Carolina don’t look good for next year, and Borman says the issue could take off again.
“At least we now have the foundation for a more formal alliance,” he says. “We proved the importance of having such an entity, and hopefully those who still aren’t members of one of our organizations will see the value in joining us.”
All indicated that the informal alliance could become more structured in the coming months, especially since other issues affecting the industry, like water usage and property tax valuation, are on the horizon.
“Now we are ready to act rather than react,” says Schmid in summing up this latest victory for golf and in looking to the future growth of golf in North Carolina.