Taxpayer-funded Heritage not where we should go

March 27, 2011 

Beaufort County Councilman Stu Rodman gets credit for trying to solve the Heritage sponsorship dilemma.

But his idea to use state and local tax dollars to tide over the golf tournament for the next five years -- or until a title sponsor or sponsor can be found -- is rife with problems of its own.

That leads to the question: How much time and energy should we spend going down this path -- even as a last resort?

Rodman's idea is to put together a $30 million mix of mostly government and some private funding for the tournament. Under his proposal, the Town of Hilton Head Island would put up $7 million; Sea Pines Resort, where the tournament is held, $3 million; the county, $2 million; and the state, $18 million.

He says about $6 million a year for five years is needed to guarantee the tournament's purse. In return, he says, contributors could receive television advertising time to promote tourism and economic development.

Rodman is pushing to get this plan pulled together and the county on board by late April, when the Heritage Classic Foundation's contract with the PGA Tour ends.

He cites the tournament's $81.9 million overall economic impact and its $4 million in local tax revenue and $8.5 million in state tax revenue as reasons to justify government participation. The town and county are kicking in $1 million each for this year's tournament.

The first hurdle is whether the PGA Tour would go for this idea. Tour officials have indicated they are not high on a tax-supported tournament.

The next big hurdle is state participation. Gov. Nikki Haley has repeatedly said she does not want taxpayer dollars going to sponsor the tournament, and the two state agencies Rodman's plan would turn to -- the departments of Commerce and Parks, Recreation and Tourism -- are cabinet agencies under her purview.

Rodman sees the state participation coming in two ways: the Commerce Department recruiting companies to split a $9 million media buy over the five years and PRT committing $9 million -- or $1.8 million a year -- to promote South Carolina tourism and economic development.

Let's put that proposed tourism department commitment in perspective. The agency's total marketing budget is about $5 million a year. More than half of that goes for digital marketing. About $500,000 to $600,000 is spent on television advertising, according to the agency's spokesman, including $180,000 to $190,000 for golf advertising, mostly on cable golf channels.

Most of the television buys are in spot markets as part of a multimedia plan for a targeted area.

The question: If finite marketing dollars are shifted to the Heritage, what else won't get done?

That same question goes for local government participation. If we're not raising taxes to do this, what area of spending will be cut to make up the difference?

Hilton Head Mayor Drew Laughlin said, "(The tournament) is important enough to this town that if this means the difference (between) having a tournament and not having a tournament, I'm confident Town Council would approve a substantial commitment to the tournament. ... But there is a point where it becomes fiscally irresponsible to do so, and I'm not sure what that number is."

That number should be nailed down, and even then, we must realize that it could change as circumstances change. Are we prepared to have the county and the town contractually obligated in this way?

Two other points raised by tax-dollar support of the tournament:

  • Proceeds from the tournament are doled out to local and regional charitable groups. Shouldn't that money go first to repay taxpayer contributions?

  • Taxpayer sponsorship would not have the same economic impact as corporate sponsorship. Corporate sponsors fill up hotels, hire caterers and other private vendors during tournament week.

    We said in August, when we wrote in favor of town and county sponsorship for this year's tournament, that it should be a one-time commitment. We don't want to lose the Heritage, but it should not become government sponsored.

    A private title sponsor stepped up to save the day in 1987 and in 2003. That's where our efforts must focus.

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