George,
How's the knee?
There are some cities, like Danbury, Ct., who run needed and profitable courses. The monies that come in to their course(Richter Park) stay in, and there are no levies on taxpayers as the course pays for itself and all necessary improvements. It works in Danbury because, as I said, it's needed. It allows the townfolks a chance to play a really good quality course and sets a higher fee structure for non-residents, one that is higher than most other public access courses in the state.
Additionally, towns have found that real estate prices of surrounding properties increase, raising tax revenues. Having a good muni helps attract residents and businesses to an area, as do other municipal recreational facilities like outdoor concert areas, ballfields, swimming pools or ponds, running tracks, fitness trails, skating rinks, cross country ski trails, sledding areas, etc., that would probably go begging for a lack of private operators. There is also the added benefits of greenspace that these courses supply, one that won't be subjected to loss from development pressure. A good supply of recreational amenities not only adds to the quality of life, it helps communities flourish which aids in their prosperity and adds revenue to the tax rolls.
There has been a long history of municipal involvement with golf and from what I've read many early ones were merely functional. It's easy for me to see how a town, over time, would want their course to measure up, leading them to make the improvements that would attract additional players. And yes, they may have had what some consider an unfair advantage in the marketplace for some time although this wasn't a pressing issue until the modern glut of courses, flat participation rates and several years of bad weather came to be.
Many municipal courses in the US have been turned over to private companies through leases or management contracts. Towns have seen the down side of running them in the last few seasons and I would imagine this shift will continue. Also, public/private partnerships are happening between towns, land developers and course operators for new construction.
There are merits to privatization of municipal courses but I think the townspeople who voted for them by referendum should be the ones to decide their fates in the future.
Heck, if you want to start privatizing something start with the federal government which employs 150,000 engineers and architects, 40,000 warehouse stockhandlers, 31,000 supply clerks, 30,000 computer specialists, 25,000 metalworkers, 23,000 mail/ file clerks, 10,000 paperhangers, and runs the largest print shop in the USofA, some 33 acres of building with
6,200 in their employ. That ain't all but I'll stop there.