Sounds good. Sounds like making things equitable. Shades of “fairness.” But sometimes, in reality, it smacks of “special treatment.”
A case in point is Senate Bill 72, a measure working its way through the Kansas Legislature that would treat for-profit health clubs as if they were not-for-profit entities and exempt them from paying property taxes.
Apparently enough senators have bought into the specious “level playing field” argument, principally advanced by Rodney Steven, owner of Genesis Health Clubs (which operates facilities here in Lawrence). The measure was approved by the Senate Tuesday on a 25-14 vote.
Give Steven credit. As long ago as 2005 he was lobbying the Legislature with his “level playing field” argument. Back then, it pertained to sales taxes collected on membership dues. Senators rejected the sales tax break, which reportedly would have cut $3.4 million in state tax revenue. Then, as now, your local YMCA and YWCA are the whipping boys in his proposal. Stevens is not operating a “Y.” The Ys that Steven considers his competition in places like Wichita are run by volunteer boards and offer reduced membership fees for low-income people. Their mission statement expresses a commitment to strong families and youth development “regardless of ability to pay.” In a recent news report, Wichita YMCA officials said their organization had provided a record $10.2 million in free or assisted services in 2012, including such things as youth camps and before- and after-school programs.
There’s nothing wrong with profits, and Steven’s entitled to earn one, but he’s not entitled to a “level playing field” that really mixes apples and oranges. Opponents of the measure point out that local governments depend upon property taxes. In Lawrence, for example, one local facility paid more than $54,000 in property tax last year.
Opponents of the bill — mostly Democrats, but also a few Republicans — point out that “Ys” and other nonprofits provide programs and services that private health clubs do not. The same is true of city recreation centers like those in Lawrence, which provide free play facilities and other services for the community. Sen. Anthony Hensley, D-Topeka, called the tax exemption “a special interest carve-out of the worst kind.” Others took note of Steven’s $45,000 in donations to state Senate candidates and observed that a majority of the Senate Assessment and Taxation Committee members got financial support from Steven or Genesis.
If, indeed, the Legislature is going to create some level playing fields, what about hospitals, or golf courses? How about a tax break for Alvamar and Lawrence Country Club, which compete with the city’s Eagle Bend course in Lawrence? What about for-profit training schools vs. public technical schools and other educational institutions? Fair is fair. Or not!
Applying the health club tax exemption thinking to other enterprises helps reveal its folly and lends credence to the idea that this legislation is “a special interest carve-out” designed primarily to repay a political debt. For-profit health clubs don’t serve the same purpose or population as city-owned or nonprofit facilities and they shouldn’t get the same tax exemptions.
Not all fields are meant to be level. Get over it! Move on. Don’t expect special treatment from lawmakers to solve your problems.