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Archive for Sunday, March 31, 2013

Editorial: Level field?

For-profit health clubs don’t serve the same purpose or population as nonprofit facilities, and they shouldn’t get the same property tax exemptions.

March 31, 2013

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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.

Comments

Michael LoBurgio 1 year, 8 months ago

Sounds like the legislative tax committee from last year working on the kansas tax plan!

what conflict of interest?

Legislative tax committee members have conflicts of interest on tax plan

Members of the state Legislature’s tax committees aren’t just key decision makers on Gov. Sam Brownback’s tax plan — they’d also be among its biggest beneficiaries.

Twenty of the 23 members of the House Taxation Committee have business interests that would be exempted from state income tax under the Brownback plan. In the Senate, nine of 11 members of the Assessment and Taxation Committee have interests that would go untaxed.

The data is reported in the lawmakers’ statements of substantial interest, a form all state officials are required to file disclosing business interests that could affect their governmental duties.

After looking at the data gathered by The Eagle, Senate Minority Leader and tax committee member Anthony Hensley, D-Topeka, suggested that some of the members should consider recusing themselves from voting on the plan.

“They certainly ought to at least let the general public and the rest of their colleagues know that they have a conflict of interest,” Hensley said. “We have rules in the Senate that provide for that.

“When a bill hits the floor on final action, you cannot be forced to vote if you have a conflict of interest and you announce that publicly before the vote takes place. It addresses this very kind of thing.”

Read more here: http://www.kansas.com/2012/01/22/2185537/legislative-tax-committee-members.html#storylink=cpy

grammaddy 1 year, 8 months ago

No more tax breaks for anybody until the middle and working poor get one.

truthhurts 1 year, 8 months ago

"There's nothing wrong with profits"

Well I'm glad the LJW endorses free enterprise (sort of). Now I can sleep at night.

weeslicket 1 year, 8 months ago

our state government has been bought and paid for.

bought by corporations, and paid for by the citizens.

or, think of it this way: privatization of profits. socialization of costs.

Bob Forer 1 year, 8 months ago

And so has our federal government. And it's not something that just happened recently. where have you been?

voevoda 1 year, 8 months ago

If health clubs should get tax breaks because the YMCA is a "competing" non-profit, maybe we should:

Eliminate taxes on grocery stores, because Just Foods is a competing non-profit.

Eliminate taxes on clothing and home goods stores, because the Salvation Army and Goodwill are competing non-profits.

Eliminate taxes on medical practices, because Health Care Access and Heartland are competing non-profits.

Eliminate taxes on homes, apartments, and hotels, because the Community Shelter, a non-profit, competes in providing housing.

The list is endless. This legislation is just an attempt by another prosperous businessman to get out of paying his fair share of taxes. If he can afford to buy the votes of state senators, he can afford to pay taxes.

Richard Heckler 1 year, 8 months ago

Can we say fraud..... locally and in Topeka.

Bob Forer 1 year, 8 months ago

this shouldn't surprise anybody at all. American government, at both the state and federal levels, has been bought and paid for by wealthy special interest groups for decades. That is why the reasoning behind laws that effect economic interests are always laughable. Do you really think a legislator who has been bought and paid for is going to explain his vote based on the campaign contributions he received.

We've lost true democracy in America a long long time ago. And anyone who refuses to believe that is an abject fool.

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