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Topeka Capital-Journal (Kansas)

The House engaged in extraordinary debate Friday before overwhelmingly rejecting a bill that would deliver a property tax exemption for fitness clubs statewide sought by a Wichita businessman who donated liberally to dozens of lawmakers.

The heart of the matter is a measure pushed in the 2013 and 2014 sessions by Genesis Health Clubs president Rodney Steven, who sprinkled $67,000 into campaign accounts of about 70 members in the Legislature. The Senate passed the bill in each session, but the House refused to bend.

Rep. Dan Hawkins, a Wichita Republican who accepted $1,000 from Steven, proposed the House simply concur with the Senate's bill. If 63 votes existed in the House, Steven's bill would be sent to Gov. Sam Brownback.

"We have an inequity on tax policy," said Hawkins, who praised a for-profit health facility in Topeka for helping him lose 30 pounds.

Hawkins agreed with Steven's assertion Kansas' nonprofit fitness organizations, including YWCA and YMCA facilities, enjoy tax breaks that place commercial businesses at a disadvantage.

His request was rejected on a vote of 16-108, but not before Rep. John Edmonds, R-Great Bend, stood on the House floor and exposed 18 senators who accepted contributions from Steven and voted for his bill. It passed the Senate with 23 votes, but Edmonds read off the home county - not the name - of senators accepting donations and the amount accepted by each.

"While it must be admitted that correlation is not the same as causation," Edmonds said, "it must be agreed these 18 senators provided 86 percent of the vote necessary to adopt the Genesis amendment. That is unseemly and highly suggestive, to say the least."

Edmonds, who also accepted a $500 contribution from Steven in December, said he became aware during the current session the Wichita fitness club operator might engage in political retaliation against lawmakers who "failed to behave in accordance with his expectations."

"I am sure Mr. Steven is a wealthy and powerful man, but I do not believe the day has come when this House is required to knuckle under to the demands of any individual - no matter how rich or powerful," Edmonds said.

The speech inspired Rep. Travis Couture-Lovelady, a Palco Republican who also took $500 from Steven, to express disappointment with commentary from Edmonds.

"I take offense to the fact he would say some of our colleagues in the Senate are bought and paid for," he told House members. "And you should, too."


May 3, 2014


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anonymous wrote:
The Kansas legislature had it backwards. The YMCA should not be tax exempt. The YMCA is creating an unfair advantage by competing against private businesses in the fitness industry. The YMCA should either stick to being a religion or give up its tax exemption and compete with other business who cannot hide behind an unfair tax exemption advantage. Mixing fitness with religion has no logic.
"Backwards"? Really? How many memberships does Genesis give for free to those that can't otherwise afford it? The Y sure does.
This is not about giving away free memberships. The YMCA hides behind its tax exemption paying its administration big money. The YMCA gets all kinds of financial benefits from local governments. If the YMCA really wanted to help people with free memberships, the YMCA should locate in poor neighborhoods who need the YMCA's free membership services. Instead the YMCA works against small business owners by competing against them using local government funding and its tax exemption to crush the opposition. They then act like they are the patrons of the poor.
I invite you to come to McPherson and look at our financials. There's nothing to hide behind!
And where in the "financials" would it show that you paid your property taxes like all the other health clubs?
Ever heard of Section 501 of the IRS? Probably not since Genesis doesn't qualify at all for that. Genesis is FOR PROFIT!
My clubs are for profit also. All we want is for the Y to pay their property taxes too--since they are in the SAME business we are in.
SAME...not even close!
All businesses deserve to make a profit as the market dictates. The YMCA's has created an unfair advantage by having a non-profit tax exemption granted to religious organizations. They are using the tax exemption to compete against an industry that cannot have the same tax advantages. This is going on all over the US and not just in Kansas. H ought to get real and admit the unfair advantage. Anyone can go to the Internet any download several good articles address the YMCA's unfair advantage!
Treadmills, weights, daycare, locker rooms, group fitness classes, a pool and personal training--all accessed by customers who pay dues for their "fitness membership." So what is the difference that sets the Y apart from commercial clubs? That they also do so much for those in need?
I recently visited a Y in an affluent area outside of Philadelphia. I'd like to know far "those in need" would have to travel to get to this Y. It's ridiculous.
Why not have the Y pay property taxes on the part of their business dedicated to fitness? Would that be 80% of their business? More?
If the YMCA wants to help people in need they should locate their facilities in areas that have clients in need of waivers for fees or discounts. Instead they build facilities in affluent areas and then use various locations as cash cows for some of their other locations. Because of their name and non-profit status they form partnerships with local governments to get grants and contributions to build their facilities that other businesses would never get. Many smaller business operations "mom & pops" for profit often give discounts, scholarships, facilities usage, and grants to various individuals, public or private schools, and other organizations and these small businesses do not get or promote themselves as "saviors of the needy." They simply make their contributions to the surrounding community by doing the right thing without asking for anything in return. The YMCA should learn from this. They do not.