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Tax break for private health clubs clears Kansas Senate

  • The Wichita Eagle
  • Published Friday, April 4, 2014, at 7:41 p.m.
  • Updated Friday, April 4, 2014, at 9:28 p.m.

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— After intense debate over the role of campaign contributions in legislation and the value of YMCAs to communities, the Senate decided Friday to exempt private for-profit health clubs from property taxes.

The bill has been heavily promoted by Rodney Steven II, owner of Wichita-based Genesis Health Clubs.

Steven has for years pressed for tax breaks for health clubs, contending that his business and similar ones face unfair competition from the nonprofit and tax-exempt YMCAs.

Les Donovan, chairman of the Assessment and Taxation Committee, strongly opposed the tax break for health clubs.

He said it opens the door for country clubs to seek tax breaks because they compete with municipal golf courses, and for Wesley Medical Center, a for-profit hospital, to ask for tax exemptions to compete with the nonprofit Via Christi system.

During the debate, Senate Minority Leader Anthony Hensley, D-Topeka, distributed a list showing that Steven and his business had donated $45,000 to senators and Senate candidates during the 2012 election cycle.

“The people who write the checks end up writing the laws,” Hensley said. “He’s basically trying to buy a tax break and I don’t think we should allow that to happen.

“Our constituents, many of our constituents, are very skeptical and cynical about the process because this kind of legislation comes to the floor of the Senate.”

That brought a quick response from Sen. Mary Pilcher-Cook, R-Shawnee, who said Hensley shouldn’t impugn the motives of other senators.

“That is not something that’s acceptable to do on the Senate floor. I had no idea who this gentleman was. I had no idea he gave any money to my campaign,” she said.

Sen. Jeff Melcher, R-Leawood, defended Steven’s campaign contributions.

“I think it is a shame a taxpayer has to expend so many resources to try to get tax fairness,” he said.

The amendment to provide the tax break for health clubs passed 21-17.

Steven or his business contributed to 22 of the 40 sitting senators.

Of the 22, 19 voted in favor of the amendment, which was attached to a larger bill on classification of commercial machinery for tax purposes.

Greg Ferris, a consultant to Steven and lobbyist for the Kansas Health and Fitness Association, said Hensley’s criticism of Steven’s contributions was off base.

“It’s not Rodney’s bill, it’s a Health and Fitness Association bill,” he said.

He said he doesn’t think Steven’s contributions made a difference in the outcome on the amendment.

“Nobody sells their soul for $1,000 in a Senate race. It just doesn’t happen,” Ferris said.

Melcher also assailed the YMCA, which he said has strayed from its traditional mission of serving low-income core areas.

“We’ve had over 100 health clubs close, much of that as a result of the mega Y facilities coming up and municipals coming up,” he said. “They have lost sight of their mission … they really are just health clubs like any other.”

Hensley bristled at other legislators’ criticism of the Y’s.

“I think comparing private health clubs to either the YM or YWCA quite frankly is offensive,” he said. “The Y’s do so much more for the community than do private health clubs.”

Reach Dion Lefler at 316-268-6527 or dlefler@wichitaeagle.com.

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