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Private Health Clubs in KS Push for Tax Break

YMCA topeka by SKThe YMCA facility in downtown Topeka. (Photo by Stephen Koranda)Kansas lawmakers return to the Statehouse this week to wrap up this year’s session. One committee will be working on a bill that pits private health clubs against YMCAs. The bill would make privately owned, for-profit health clubs exempt from property taxes. Health club owners say non-profit YMCAs have an unfair advantage and the tax break would level the playing field. KPR’s Stephen Koranda reports.



It’s about 5 p.m. at a YMCA facility in downtown Topeka. There are dozens of kids here. They're getting help with their homework, working on activities and playing sports. In one room, a handful of small children in daycare have been decorating balloons with faces, and now they’re naming them.

(Sounds of children, Charlie says hello to the kids)

That’s Charlie Lord saying hello to the children. He’s the CEO of the YMCA of Topeka. He says there are few options for all-day childcare in the area, especially one that can assist people with low incomes.

“That’s what’s sad, is some of these have gone away because all-day childcare is so expensive to run and hardly ever profitable,” says Lord.

But on the other side of the YMCA building is a gym with a few dozen workout machines that anyone can pay the YMCA to use. And it’s this part of the YMCA that rubs Rodney Steven the wrong way.  Steven owns Genesis Health Clubs and argues that YMCAs have driven private health clubs out of business.

“These businesses were paying taxes, they were collecting sales tax and they were trying to compete with the YMCA. Many of them failed because the YMCA had an extreme cost advantage over them,” says Steven.

That’s Steven speaking earlier this year to a legislative committee. He says the state needs to make private health clubs property tax exempt -the same as non-profits like the YMCA- as a way to level the playing field

“They do provide nearly the same services, they collect membership dues, and they are for all intents and purposes in the health club business. The only real difference is that they are tax exempt. It is time to treat all health clubs the same,” says Steven.

Steven says his health clubs do offers services, like grants to help kids and athletes play sports or compete in events, and they offer free tennis training for public school students. But back at the YMCA of Topeka, Charlie Lord points out that the Y offers sports and services like childcare and afterschool programs. He believes there’s just a fundamental difference between a for-profit health club and a not-for-profit YMCA.

“I think the things we do for the entire family, or for the entire family of the community, are a lot more than a health club will do,” says Lord.

Earlier this year, a proposal to make private health clubs tax exempt got stuck in a House committee. But Steven likely has the ear of some lawmakers, because he’s donated more than $50,000 in total to the campaigns of dozens of members of the House and Senate. Before lawmakers left for a spring break earlier this month, the Senate revived the tax exemption and added it to an unrelated bill. Senator Anthony Hensley, a Topeka Democrat, argued that Rodney Steven’s money was playing a part in the process.

“And basically, he’s trying to buy a tax break. That’s what’s being attempted here,” says Hensley.

Republican Senator Jeff Melcher, from Leawood, made the motion to revive the health club tax exemption. He says this is about fairness, and Rodney Steven has been spending his money for that cause.

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

Steven was at the Statehouse in the days before the revival and during the debate. After Senator Hensley said he was trying to buy a tax break, Steven said he was supporting candidates he likes.

“I don’t think that a $500 check or a $1,000 check can buy someone’s vote here,” says Steven.

Most of the people in the Senate that Steven donated to did vote in favor of reviving the health club tax exemption. The proposal is now before a House/Senate conference committee, which will decided if the tax exemption stays attached to the bill and goes to both chambers for a final vote. The conference committee will likely start meeting this week. 

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