After an extended debate over issues of tax fairness, the state House of Representatives overwhelmingly rejected a bill that would have exempted private-sector health clubs from property taxes.
The bill has been heavily promoted by Wichita-based Genesis Health Clubs and its owner Rodney Steven II, along with former Wichita City Council member Greg Ferris, now a business consultant and lobbyist for a fitness club association.
Members of a House-Senate conference committee had earlier removed the proposed tax break from a bill that had passed the Senate, but supporters in the House made a last-ditch effort to restore it in a floor vote.
They lost, 16-108.
Steven and Ferris watched the debate from the House gallery, but they left before the final vote tally and could not immediately be reached for comment.
Rep. Tom Sawyer, D-Wichita, argued that the measure was needed because dozens of health clubs have gone out of business in recent years, facing what he said was unfair competition from YMCAs.
He said 40 percent of Y members are in on corporate plans and half make more than $50,000 a year, leading to an explosion of YMCAs in the upscale suburbs.
“They’re building in the wealthiest zip codes in our county,” Sawyer said.
“If we don’t make some kind of change, at some point there won’t be any private businesses” in the health-and-fitness field, he said.
Rep. Don Hill, R-Emporia, countered that all kinds of small businesses fail for a variety of reasons and health clubs are no different.
“You can pick any business you like, whether it be the sandwich shop, or the haberdashery, or even a pharmacy and get some depressing numbers,” Hill said.
He said Genesis recently opened a large club in his community and appeared to be doing very well.
But he said if Genesis and other health clubs were exempted from property taxes, numerous other types of businesses that compete for customers with nonprofits would demand the same treatment.
“If we do that, it’s Katie bar the door,” he said.
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