KHI News Service

Senate approves bill exempting private health clubs from local property tax

Various health-related measures acted on in House and Senate

By Mike Shields | March 25, 2013

The Kansas Senate today approved legislation that would exempt private health clubs from local property taxes.

Senate Bill 72 was brought to the Legislature by commercial health club owners with complaints that the taxes were unfair to them because they have to compete with non-profit, tax-exempt organizations such as the YMCA.

The measure was approved after about an hour-long debate with opposition from Democrats who said it would undermine the local property tax base and shift costs to other businesses.

Sen. Jeff Melcher, R-Leawood.

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But Republican supporters of the measure described it as necessary to create a "level playing field" for the health clubs.

Sen. Jeff Melcher, R-Leawood, said YMCAs and YWCAs "should be sales taxed, should pay property taxes. It's not as if they're serving some community interest. They're just competing with the private sector."

But since the Legislature couldn't agree to revoke the exemptions for the Ys, it should go ahead and exempt the commercial enterprises, he and others said.

Democrats said it was unfair to compare for-profit health clubs with the not-for-profit YMCAs because the Ys offer a variety of free or low-cost community services, sometimes including daycare, that are absent at the private clubs.

Sen. Tom Holland, a Baldwin City Democrat, offered an amendment to the bill that would have left it up to county commissioners to decide if the private health clubs had to pay property levies. But his proposal was rejected.

Opponents of the Holland amendment said county commissions probably wouldn't grant the exemptions because they wouldn't want to lose the tax revenue.

"What this bill is about is money plain and simple," said Sen. Anthony Hensley, a Topeka Democrat. "It's about a large tax break for health clubs and for a class of business that doesn't exaclty create a large number of high paying jobs in any community. This is just a special interest carve-out of the worst kind."

Other Senate action

In other action Monday, the Senate:

  • Approved Senate Bill 210, which would authorize moving regulatory power from KHIE, Inc. to KDHE. KHIE is the entity that oversees the state's two digital health record exchanges.
  • Approved House Bill 2160, which would extend the nursing home bed tax that is scheduled to begin phasing out next year. The money raised by the tax is used to leverage more federal Medicaid dollars and the money is then returned to the state's nursing homes.
  • Approved House Bill 2368, which would allow some changes to the scope of topics considered by the Governor's Mental Health Services Planning Council.
  • Passed over one of the more controversial bills on their calendar Monday, Senate Substitute for House Bill 2155, which would alter the role of the state's Community Developmental Disability Organizations.

House action

And in the House:

Members voted to non-concur on House Bill 2025, creating a KanCare oversight committee, and Senate Substitute for House Bill 2183, which would give KDHE more regulatory authority in its handling of communicable diseases. Reps. David Crum, R-Augusta; Brian Weber, R-Dodge City; and Jim Ward, D-Wichita, were appointed to represent the House in negotiations with the Senate over the two bills.

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