A Wichita health club owner wants to Legislature to revoke the tax exemptions enjoyed by YMCAs, saying it gives the non-profit organizations an unfair advantage.
The owner of Genesis Health Clubs in Wichita is urging the Legislature to remove the tax exemptions granted to the YMCA, saying the exemption gives the non-profit an unfair advantage against for-profit health clubs.
House Bill 2498 would redefine “humanitarian services.” Organizations earning over 40 percent from membership or service sales would no longer qualify to be exempt from sales and property taxes.
Typically, YMCAs operate with 65 percent of their revenue from membership fees. Program fees and donations make up the rest.
The apparent target of a set of bills supported by Genesis Health Clubs owner Rodney Steven is the successful Wichita YMCA, which Steven claims can out-compete his business due to the tax exemption.
If the bill passes, “We will be in a huge pickle,” said Chad Knight, the CEO of the Southwest Kansas YMCA, which has branches in Garden City and Dodge City.
Knight said the bill would create an undue hardship for YMCAs like the ones located in Garden City and Dodge City.
“If this bill passes, the burden of the cost is passed on to the community. But people don’t like to pay more, so then our services go down because there are less and less people. It would have a huge impact on our services,” Knight said.
“I’m not looking forward to that day if it does pass,” he added.
Last year the Kansas Senate passed legislation granting private health clubs property tax exemptions. The bill currently being considered by the House Taxation Committee intends to resolve what for-profit clubs see as an inequity between the YMCA and their businesses.
Knight doesn’t think the YMCA can be fairly compared to a for-profit health club.
“If they’re going to sit here and compare us, they can’t compare us,” Knight said. “We do so much in the community.”
The Dodge City YMCA’s community offerings include an after-school program with USD 443 and a child care program. Organizations such as the Red Cross, fire department and Compass Behavioral Health use the YMCA’s facility.
Knight argued that the YMCA relieves the burden of local and state governments through community service.
Though the legislation seems targeted at competition inside the metropolitan areas, it would have an effect on all YMCAs across the state, including the one in Dodge City.
In January of last year, the YMCA of Dodge City opened its doors in the former Sheridan Activity Center. Under a 25-year agreement, the YMCA essentially operates the city’s recreational programs.
Currently, the Dodge City YMCA has 2,762 members.
If the bill passes, the YMCA would face decisions on whether to cut back services, and which services should be trimmed, Knight said.
Rep. Bud Estes, who represents Dodge City in Topeka, sees the question as a non-issue.
“I’d be opposed to charging the YMCA property tax, for certain,” Estes said.
Christopher Guinn contributed reporting to this story