WHILE A LION’S SHARE of the National Club Association’s (NCA) work focuses on federal legislative and regulatory policy matters affecting private clubs, that is not our only task. We also join the fray when it comes to state legislative and regulatory issues that work against private clubs.
For six months we have been working with clubs in New York and Maryland to halt property tax proposals that could have a significant negative impact on their bottom lines.
New York
In May of 2017, State Assemblywoman Sandra Galef (D) expressed a desire to fundamentally alter the way private club property across that state is assessed. When the legislative session began in January, she followed through on that plan.
The bill she introduced would allow local taxing units the right to assess a club’s property at its highest and best use rather than assessing it at a recreational or commercial use. Such a change could significantly increase expenses for clubs and result in job losses for club employees across the Empire State.
Upon hearing about the proposal, NCA reached out to member and nonmember clubs in New York to ensure they were informed and ready to engage in a fight.
New York clubs have been the target of these kinds of attacks before and the New York State Club Association (NYSCA) was created years ago to help combat them. With this new issue, NCA immediately reached out to the NYSCA, too. Its leadership team of Charles Dorn, Bob James and Randy Ruder were ready to take the fight to Albany.
With the NYSCA, we arranged for a statewide club call to discuss hiring local government relations specialists who could take our concerns to the state capitol and advocate on behalf of private clubs. Though lobbying is something NCA does every day on Capitol Hill, local government relations specialists can have a greater impact on state legislators than Washington, D.C., lobbyists.
Not surprisingly, there were several New York clubs that had members who worked in the government relations industry, easing the process of finding suitable firms that could handle our issue. NCA then led an interview process to select the one best able to handle our needs.
NCA then began assisting the NYSCA in raising the funds necessary to meet the contractual obligations required by the rm. We assisted in a direct mail campaign and through personal requests at New York club managers’ meetings to ensure the funds were collected. As a result, our lobbyists are educating leaders in Albany regarding the likely impact an increase in private club property taxes will have on club employees and the local economy.
Because State Assemblywoman Galef is the chairman of the Real Property Taxation Committee, it may be difficult to stop the bill from getting out of her committee; however, our efforts have shown some success. Recently, she postponed presenting the bill to her own committee—likely because she is getting feedback from committee members expressing some concerns—which means our message is getting through.
This will be a tough battle for New York clubs. However, NCA, our clubs and their members will continue to send emails and make calls to legislators opposing the bill. At the same time, our government relations team will continue to apply local pressure on members in the state capitol. Our goal is to stop this bill before it can do any fundamental damage to private clubs in New York.
Maryland
In Maryland, private clubs have encountered a similar issue as their colleagues in New York. At the end of last year, House of Delegates Member David Moon (D) began reviewing how club real estate in Maryland was assessed. For most clubs, the assessment process was based on a state law created to protect open spaces, reduce overdevelopment and protect jobs.
Under that law, clubs are entitled to enter into an agreement with the Maryland State Department of Assessment and Taxation (SDAT) that prohibits them from selling their land for development in return for a reduced assessed value of the club’s land. Moon believes this state law benefits clubs too much.
In an effort to hike taxes on clubs, Moon introduced legislation that targeted facilities located in Montgomery County, Maryland. As a bedroom community of Washington, D.C., this county has some of the highest land values in the state. Nearly all the clubs residing in Montgomery County had entered into agreements with the SDAT. So, Moon’s initial bill would have had a devastating impact on those clubs.
As Moon announced his plans, NCA began communicating with our local clubs in that county to organize and create our own plan. Unlike New York, there was no Maryland State Club Association, so we worked with local general managers to create the Maryland Coalition of Concerned Clubs, with Brian Pizzimenti of Woodmont Country Club as the chairman.
With the coalition started, we then focused on securing the local government relations team that could communicate our concerns in Annapolis. We selected a firm whose lead lobbyist is not only a former Maryland state senator but also the author of the very law Moon is trying to kill.
Because our government relations firm is intimately knowledgeable with the law and what it took to pass it, we also know what arguments were used to try to defeat it when it was first proposed. In addition, the firm has the local expertise to know exactly what pressure points can be used on members and which members of the legislature to avoid altogether.
With a coordinated effort of lobbying by our team, club member emails and club staff making in-person appearances at hearings, our coalition was able to turn back the Montgomery County bill. Unfortunately, Moon has decided to alter the legislation and make it applicable to all clubs in Maryland.
His bill now stipulates that any private club may still enter into an agreement with the SDAT, but the new assessed value will be 1 percent of fair market value. For most clubs, this would be an exponential increase in assessed value and property tax liability. In addition, the bill would end all current SDAT agreements (regardless of their current end date) and limit new agreements to five-year terms.
Should this bill pass, a vast number of clubs would be unable to satisfy a hike in their property taxes. Some clubs have land assessed at $500,000 to $1M per acre, which would be a five- to tenfold increase in their assessed value per acre. The commensurate increase in property taxes would lead to significant job losses as well as jeopardize many clubs’ existence.
With the legislature entering its final months, NCA and our coalition are pulling out all the stops to ensure the success we had with the local Montgomery County bill is translated to this statewide bill. Hopefully, our work and the work of our talented team in Annapolis will be enough.
Protecting All Clubs
For years, you have known NCA for the work we do on Capitol Hill. We are your voice in Congress and we are the place you turn to for information on federal issues affecting your daily operations. However, that is not all we do.
In both New York and Maryland, our efforts have allowed local clubs to be informed, engaged and active in the fight to stop anti-club legislation. We work to serve as a liaison between our member and nonmember clubs and the local government relations teams on the ground who help fight on our behalf. Finally, we have served as a sounding board and resource for all committed to helping us fight back against state bills like these.
At times, it may seem like the federal issues are always front and center. However, we are also mindful of the effect state initiatives can have on clubs, their employees and our industry. For that reason, we spend considerable time on those issues, too.
As these two examples show, NCA takes seriously its commitment to protect, defend and advance the interest and well-being of private social and recreational clubs. So, should you find a state issue that could cause harm to your club, don’t hesitate to let us know. Chances are, we are already working on it for you.