OUICAL INTELLIGENCE Stripping the Pole Tax ICIuring the 2007 session of the Texas Legislature, Texas’ strip club industry got its tassels in a twist over a law requiring a $5 fee for club patrons. The fees were supposed to fund rape-crisis centers and treatment for sexual offenders, among other programs. This session, the clubs have engineered a proposed change in the lawand a potential windfall. First the industry sued the state attorney general and comptroller on the grounds that the fee violates performers’ First Amendment rights. Then Rep. Senfronia Thompson, a Houston Democrat, filed House Bill 982.. On May 12, Thompson’s bill passed the Senate, repealing the $5 “pole tax.” Unless Gov. Rick Perry vetoes the measure, the state will return $11 million collected by the comptroller’s office since 2007. In turn, strip clubs will pay a io percent tax on gross receipts from door fees. The tax also covers adult bookstores and other adult-themed businesses. The money generated will go not only to rape-crisis centers, but also to public schools. Brete Anderson, Thompson’s legislative director, says the tax will bring in less money than the fee, but has a better chance of standing up in court. Strip club owners triumphed last year when state District Judge Scott Jenkins ruled the tax violated dancers’ First Amendment rights. The state challenged the rul 4 THE TEXAS OBSERVER MAY 29, 2009 ing, and the appeal is expected to be heard this summer by the Third Court of Appeals of Texas. “The plaintiffs have said they will drop the lawsuit if this bill passes,” Anderson says. Torie Camp, deputy director of the Texas Association Against Sexual Assault, says it will be easy to skirt the tax under Thompson’s industry-backed measure. “How many adult bookstores charge a door fee?” she asks. “Strip clubs will simply have a drink minimum or some other fee besides a door fee to avoid the tax.” Defenders of the 2007 law believe they can win the court battle and set a precedent, creating a taxation blueprint for other state governments. “We could take this all the way to the U.S. Supreme Court:’ Camp says. “We are at the forefront, and other states are looking to us for guidance.” Rep. Ellen Cohen, the Houston Democrat who authored the 2007 bill, had proposed a “cleanup” bill that would have bolstered her side’s chances of winning in court. Cohen’s bill would have reduced the fee to $3 and directed all the money to sexual-assault prevention. Some now goes to a state fund for the uninsured. Despite having 69 bipartisan sponsors and co-authors, Cohen’s bill failed in mid-May on a point of order. Now Perry is the last resort for saving the pole tax. “We think the governor will support the survivors of sexual violence,” Camp says, “not strip clubs.” Melissa del Bosque Little New Orleans? GALVESTON’S PUBLIC HOUSING BACKLASH Hopes of a summer homecoming for former residents of Galveston’s beleaguered public housing system have been dashed. In January, residents displaced by Hurricane Ike cheered when the Galveston Housing Authority announced a plan to refurbish two housing projects, Cedar Terrace and Oleander Homes, as temporary living quarters while crews rebuilt two others. The buildings were to be ready by August. The housing authority also said it would try to build 1,500 affordable houses over the next decade. Since last September, when Hurricane Ike made landfall, more than 500 families have been living in trailers or motels, or with relatives. The storm only added to the need for affordable housing on the island. A waiting list has ballooned from goo before the storm to 2,500. In May, Galveston housing officials reversed course, deciding to demolish Cedar Terrace and Oleander Homes after a public backlash. The city of Galveston also unexpectedly declared the buildings unfit for habitation. The housing authority says it i llus tr a t ion by Alex Eben Mey er
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