Overturning two lower-court decisions, the Texas Supreme Court on Friday gave state officials the go-ahead to continue collecting a special $5-per-customer tax on strip clubs.
The so-called “pole” tax, collected upon entrance to any club that features nude dancing and alcohol consumption, was ruled unconstitutional by a state district judge in Austin and the 3rd Court of Appeals. The law was passed by the Texas Legislature in 2007, and so far about $15 million has been collected. The money has not been disbursed because of the earlier court rulings.
The bill’s author, Ellen Cohen, wrote the law so that the first $25 million in proceeds from the tax would go to programs that help victims of sexual assault. After that, the funds are earmarked for health care programs for uninsured people.
She praised the court’s decision.
“I’m thrilled by it,” said Cohen a two-term state representative who lost her re-election bid in the Republican landslide of 2010. “The whole idea was to find a way that would not be onerous and would find resources for victims of sexual assault and spread the word about their needs. In light of politics being what they are, I am happy that this Supreme Court saw the value of the bill.”
The Texas Entertainment Association, comprising many of the state’s adult cabarets, brought the lawsuit on grounds that such a fee infringed on First Amendment protections. Attorney Stewart Whitehead, who represents the organization, said he was disappointed that the Supreme Court disagreed with the lower courts.
“We think they picked the wrong test to evaluate this law,” Whitehead said, arguing that the justices focused on previous zoning cases instead of tax cases. “We’re assessing our options as to whether to take this option to the U.S. Supreme Court or to go back to Texas state district court and address other claims that were not addressed in this opinion.”
The association also had claimed the strip-club law violated the Texas Constitution because the fee amounted to an occupational tax, a quarter of which is dedicated to education funding.
The state Supreme Court, however, focused only on whether the fee amounted to an illegal infringement on freedom of expression.
In its opinion, the court said the fee was too small to be burdensome or amount to significant infringement, and that the state has a right to be concerned with the “secondary effects” of adult businesses.
“The fee in this case is clearly directed, not at expression in nude dancing, but at the secondary effects of nude dancing when alcohol is being consumed,” the ruling stated. “An adult entertainment business can avoid the fee altogether simply by not allowing alcohol to be consumed.”
Owners deny any link
How any secondary effects of such entertainment are related to sexual assault victims was not addressed by the court.
Club owners deny there is evidence of any link between the two, and Cohen acknowledged that she was simply using sexually oriented businesses as a funding vehicle for programs that help victims of sexually oriented crimes, not passing judgment on the morality of topless bars.
“That’s not what it was about,” said Cohen, who currently is running for Houston City Council. “I’m not in the business of telling businesses that they should close or not close or what to do. All I did was use my 18 years at the Houston Area Women’s Center to say this was a way of getting funds that were badly needed.”
The Texas Association Against Sexual Assault lobbied hard for the fee to help provide resources for groups that often operate on a shoestring.
The state comptroller’s office projected a biennial total of $86 million as a result of the special fee.