Club ‘pole tax’ plan rouses debate

Minneapolis' city attorney thinks she's found a way to curb juvenile sexual exploitation -- make strip clubs pay for it.

Susan Segal wants the City Council to consider asking the state for permission to impose a per-customer fee on venues offering nude or partially nude entertainment, using the money to combat child prostitution and sex trafficking. The council is slated to discuss the issue next month.

It stems from a similar fee in Texas, often dubbed a "pole tax," which recently withstood a First Amendment challenge in the state's Supreme Court. The 2007 law, signed by Republican Gov. Rick Perry, charges nude entertainment venues serving alcohol $5 per customer. A similar tax exists in Utah.

The proposal strikes Randall Tigue, a Twin Cities attorney who frequently represents strip clubs, as "blatantly unconstitutional" and even some groups that stand to benefit sound less than enthusiastic.

Segal knew her proposal would be controversial, especially among the local adult entertainment industry, but said support programs are stretched too thin. Their services will only become more vital under a new state law directing more juveniles who are involved in prostitution to diversion and support groups.

"A big challenge for everybody right now is funding," Segal said. "So I was thinking maybe this would be a source of funding for juvenile prostitution prevention and ... to fund some investigations of traffickers. Because that's a very resource-intensive activity for the police department."

The council must approve the proposal before the city lobbies for it at the Capitol. The proposed legislation would let municipalities decide whether to impose the fee, since the state limits local sales taxes. Segal is also investigating whether the city already has the authority to impose the fee.

"In my opinion we don't need the city to become one of our biggest pimps," said Vednita Carter, executive director of Breaking Free, a St. Paul support group for victims of abuse and sexual exploitation.

Carter said putting a fee on strip clubs would amount to a de facto endorsement of the business. "We're saying it's OK and we're going to also get our little piece of the money," Carter said. She added that larger door fees would create higher expectations of the dancers.

Artika Roller with the Family Partnership in Minneapolis said that group is concerned the fee will be passed directly to the dancers through higher "stage fees." That's a fee some clubs charge dancers who work as independent contractors.

"You're asking for victims to pay for victim services," said Roller, who runs the group's anti-prostitution program. The Family Partnership advocated for the new juvenile prostitution law.

"We're pleased that they're trying to find ways of stopping sexual exploitation of women and girls and young men," said Molly Greenman, president of the Family Partnership. "I don't know that [this fee] is the solution."

Stark contrast

The reaction of several Minnesota advocates stands in contrast to Texas, where a sexual assault prevention group championed the law. The Texas law specifically targets sexual assault.

Rick Gipprich, communications director for the Austin-based Texas Association Against Sexual Assault, said his group initially had similar concerns. But it pushed forward because it was a reliable funding stream and the group saw a strong correlation between adult entertainment, alcohol abuse and sexual violence.

Many clubs are not collecting the fee during the legal dispute, but they have not yet seen a negative impact on the dancers. "We have not seen that yet, where the fee has been passed on to the dancers," Gipprich said, noting that it is more likely to be covered by higher entrance or drink charges. Clubs can also nix alcohol to avoid the fee.

Club owners in Texas remain in limbo as attorneys prepare to ask the U.S. Supreme Court to hear the case. Tigue, the Twin Cities attorney, said it violates the First Amendment.

Two club owners deferred comment on the proposal until they have a chance to research the details. Angelina Spencer of the Association of Club Executives, a national trade group for "adult nightclubs," said the legislation is a "really controversial issue within the industry."

Many executives oppose it because they believe in less government and less taxes. Others, however, believe the tax could give the industry more legitimacy. "So you've got two schools of thought going on here," Spencer said.