Trends As I See Them

This is our second annual “State of the Industry” issue. Once again, we have gone to considerable lengths to gather as much useful data as possible, so you’ll have some benchmarks to help you prepare and present next year’s budgets, and plan long-range strategies for your properties.

I won’t usurp our editors’ conclusions here about the overall industry trends described throughout this issue. Instead, I want to offer additional views—drawn from my reading of current events, and mainly, the election results—about bigger-picture things that could also impact our business over the next few years.

Taxes: The election almost ensures that most of the recent tax cuts that were scheduled to expire, will expire. Capital gains rates have never been lower (in modern times), and I am pretty sure that nothing will happen to change this for at least the next two to three years.

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Regardless of what “message” the voters sent through the election, the President has enough support in the Senate to sustain any veto of tax increases. Any further improvement on the inheritance (or death) tax will not occur. While they will never admit to it, there is a strong “income re-distribution” mood in Congress, even though actual receipts to the government have increased by 15 to 17 percent over the last year. If the goal of tax policy was to bring in more revenue, the cuts would be made permanent. But you never hear that from the party now in control of Congress.

When you cut through all the overblown rhetoric about balancing the budget, the obvious answers—increased actual revenue through tax cuts, coupled with decreases in government spending—are never considered. Pure and simple, the Democrats want to “take money from those rich people” and spend it on things they think are important (read: Buy votes to stay in power). They would be wise to see what just happened to the Republicans who tried to do just that.

What does this mean for you? Most of our members and customers would be grouped with “those rich people,” so this tax policy trend will affect their attitudes towards capital improvements, dues increases, and other tough fiscal challenges you face in the near term. My advice? Bite the bullet—do what needs to be done now, while tax policy is still relatively positive.

Environmental Issues: Anti-smoking zealots got a law passed in Texas to ban

any smoking in a closed environment where foster children are present. In essence, Texas wants to regulate the air you breathe and have the police enforce this. Closer to home, a town in Illinois passed an ordinance forcing private clubs to be smoke-free. Since most clubs already are, this may not seem significant. But it really means the choice has been made for you, instead of letting you make your own rules.

Trust me, this won’t stop here—you will see more and more of it, especially as the new Democratic Congress rewards the far-left wing of the party for the election victory. While state environmental laws seem to be stricter than federal laws, expect no relief in this area. And remember: When it comes to political decisions on the environment, common sense doesn’t always apply.

The good news about the election? Al-most always, once in power, parties move to the center. Certainly, Republicans changed from 1994 to the present; over time, expect the Democrats to do the same.

We have now finished our second calendar year of publishing, and your response to our magazine has been overwhelming. We thank you for your readership, and look forward to bringing you editorial that continues to provide ideas for solutions to common club problems. On to 2007. . .