Boy Scouts may risk loss of tax exemption in California

SACRAMENTO — Some California lawmakers seeking to pressure the Boy Scouts of America to abandon its ban on openly gay members are taking a novel approach: They are threatening to strip the organization of its state tax exemption.

The proposal, which cleared a legislative hurdle Wednesday, once again puts California at the center of a national debate on gay rights, and it could put the state on a collision course with the IRS if passed. The legislation would revoke the exemption from state taxes for any nonprofit that excludes members by sexual orientation, gender identity or religious affiliation.

Supporters acknowledge that the bill is directed at the Boy Scouts.

“Unfortunately in California, some organizations are out of step with state law and regularly discriminate,” state Sen. Ricardo Lara (D-Bell Gardens), the bill’s author, testified before the Senate Governance and Finance Committee on Wednesday. “The most egregious violator is the Boy Scouts of America.”

The measure passed the committee with only Democrats in favor. It requires two-thirds support in the full Legislature to pass.

The Boy Scouts of America has been under pressure for years from advocates for lesbians, gays and bisexual and transgender Americans to change its policy, but leaders of the nonprofit group have voted twice since 2010 to maintain it despite boycotts by corporate donors and condemnation by politicians and celebrities.

Gay rights groups such as Equality California see the threat to tax benefits as a way to gain leverage over the organization.

John O’Connor, executive director of Equality California and an Eagle Scout, told a packed Capitol hearing room that the legislation “sends a clear message: We do not support discrimination and we will not fund discrimination.”

The measure, which has the stated support of 31 lawmakers, would be certain to provoke a court challenge.

Officials said California would be the first state to pass a law withdrawing a tax exemption because of an organization’s exclusion of gays and transsexuals. The legislative effort has drawn strong opposition from religious and conservative groups, including the Pacific Justice Institute, that call it an unconstitutional abuse of power.

Matthew B. McReynolds, an institute attorney, said in a letter to senators that the measure would take “the unprecedented and alarming step of wielding the tax power as a weapon directed at the political enemies of the LGBT lobby.”

Under the bill, Scouting groups that raise money through events such as Christmas tree sales would have to pay taxes on the proceeds.

“You are talking about taxing revenue that is very important to the local Scout troop or pack,” said Rick Cronk, a Boy Scouts of America executive committee member from California, who testified Wednesday.

At the same time, Cronk said, there may be hundreds of thousands of gay Scouts and leaders, and the organization “embraces this community.” He said a change to its “don’t ask, don’t tell” policy is being considered. The Scouts’ National Council is scheduled to meet next month in Texas to weigh it.

“I think the process has begun, and I think it will end up where it should end up,” Cronk said, hinting at a possible policy reversal. “When Scouting tries to renavigate it takes a while, and Scouting is in the process of doing that.”

Some Scouts supporters oppose a policy change. Redlands physician Dale Broome told the lawmakers that he was molested by an older Scout.

“My main concern is a child safety issue,” Broome said grimly, adding that he knows many parents “who have major concerns about sending their sons on Boy Scout camping trips with gay leaders or gay members.”

State Sen. Stephen Knight (R-Palmdale) voted against the bill Wednesday.

“I certainly wouldn’t want to do something that would take away Scout troops in communities,” he said. “Scouting has done a lot for many people, including my boys.”

He also asserted that the measure could affect other youth groups, including boys’ and girls’ sports leagues.

Lara said groups affiliated with churches would not be affected because they have a different tax status, and he said is willing to change his bill, SB 323, to address concerns about other groups.

Those in favor of the bill include Eric Andresen, a Northern California resident whose son Ryan’s application to become an Eagle Scout was rejected after he told Scout officials in an email that he was gay.

“It bothers me so much that the state of California, by giving preferential tax treatment to the Boy Scouts, is actually condoning their discriminatory policies,” Andresen told the lawmakers in a voice strained with anger.

The hearing, tightly controlled by committee Chairwoman Lois Wolk (D-Davis), lasted less than an hour, with few people allowed to testify at length.

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