Wednesday, September 11, 2013
Last week, the Suffolk City Council voted to no longer accept local property tax-exemption applications from non-profit organizations. Members of the council voted after a two-year study showed that the exemption was costing the city money. Suffolk’s Chief of Staff also explained that many of the nonprofit organizations applying for the exemption were actually able to afford the tax bill.
This is not the first time a city has complained that local property tax-exemptions for nonprofit organizations drain the city’s budget. However, unlike Suffolk, many cities have refrained from refusing to accept tax-exempt applications entirely.
One Suffolk councilman feels the city’s decision is too restrictive. He argued that the city could have contained the number of nonprofits enjoying the exemption by carefully scrutinizing the organizations on a case-by-case basis and by reserving the exemption for those nonprofits with the most need.
The council’s decision raises a few interesting questions. Should it matter that some nonprofit organizations applying for the exemption could “afford the tax bill?” Why weren’t the applications for tax-exemption previously scrutinized on a case-by-case basis? What justifications support the argument that the exemption should be reserved for nonprofits with the most need?