Tuesday, April 6, 2010

Boston, Palo Alto Seek Nonprofit Payments and a "Church" in Illinois Fights Property Taxes

Numerous states localities are challenging nonprofit tax exemptions, especially given current fiscal pressures.  Here are the latest stories from Massachusetts, California, and Illinois:

The Boston Globe reports that a mayoral task forceis on the verge of completing its examination of the uneven system of voluntary payments by the city's tax-exempt, nonprofit institutions.  The city is apparently laying the groundwork for having these institutions pay 25 percent of what they would otherwise owe in property taxes, which could triple the current payments in lieu of taxes made by some nonprofits.  Alternatively, the city is floating the idea that the nopnrofits could "pay" half of this amount by offering certain community programs such as free health screenings in public housing and scholarships for local students.

The San Jose Mercury News reportsthat the town of Palo Alto may condition approval of a new hospital project at Stanford University on the university paying for $30 million in public works, including a new police building, in addition to $124 million in "community benefits" already offered by the university to the town.  While the stated reason for these demands is the strain on community resources, including affordable housing, caused by the planned hospital expansion, the article notes that some have criticized Palo Alto's community benefit list as going well beyond items relating to that strain.

Finally, ABC News reportsthat George Michael of Lake Bluff, Illinois is seeking to exempt his multi-million dollar Lake Michigan front property from property taxes on the grounds that it is a church, based on his family's Armenian Orthodox beliefs, his online ordination, and the inability of his disabled wife and daughter to travel to the nearest church of their faith.  So far local and state authorities have prevailed in court, although an appeal is pending.  Ironically, such questionable claims for exemption may actually be on the wane given both greater attention to such matters by local authorities and, in at least some jurisdictions, the reduced value of such exemptions.



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