Posted on 07/02/2012 7:53:39 PM PDT by Sybeck1
Memphis may join the growing list of cash-strapped cities that ask nonprofit and tax-exempt organizations to make payments in lieu of tax.
The City Council will vote Tuesday on a resolution to form a committee to explore the idea.
"We want to see if this is feasible, and if it is feasible, how much revenue it could generate," said council member Janis Fullilove, who sponsored the resolution.
Fullilove said the committee, if approved, would focus on tax-exempt and nonprofit entities that gross $15 million or more annually.
As municipal budgets have felt the crunch of the economic slowdown, cities across the nation are increasingly asking their major tax-exempt businesses — hospitals, universities and cultural organizations — to make payments in lieu of taxes.
Robert Lipscomb, director of the city's Division of Housing and Community Development, estimates that 30 percent of properties inside Memphis are tax exempt, including government buildings, churches, hospitals, nonprofits and universities.
"If you have 30 percent of your property not being taxed that relates to everything else the city does," said Lipscomb. "That's just a fact."
In April, Boston began for the first time sending tax bills to nonprofits, asking them to pay up to 25 percent of what they would owe if their property were not tax-exempt.
The new revenue-raising plan in Boston is based on the estimated cost of providing basic city services, such as police and fire protection and snow removal.
Over the last decade PILOTs for tax-exempt entities have been used in at least 117 municipalities in at least 18 states, according to a report from the Lincoln Institute of Land Policy in Cambridge, Mass. Large cities collecting these forms of PILOTs include Baltimore, Boston, Philadelphia, and Pittsburgh.
In Memphis, the existing PILOT program is an incentive tool used to lure businesses to the city and Shelby County. Under that system, businesses that secure a PILOT pay taxes on what the land is worth at predevelopment levels. Once they exit the PILOT program, they pay full taxes on the developed property.
Memphis officials will have to determine if nonprofits and tax-exempt entities should enter that program, or if a new program should be developed to get them to pay a portion of what they would owe if their properties were not tax-exempt.
"We'll have to determine if we need a new system," Fullilove said.
"I'm interested in these tax-exempt groups and asking them to be good stewards of Memphis," she said. "These tax-exempt groups use the same services the citizens use, fire and police services and protection, infrastructure like roads, so I'm asking them to help this community by paying a portion of their taxes if their properties were not tax exempt."
Councilman Jim Strickland, chairman of the council's budget committee, sees no downside in asking tax-exempt entities to make PILOT payments .
"I don't see anything wrong with asking," he said. "The worst thing that can happen with this is them saying no, so I think it's definitely worth asking."
Greg Duckett senior vice president and corporate counsel for Baptist Memorial Health Care, said tax-exempt institutions like Baptist already contribute to the city by bringing in jobs and research and by providing services the government doesn't.
"I respect and acknowledge the council's desire to look at this area, but in looking they need to look at the intended and unintended consequences of PILOTs," Duckett said. "You have to look at the purpose of nonprofit organizations and how they were created, and were it not for the services the nonprofits provide the public would probably have to pay for these services."
Duckett noted that Baptist provides free health care to the homeless and care for the poor that is not reimbursed, and provides facilities for the Church Health Center for $1 a year.
Baptist employs 5,700 people inside Memphis. Duckett said the hospital has a $76.5 million economic impact on Memphis.
"Obviously, if you are looking at the creation of some sort of taxes on nonprofits, items like that become legitimate issues for discussion over whether or not we can still do those things," Duckett said.
The talk of possibly including nonprofits and tax-exempt properties in a PILOT program comes as the current, business-recruitment-based PILOT is coming under review from city officials.
A council committee is considering a proposal to have outside auditors review the hiring and capital investment numbers submitted by companies enrolled in the PILOT program.
The Economic Development and Growth Engine board, or EDGE, tests about 10 companies a year to make sure they are producing the number of jobs and the amount of capital investment they promised to get the tax break. Around 75 companies are currently enrolled in the PILOT program.
The council has formed a six-member panel to examine economic development incentives offered by the city, including the PILOT program. The committee will explore whether the incentives currently in place have been effective and if the city should develop new incentives.
Janis Fullilove is a VERY sloppy drunk, and quite possibly psychotic.
In the vernacular of the locals...
“She CRAYYYYzih.”
Will the 16,000 newly minted IRS agents be “asking” me to buy Government approved health insurance?
Why would a church want to give the city monies they will squander when they are so much more effective at actually giving help and support where it is needed? The left is not happy unless they are finding more ways to loot the populace.
Why would a church want to give the city monies they will squander when they are so much more effective at actually giving help and support where it is needed? The left is not happy unless they are finding more ways to loot the populace.
Why should it be up to government to decide how much property such organizations or institutions should own?
There was a time when doing good voluntarily, out of a benevolent spirit, was considered valuable and not to be penalized by the coercive arm of government.
Councilman Jim Strickland, chairman of the council’s budget committee, sees no downside in asking tax-exempt entities to make PILOT payments.
“I don’t see anything wrong with asking,” he said. “The worst thing that can happen with this is them saying no, so I think it’s definitely worth asking.”
Kinda reminds me of a certain presidential candidate suggesting the redirecting of wedding presents his way.
Like it doesn’t hurt to ask...
...Really?
I guess churches could look at it as not being a tax, but simply a penalty for being Christian.
I was born and raised in Memphis, back when it was the nation’s cleanest and quietest city, with good public education, the nation’s finest utility district (L,G,&W) all under one roof, and the nations finest fire department.
It is now 60 percent Afro, and they have taken over everything, destroying it as they go.
I have only one daughter left there, hanging on.
I moved to the country in 1972, and OUT OF the country (USA) in 2004.
#4 Methodist Healthcare
#5 Baptist Memorial Healthcare Corp
#19 St. Judes
#23 Catholic Diocese of Memphis
#31 Regional Medical Center
#32 St. Francis Hospital
#33 Veterans Affairs Hospital
A couple of the hospitals might not be NFP. The IRS is #14; the rest of the Feds make up number 3. If these two are added together, they become number 2.
An interesting question. I hope somebody has an answer.
The way the Supreme Court values “being on the right side of history” and “the legitimacy of the Court” over the actual Constitution, anything is possible. Why not—these people figure—try to abrogate the First Amendment?
As John Marshall once wrote, the power to tax is the power to destroy. IAC, you make all these broadbrush accusations. Most of what churches do has nothing at all to do with making a buck. You just don’t like churches.
As municipal budgets have felt the crunch of the economic slowdown, cities across the nation are increasingly asking their major tax-exempt businesses — hospitals, universities and cultural organizations — to make payments in lieu of taxes.
"ask"?
"asking"?
You can always tell when the scumbag Democrat politicians and their newsrooms are at work.
Big Government doesn't "ask" for money - - the scumbag politicians confiscate it at the point of a gun. The scum need to make sure their juicy perks and pensions remain fully funded, and they still have enough money left over to buy the votes of their "base" of losers, bums, deadbeats, and parasites. And the scumbag Democrats can always count on their newsroom mice like this author Amos Maki to use gentle language on their behalf.
Yeah, they're going to "ask" for money, lol.
In the western tradition going back to medieval times at least, Church and state were in charge of separate spheres, the state would govern, and the Church took care of the charitable works and welfare. Hospitals? Those were the Churches. Welfare? The Church would allow the poor to farm on the Church's land for below market rates if they could not afford land. The arts and sciences? The Church subsidized them and hired artists and tradesman of all kinds creating art, building churches, etc. Compared to the Church, the King's contributions to these fields was trivial.
So why did the government take over? It goes back to the French Revolution, and even earlier, in which a new rabidly secular government would appease citizens by taking over Church property and selling it off in order to buy the loyalty of the citizens. It was competing with the Church for the hearts of the citizens, jealously encroaching on the sphere it had no real business being in.
The United States held out longer than Europe, because we are still constitutionally more medieval than "enlightened" Europe. Not only do we still have the Church, we have a vast network of thousands upon thousands of charities for any cause imaginable, using our citizen's rights of free association to create the means to solve any problem we set our minds to, without waiting for the government to act first or tell us what to do.
And this tradition is not obsolete, it aught to be the wave of the future. While "progressives" wish to create a rigid health care bureaucracy that rivals something from the Stalinism of the 1930s, the future is about mobility, free associations, Facebook, finding and linking to others for a common purpose.
Instead of taxing churches to support your obsolete model, you should be examining things in your own sphere which you can give back to the private sector, whether private enterprise or the vast web of charities that already exists in your town.
That's the system you need to rebuild.
No. I do not dislike churchs. I just think they should pay their way like every other business.
They are called non-profits for a reason.
PS Those groups may be contrasted with government agencies attempting to circumvent the Constitution and move into the realm of charity. Best reason not to allow such unconstitutional agency bad behavior is that AgencyPersons and their agencies waste well over 70% of every dollar they get, via government, from us!
Usually, less than one taxpayer dollar in four gets to the needy if an agency get its paws on it first.
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