City questions charities’ breaks

Published 10:29 pm Friday, August 23, 2013

With rising requests for real estate tax exemptions and a still-slumping economy, City Council will consider placing a moratorium on future tax exemptions for charitable organizations at an upcoming meeting.

Council voted at its Wednesday meeting to have staff prepare an ordinance for consideration. Members cast their votes after seeing numbers showing the value of exempted charitable parcels has risen 88 percent in the last 10 years, totaling $172.7 million at the end of the last fiscal year.

“Those percentages speak pretty clearly,” Finance Director Anne Seward said. “With every exemption, we’re transferring that tax burden to other taxpayers.”


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The state mandates that the city exempt parcels owned by government agencies, religious organizations and veterans, as well as some other parcels, like communications towers. Those parcels had a combined value of about $866 million at the end of the last fiscal year.

But the city has control of two other groups of exemptions offered — elderly and disabled residents, whose property totals $223.2 million, and the charitable organizations, which have a total property value of $172.7 million.

The charitable organizations alone — 66 parcels are currently exempted — equal 1.8 percent of the total taxable value.

Some City Council members questioned the wisdom of exempting charitable organizations, because the tax burden shifts onto homeowners more heavily with each exemption.

“If the economy was booming, this wouldn’t be an issue,” Councilman Charles Parr said. “Honestly, we’ve got a lot of other needs. I think it’s the right thing to do at this time. We probably should have done it before to reel it in.”

Mayor Linda T. Johnson agreed.

“We have a very finite number of taxpayers in this city, and the needs are great,” she said. “You’re really putting it back on the individual homeowner when we do that. Nobody’s hurting more than the homeowners are right now.”

Parr added that credit-rating agencies have warned a decreasing tax base could make the city’s near-sterling credit rating go down.

Councilman Roger Fawcett also said he would support a moratorium, saying constituents he has talked to are not in favor of exemptions.

Councilman Mike Duman had a different take, wondering whether there is another option.

“We have the latitude to grant or not to grant these exemptions,” he said. He turned out to be the lone vote against preparing a resolution.

Nobody suggested including the elderly and disabled category in the proposed moratorium.

In a related issue, the council voted unanimously to schedule a public hearing for Sept. 4 to receive comment on exempting the Lake Prince Woods Retirement Community’s 172-acre campus from real estate taxes.

Parr and Councilman Jeffrey Gardy wanted to delay the hearing until after they got a chance to vote on the moratorium, but a code requirement mandates holding the hearing within 60 days after receiving the application. It was noted the vote could then be tabled.

Seward denied raising the issue simply because of the Lake Prince Woods application.

“I really felt like it was time to really put a spotlight on the problem,” she said. “I talk about it at each retreat. It really is becoming a challenge for us as a city.”