For charities, a tax bill means another overhead expense taking away from their mission of helping those in need. But for cash-strapped local governments — especially those in places such as the Washington area, where much of the land is used by governments, churches, universities, hospitals and nonprofit organizations that don’t pay property taxes — it’s hard to keep cutting off revenue.
“The recession hit,” said David L. Thompson, vice president of public policy for the National Council of Nonprofits. “And all of a sudden, nonprofits that were the anchor of the community and greatly praised by policymakers — ‘Come to our city. Look at the great nonprofits we have!’ — started being treated as scofflaws not paying their fair share.”
A couple of years ago, Boston officials began asking some nonprofits for “payments in lieu of taxes.” Other cities followed or began imposing fees for services such as water, trash removal and public safety.
It comes up in Baltimore fairly often, said Henry Bogdan, director of public policy for Maryland Nonprofits. “Whenever the economy goes bad for a while and government revenues drop off, you’ll find certain localities who, under fiscal duress, will look at large nonprofit institutions and say, ‘I wish we could get some money out of them.