All over the country, money-hungry municipal and state governments are eyeing nonprofit organizations and their tax-exempt real estate like the wolf eyeing Little Red Riding Hood’s basket. Here in Massachusetts, the “tax ’em all” crowd would do well to review the latest report on how many individuals owe their living to the existence of these tax-exempt institutions, which would surely suffer if, for tax purposes, they’re treated just like everybody else.
According to the Massachusetts Nonprofit Network, more than 500,000 people were employed in the nonprofit sector in the commonwealth in 2015, representing 17 percent of the state’s workforce, $30 billion in wages — and the sixth-largest nonprofit sector in the nation.
The network called the economic impact of the sector “stunning.”
And of course the old theory holds that if you tax something you’re bound to get less of it. Treating nonprofits in a similar way as for-profit entities for tax purposes would surely deliver on that disturbing promise, both in fewer jobs and fewer funds to pursue charitable missions.
Of course that hasn’t stopped some government officials, who imagine treasure in nonprofit-owned real estate.
The city of Boston, of course, already “bills” nonprofit hospitals, colleges and universities and arts institutions for a portion of what they would owe the city if the property were subject to taxation. Northampton has taken Boston’s overreaching idea and run with it. There’s a bill pending on Beacon Hill that would explicitly require hospitals to pay a tax on their now-exempt real estate.
Up in Maine, Gov. Paul Le-Page wants all charities (with the exception of churches) to begin paying the tax man. Other states have considered it. It amounts to a massive money grab.
Yes, the nonprofits benefit from public services funded by property taxes — police and fire, etc.
They also provide valuable public services — services these governments have no intention of providing and couldn’t fund even if they tried. Many of them also enter into voluntary agreements with the state or with cities and towns, to offset those costs with payments in lieu of taxes. Government officials should consider the potentially damaging fallout if they start shaking down every nonprofit for more money — and let it go.
