Still A Nonprofit, But No Longer Tax-Exempt

In an attempt to avoid new debt and decrease existing budget deficits, many cash-strapped cities and states are levying a host of new fees that don't provide exemption to nonprofits such as churches, schools, and charities.

1 minute read

December 27, 2010, 7:00 AM PST

By Emily Laetz


The newest source of property tax revenue in your community could be your neighborhood church or local hospital. A sign of changing economic times, nonprofit organizations such as places of worship and charities are now being included in many state and local tax pools as governments struggle to find funds to fix crumbling infrastructure and maintain city services.

"Houston's taxpayers in November narrowly voted to adopt a 'drainage fee' to raise at least $125 million a year toward the cost of improving roads and storm-water systems. The city will charge fees to property owners, and it won't grant exceptions to churches, schools and charities."

"The city has been tightening its budget. 'We're cutting up the city's credit cards,' says Mayor Annise Parker. 'Everyone who contributes to drainage issues has to share in the cost of correcting those issues.'"

"At a group called the National Council of Nonprofits, Tim Delaney, chief executive, says, 'Governments are taking their public burdens and putting them on the backs of nonprofits, at a time when the demand for our services is skyrocketing.'"

Monday, December 27, 2010 in The Wall Street Journal

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