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City considers nonprofit PILOT funding

Opinion Column

Carlton Fletcher

Carlton Fletcher

Give a little bit. Give a little bit of yourself to me.

— Supertramp

A Sept. 28, 2012 Albany Herald report, using information provided by the Dougherty County Tax office, showed that 24 percent of Dougherty County’s gross tax digest is owned by nonprofits and, therefore, is non-taxable.

City Manager James Taylor, in looking for ways to tame a $108 million beast of a budget, has proposed taking a close look at tapping into the almost 700 nonprofits located in the county — most in the city — for funding to help pay for such services as police and fire protection and stormwater management that, because of tax-exempt status, is provided to nonprofits at no charge.

In discussing the specifics of his proposed budget with The Herald last week, Taylor said collecting funds from nonprofits is a touchy subject.

“GMA (the Georgia Municipal Association) says we have no choice but to provide the services (at no cost) for nonprofits, and our city attorney (Nathan Davis) agrees,” Taylor said. “But there are others who disagree. I feel that we have an obligation to our citizens to look into it.”

The issue is not one being considered by Albany alone. All over the country, state, county and municipal governments are seeking budget relief through PILOT (payment in lieu of taxes) contributions from nonprofits. At last count, 117 municipalities in 18 states were receiving such voluntary contributions.

In education circles, well-known — and well-funded — universities such as Yale ($7.5 million), Boston University ($6.8 million), Princeton ($1.2 million) and Brown ($7.96 million) have agreements with their cities of location to make significant yearly PILOT payments. Other large cities such as Pittsburgh, Baltimore and Chicago are seeking similar payments from their nonprofits.

The rub, however, is that these institutions are making the payments to their respective municipalities voluntarily. It becomes a far different issue when nonprofits are either unwilling or financially unable to make such contributions.

“I’ve been looking into recent litigation in Florida and other places where certain jurisdictions imposed a fee (on nonprofits) for fire service,” Davis said. “And while that fee passed muster in Florida, I don’t think such a separate fee for a service like fire protection would stand in Georgia.”

All 50 states in the union have laws that exempt educational institutions, hospitals, churches and other nonprofits from paying taxes. The reasoning is simple: These entities provide services that would otherwise fall on the state.

However, many taxing entities point to property owned by nonprofits that is not being used for the specific services provided by that entity as a means of skirting tax-exempt laws. Government leaders lament the fact that, not only does the tax-exempt entity not pay taxes on property it purchases, its ownership of such property erases the possibility of private ownership and thus takes the property permanently off tax rolls.

Locally, that’s been a knock on Phoebe Putney Memorial Hospital. However, hospital officials say Phoebe Health System does indeed pay taxes on its property not used for medical purposes — confirmed by Dougherty County Tax Director Denver Hooten — and that’s part of more than $130 million in community benefits provided by the hospital annually.

“From indigent and charity care, unreimbursed Medicaid and Medicare, inmate health care, school nurses, free community health fairs and the agreement we have (with the county) to pay an amount equal to what Palmyra had been paying in taxes, Phoebe provides significant benefit to the community,” Phoebe Vice President for Strategy Jackie Ryan said. “Phoebe’s goal has always been not to be a burden to local taxpayers.”

A report by the Lincoln Institute of Land Policy indicates continued tax-exempt status by nonprofits has become an increasingly significant issue because of three factors: budget strain brought on by a decrease in tax revenue, the changing nature of nonprofits’ growing utilization of government-provided services and growing anti-tax sentiment in the country.

Certainly the city would come under considerable fire if it tried to impose any sort of PILOT plan on its nonprofits, both large and small. It’s hard to imagine worthy organizations such as The Anchorage, Faith Community Outreach Center, GraceWay and the Albany Rescue Mission, which struggle for every dollar they use, maintaining the levels of service they provide if they were imposed a hefty PILOT fee.

But, as Taylor stated, “The more money we collect from other sources, the less of a burden we have to put on our property owners.” And with something of a neo-anti-tax revolution now firmly entrenched locally, regionally and nationally, struggling nonprofits may find a large segment of the public willing to render them casualties of the revolution if it eases individuals’ tax burden.

Email Metro Editor Carlton Fletcher at carlton.fletcher@albanyherald.com.

Comments

Cartman 11 months ago

What a great way to run some more employers out of town!

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WeAreThey 11 months ago

And which 'industry' would those employers be from, Cartman? The tax-paying industries would see the PILOT fees as some assurance that their future property taxes rates may stay in check since they would not be totally supporting the needs of non-profits. The non-profits can't leave because they need a needy community to qualify for grants - or justify their existence.

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FryarTuk 11 months ago

AH writer: "Locally, that’s been a knock on Phoebe Putney Memorial Hospital." Not the hospital, PP HEALTH SYSTEMS.

AH writer: " However, hospital officials say Phoebe Health System does indeed pay taxes on its property not used for medical purposes — confirmed by Dougherty County Tax Director Denver Hooten . . . " Does this include the facilities used for offices and/or rented? Writer, you need to search some tax records. The use of medical purposes has been expanded to serve the purpose of propaganda. The Hospital facility certainly is for non-profit caring purposes but the "medical purposes" term needs to be critically examined by a reporter willing to do a little independent research. Not very exacting information for the subject.

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Sister_Ruby_Two 11 months ago

If you're expecting Fletcher to actually do some research instead of simply repeating what he's told or vomiting out his own precious opinions......... you will have quite a long wait.

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FryarTuk 11 months ago

AH writer: " And with something of a neo-anti-tax revolution now firmly entrenched locally, regionally and nationally, struggling nonprofits may find a large segment of the public willing to render them casualties of the revolution if it eases individuals’ tax burden. "

I am one of the taxpayers ready to support federal and state legislation to remove tax exemptions from all non-profits.

Another cost-benefit item which Taylor and learned city & county commissioners should consider is consolidation of governments in the County.

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WeAreThey 11 months ago

To Whom It May Concern:

The opinions expressed by the Albany Shopper... uh, Herald... do not reflect the opinions of most of its readership or those of the majority of those paying for all these services in Dougherty County. For purposes of full disclosure, the 'analysis opinions' expressed by certain part-time journalists, who may or may not reside in Lee County, are reflective of: a) the journalist's lack of personal expenditure on taxes in the county discussed in this column, and, b) this publication's interests in future advertising dollars from certain non-profit institutions.

We ask that you pardon any inaccuracies, such as The Anchorage being subject to possible Dougherty PILOT fees despite being located in Lee County, with the understanding that the same dramatic effect could not achieved without the shameless use of this example.

We further advise you that placing this column under the heading 'Analysis Opinion' does not attest that any analysis of the information spoon-fed to us was performed. For fact-checking and real analysis, please wait (and hold your breath) until our next installments of public service reporting where we will report on: A) The true composition of non-profits in Dougherty County and publish a list of those listed as tax-exempt; B) Our analysis of the tax-exempt properties owned by Albany/Dougherty Hospital Authority and Phoebe Health Systems, their stated uses and publish a list of those properties; C) Our in-depth analysis of the $130 million in community benefits purported to be given by Phoebe. We will examine what services are provided and provide independent analysis of how that $130 million is calculated.

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agirl_25 11 months ago

Speaking of taxes, I was under the impression that sales tax was going to have to be paid on internet sales. Is this in the future? I am still ordering from amazon.com and not paying any taxes.

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Cartman 11 months ago

The largest and successful NPOs are not typical. Phoebe is a money-making machine disguised as a public hospital. However the public has no control over it. Its strong-arm revenue-generating model stirs this type of taxation discussion. There are a lot of "non-profit" churches in the news that take taxpayer money and apply it to real estate mismanagement on a colossal scale. When it collapses, they come back for more public funds.

But don't let your sentiment to punish those organizations spill over to hobble the worthwhile non-profits who are struggling. There are a ton of churches, veterans organizations, food banks, missionary, homes for battered, etc. that barely make it as it is. Don't let the brush with which you intend to paint Phoebe be too broad.

Step back and look at the forest. Any new tax will ultimately expand. A new tax on any of us is a new tax collectively on all of us.

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FryarTuk 11 months ago

"Don't let the brush with which you intend to paint Phoebe be too broad." Whatever that means.

"A new tax on any of us is a new tax collectively on all of us." The issue of property tax is the critical factor. Taxes to pay for schools, government functions, etc. etc. come significantly from property taxes which are incredibly high in Dougherty County. If new (sales for example) taxes have to be generated and everyone has to pay that is appropriate. Health Systems' huge office complexes, the restaurants, the gift shops, the gymnasiums, the child care facilities all should be taxed the same as any shop, doctors' office or business. The facilities directly providing hospital care should be the only ones exempt from property taxes.

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Cartman 11 months ago

My point simply was that while you're going after Phoebe, don't catch the Salvation Army, Goodwill, the Mission on Monroe St, the Food Bank, Lord's Pantry, American Legion, VFW, Moose Lodge, Liberty House, Boys Club, etc. in the same net.

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FryarTuk 11 months ago

Be careful with the broad stroke of your brush. Let's identify the several Phoebes. The Hospital complex is really separate from the System and should never be included in your painting. The for-profit Systems should be cut loose to grow like heck but pay property taxes. I strongly support Phoebe Systems growth along with their rental and service programs.

As for the private charity programs and churches, if they own property I think the laws should be changed so they pay property taxes as well. If they use services or receive benefit from services, they should pay.

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waltspecht 11 months ago

Why shouldn't everyone utilizing services pay for them? All a part of doing business. Around here, most Churches are just that, a business for the profit of the Preacher and their friends. Not very many actually utilize their funds for the Lord's work, they use them to build Temples of Worship. Complete with statues and such.

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Cartman 11 months ago

All this glee for a new tax.

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FryarTuk 11 months ago

There is no glee but a tax burden which should be shared equitably. You are still painting with a bad brush.

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Cartman 11 months ago

Sorry, we'll just have to disagree. I just favor cutting spending rather than inventing new revenue sources. They always seem to expand as time goes on.

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FryarTuk 11 months ago

Fine. Let's spread the property tax burden equitably and cut the spending. You got my vote.

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Sister_Ruby_Two 11 months ago

The comments about this piece of Tripe masquerading as a newspaper article are incredible. Any of you interested in a job as a newspaper writer?

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Sister_Ruby_Two 11 months ago

Jackie Ryan said. “Phoebe’s goal has always been not to be a burden to local taxpayers.” Continuing: ....by running all competition out of business and by transferring more and more properties into non-taxed status.

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