Nonprofit Newswire | Tax Pits Nonprofits Against Seniors

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March 17. 2010; Times Union | New York has joined the growing list of states and localities that are seeking to remove property tax exemptions from nonprofits, but this proposal comes with a twist. Any money collected from nonprofits would be used to lessen the tax burden on low-income senior citizens.

New York State Senate Majority Leader Pedro Espada is apparently researching a proposal that the Albany, New York Times Union reports would use new revenue from nonprofits to fund tax relief for others. “Have nonprofits contribute at a time of national sacrifice,” Espada said. “It’s not such a bad idea.”

The Espada plan, which is projected to raise millions of dollars, would impose taxes on property owners, although some small nonprofits might be excluded. This wouldn’t be the first time the state has looked to nonprofits for additional revenue. To help the Metropolitan Transportation Authority cover increasing costs for public transportation, the state last year enacted a payroll tax for all New York metropolitan-area employers, including nonprofits.

While there are questions whether this plan has any chances, there’s no doubt it will run into strong opposition from nonprofits. “It’s the worst possible time to place additional financial burdens on the nonprofit community,” said Gene DeSantis, who represents hundreds of nonprofit children’s camps. “Demand for services is sky high and philanthropic giving is at rock bottom.”

Commenting on last year’s transportation bail out bill, Dennis Poust, spokesman for the Catholic Conference said that the additional payroll tax is costing Catholic schools $6 million.

As for the plan to use tax revenues from nonprofits to lower taxes for others, he said, “We would certainly vigorously oppose any changes to property tax exemptions to not-for-profits. We provide services to the state, and it’s long been recognized that not-for-profits deserve to be exempt.”—Bruce Trachtenberg