Red Bank, New Jersey Has New Idea for Taxing Tax-Exempt Property Owners

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January 1, 2012; Source: Daily Record | Mayor Pasquale “Pat” Menna of Red Bank, New Jersey has a new approach to the challenge his city faces with tax exempt property.  According to Mayor Menna, one-fourth of Red Bank’s real estate is tax exempt.  Joined by his counterparts in Long Branch and Asbury Park, Menna is asking the New Jersey legislature to consider legislation that put any additional properties that nonprofits purchase onto the tax rolls but maintain their current properties as tax exempt.  His idea is that this would apply to municipalities with at least 15 percent of their tax base owned by tax exempt entities.

The proposal is interesting and odd—interesting in that it doesn’t try to go backwards in history and tax properties that have been historically tax exempt, and odd that the taxable new purchases apply to nonprofit property purchasers, but not to equally tax exempt religious or governmental landowners.  It is a stratification of tax exempt property owners—governmental owners and religious owners always tax exempt, but nonprofits taxable for their acquisitions of new properties. 

Red Bank may have a jaundiced view of nonprofits.  Three local nonprofits make voluntary payments to the municipality:  the Riverview Medical Center, the Navesink Rowing Club, and the Monmouth Yacht Club.  Perhaps Mayor Menna doesn’t appreciate the range of vital services that nonprofits perhaps unlike the yacht club and the rowing club deliver to the lower income people on New Jersey’s Monmouth Country.  Someone had better re-educate Mayor Menna quickly about the role of nonprofits in our society to get him and his colleagues off the idea that nonprofits are sort of a less worthy class of tax exempt property owners.—Rick Cohen

  • Tom Simcoe

    You make it sound as if the mayor must be anti-nonprofit in order to desire to levy property taxes on them. The reality is that nonprofits consume government services just like other property owners. Someone has to pay for those services. Many older cities continue to act as regional centers for healthcare, education and government, while the tax base that historically supported the roads, sewers, police, etc. that those organizations (and those who partake of their activities) consume has migrated out into the suburbs.

    As a result, a disproportionate cost of subsidizing the nonprofits’ consumption is being born by the remaining urban tax base, while those who benefit from that consumption bear none of the cost. Taxing the nonprofit is an attempt to equitably redistribute the cost of government services. The real question is not whether this is fair, but whether it can be accomplished in a sustainable and equitable way (i.e. by not bankrupting government,urban taxpayers or nonprofits).

    Tom Simcoe