New YMCA Property Tax Controversy: The Y as a Religious Institution

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August 7, 2014;Ski-Hi News

There have been a number of controversies concerning the tax-exempt status of YMCAs around the nation, most recently in Kansas, where for-profit health clubs contended that they were no different than YMCAs and deserved YMCA-like tax exemptions. Although the “C” in YMCA stands for “Christian,” the notion of a YMCA as a religious entity doesn’t seem to have been much of a consideration. But it has apparently been an issue in Colorado, where earlier this month the Colorado Board of Assessment Appeals approved a full property tax exemption for religious use to the YMCA of the Rockies.

This YMCA seems to make a point of its Christian identity. “We are pleased that the Board of Assessment Appeals has aligned their decision with the Court of Appeals and lifted up the YMCA of the Rockies’ sincere Christian Mission,” said Kent Meyer, CEO of YMCA of the Rockies, in a press release after the Board’s ruling. Interestingly, the Y had sought a tax exemption on both charitable and religious bases, but the Board only ruled on the religious factor. An additional charitable exemption would, according to the Sky-Hi News, “have no additional benefit for the organization.”

Retroactive to 2002, the decision will be a financial hit for Larimer County, since the YMCA stopped paying property taxes in 2005. If the county doesn’t appeal or loses on appeal, it will have to reimburse the YMCA for taxes already paid on the Y’s Snow Mountain Ranch and other properties, which apparently run as much or higher than $700,000 annually ($500,000 for Larimer County and $200,000 for Grand County).

To the Board, according to Ski-Hi, “any activities of a religious organization that promote its religious purposes constitute ‘religious worship,’” which makes any of the Y’s properties, including the Ranch, entitled to a religious purpose exemption. The county had argued that the definition of the Y’s religious worship was overly broad.

The two counties specifically argued that the Y’s 860-acre Estes Park Center and 2,187 Snow Mountain Ranch were being operated largely as commercial enterprises rented to the public, as opposed to being used for religious functions. By all indications, they are going to push this all the way to the state supreme court.

“The mission of YMCA of the Rockies is to put Christian principles into practice through programs, staff and facilities in an environment that builds healthy spirit, mind and body for all,” explained the Estes Park News about the religious focus of the Y’s retreat settings. “The organization accomplishes this by serving conferences of a religious, educational or recreational nature, providing unifying experiences for families, offering traditional summer camping experiences for boys and girls, and serving its staff with leadership opportunities and productive work experiences.”

As distinct from the Y’s generally secular charitable mission, the Y here is leaning on its historic religious underpinnings for this 100-percent exemption, protected to some extent by state law that restricts state officials from digging into and questioning the religious content of religious organizations’ programming. Is the option for going 100-percent religious a feint to avoid perhaps tougher questions about the charitable content of the use of the Ranch and the Center? Or is the Y really a religious organization whose programs should be considered religious worship?—Rick Cohen