August 24, 2010; Source: St. Cloud Times | Advance warning to St. Cloud, Minn. nonprofit property owners: You will be paying a Street Light Utility fee starting January 1st. Nonprofits in St. Cloud already knew that the city had removed the cost of streetlights from property taxes—nonprofits are theoretically exempt from property taxes—and instead created a fee that could be charged to for-profit and nonprofit property owners alike.
This warning is really to nonprofits around the nation. To balance municipal budgets, local policy makers will be looking for ways to transform items paid for by property tax revenues into costs to be paid for by user fees. If nonprofits can argue that these fees are surreptitious and disingenuous strategies to tax otherwise tax exempt nonprofits, maybe they’ll be able to fight some of them off.
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Anticipate that municipalities throughout the U.S. will watch the St. Cloud fee (adopted by other communities in that state) and think creatively about unbundling municipal costs that might be paid for by user fees, tax exemptions notwithstanding. Nonprofit Quarterly readers should tell us as soon as they see user fee strategies popping up in their localities. You tell us, we’ll put them in the Newswire.—Rick Cohen