May 11, 2010; Source: Omaha World Herald | Just when we were getting to be a little depressed at all of the local and state government attacks on nonprofits due to their tax exempt status, we found a positive nonprofit headline, thanks to voters in Nebraska. Although it failed at least twice before, a ballot measure amending the state’s constitution to allow municipal and county governments to issue tax exempt bonds on behalf of nonprofit organizations passed by the slim margin of 52 percent to 48 percent.
The financing would help nonprofits on construction projects and equipment purchases wherever the nonprofits might be located, as opposed to current state law that permits tax exempt bond financing for nonprofit hospitals, private colleges, and other nonprofit projects only in officially designated blighted areas.
So why did this ballot initiative fail in the past? Taxpayers and governments are not on the hook for the bonds. Benefiting from tax exempt bond interest rates, the nonprofit is obliged to pay the bonds back, and if it fails to do so, it’s the bondholders who bear the losses. No taxpayer moneys would be involved much less at risk. Let’s hope that this ballot measure starts a voter trend in favor of helping nonprofits, not trying to find ways of eking nickels and dimes out of public charities.—Rick Cohen