National Catholic Register


Colorado’s Non-Profit Tax Plan Would Drain Church

BY Jim Cosgrove

November 3-9, 1996 Issue | Posted 11/3/96 at 1:00 AM


DENVER—Catholicsareworking and praying for the defeat of a proposed propertytaxthatwouldforcemany Churches and charities to shut their doors.

Amendment 11 would make Colorado the first state to tax 7,500 properties of Churches, charities and nonprofit organizations. If it passes Nov. 5, tax assessors will view the property of each nonprofit the same way they view commercial businesses. The property of soup kitchens, for example, will be taxed at the same rate as the property of fast-food restaurants.

For pastors of struggling, inner-city parishes, the amendment would amount to an eviction notice.“If Amendment 11 passed, at the current assessor's value of the property, our bill would be $71,000 a year plus,”said Father Gene Emrisek, pastor of Church of the Annunciation, a largely Hispanic parish on this city's west side.“That's more than our Sunday collection for a year.“

Catholic organizations are not Amendment 11's only targets. Other taxable entities include the Boy and Girl Scouts, the YMCA, the Salvation Army, blood banks, arts and cultural facilities, Easter Seals, Meals on Wheels, home health care services, hospices and Little Leagues. The only nonprofits excluded by the tax are schools, orphanages, communitycorrectionfacilities,cemeteries and housing for low-income homeless, abused,disabledorelderlycitizens— institutions that, the amendment says, fulfill a“social duty.“

While the idea may seem ludicrous on its surface, the amendment's author hasinfluencedmanyvotersbyciting examples of abuses in the nonprofit sec-tor and promising lower tax bills for homeowners. Attorney John Patrick Michael Murphy, a former Catholic and radio talk show host from Colorado Springs, wants people to believe taxpayers are subsidizing religion.

Onegroupthatsupports Amendment11isthe Annandale, Va.-based Business Coalition for Fair Competition. The coalition says America's million-plus nonprofits have a combined income of more than $500 billion, including $375 billion income from the sales of products and services, and don't need government tax breaks, which only give them unfair advantages over for-profit firms.

“Colorado Citizens are in the unique position of saying it's time to recognize that nonprofits have changed,”says Kenton Pattie, coalition executive director.“They are more like businesses than ever before, and thus should be treated more like businesses.“

“Every Catholic across the United States should be extremely concerned about what's happening in Colorado,”said Jim Tatten, executive director of the Colorado Catholic Conference.“If Amendment 11 passes here—or comes close to passing—we can expect to see it on ballots in other states. States will begin to look at the community helpers as sources of revenue.”Churches, charities and nonprofits historically have not been taxed on real property because they provide services that lessen the burden of government.

“They are rightly recognized as assets—not expenses,”Archbishop J. Francis Stafford of Denver, newly appointed president of the Pontifical Council for the Laity, wrote in a DenverCatholicRegister editorial. “Butultimately,the value of the good done by the Catholic community cannot be measured in dollars and cents. How do we measure the valueofSetonHouseindowntownDenverwhere Missionaries of Charity sisters house and care for up to 15 terminally ill AIDS patients at a time—without using any taxpayer money? What is the value of a single child steered away from drugs or gang affiliation by an inner-city parish? How do you measure the community benefit of the Christian values instilled in children at each of our parishes?“

BishopRichard Hanifen of Colorado Springs says the amendment challengesdecadesof legal precedents and long-heldassumptions about the positive influence Churches and charities have on American society.“The reason for the property tax exemption for our institutionsinthefirst placewasthatwe serve the community in many ways that reducethegovern-ment's need to provide services,”said Bishop Hanifen.“Now that contribution from all of us is being called into question.”

There are a few concretemeasuring sticks. For example, a 1994 Senate joint resolution stated that Catholic Charities assisted 416,000 people that year, and“demonstrates in its services that helping people change their lives to become self-sufficient is a central component in solving the problems of homelessness and poverty.“

But Amendment 11 would put financial shackles on day-cares, counseling centers, hospices and countless other community services.“You'll lose some programs; some agencies will be forced to close,”said Jim Mauck, president of Catholic Charities in Colorado.“We have begun a process of rolling back government in social programs and you cannot come back and also then hit them with additional financial requirements. That's the essence of what Amendment 11 does. It slaps us for being charitable.“

Another Senate joint resolution in 1993 declared that Catholic schools save taxpayers $68.3 million annually. While nonprofit schools are said to remain exempt under Amendment 11, in practice they are not. That's because the same people contributing to Catholic Churches and charities contributetoCatholicschools. Andpeople—notbuild-ings—pay taxes.

“If our parish property is taxed, this will not allow parishes to make the sizable contributions which they have made in the past to Catholic schools,”said Father Samuel Aquila, secretary for education for the Denver archdiocese.“The survival of our schools is at risk.“

The schools most immediately in danger are those in poor neighborhoods. St. Rose of Lima, an inner-city Denver elementary school with more than 130 students, would be forced to close without help from other parishes. The average subsidy at St. Rose is $1,300 per student. If all Catholic Churches are taxed, however, that money may have to be used by other parishes to pay tax bills.

Annunciation's elementary school is in a similar predicament. Father Emrisek believes that's bad news for taxpayers.“[If the school closed] we would have 190 students who would enter into the public school system at an additional $5,000 a head,”he said.“By my calculation, that's about $1 million.“

The timing for such a proposal is ironic from a social perspective. The recent federal welfare reform bill sends a strong message that the United States will have to rely on Churches and charities to provide much-needed community services. Almost simultaneously, however, Amendment 11 could eliminate many of those institutions and agencies.

The measure has made strange bedfellows, briefly united previously antagonistic groups like Planned Parenthood and its anti-abortion nemesis. Focus on the Family. They have joined forces with dozens of other organizations and hundreds of individuals to battle the amendment.

“One of the most exciting things about this campaign has been our steering committee meetings, where people who have never sat down at a table together and rarely agree on their philosophies about life work together because they realize how detrimental this is to Colorado,”says Janelle Jones, a spokeswoman for CitizenAction for Colorado Nonprofits.

A SeptemberpollpublishedbyDenver'sRocky Mountain News said 49 percent of respondents would oppose the measure and 39 percent would support it.

The so-called“Murphy's Law”has failed to draw the support of groups that advocate Church-state separation, in part because of the measure's confusing wording, which some see as a potential playground for lawyers. For example,propertiesusedto house homeless people wouldbetax-exempt, butpropertyusedto feed, clothe or counsel the homeless would be taxed.

For this reason, AmericansUnitedfor SeparationofChurch and State, a constitutionalwatchdogorganization based in Washington, D.C., opposes the measure. In Americans United's view,Amendment 11 couldfurthermuddy relations between Churchesandgovernment entities by requiring officials to monitor faith-based groups in an efforttoqualifysome and disqualify others for tax exemptions.

As TV ads opposing Amendment11point out, the measure's backers take a“tough luck”approach to such consequences. In an Oct. 13 editorial in the Denver Post, amendment drafter Murphy wrote:“Granted, management adjustments will be needed, and a few may fail—just as small businesses do that pay taxes. Some Churches may have to resolve minor differences and merge.“

The Catholic community has mobilized to fight the tax, coordinating its efforts with CitizenAction for Colorado Nonprofits, a political campaign organization representing the interests of the Church and nonprofit sectors. The local Knights of Columbus delivered“Vote No on 11”yard signs to individual parishes, and literature is lining the pews.

But as election day approaches, there is a palpable sense of uneasiness in Colorado's Catholic community. People are concerned about the consequences that should the measure pass, but they also wonder about the moral state of a society that debates whether Churches are assets or liabilities.

Greg Kail is based in Denver. RNS contributed to this story.