A Threat to Church Tax Exemption
Is Church property protected only so long as it satisfies the interests of the state?
That is a question facing Lowell, Mass., and the answer could have far-reaching effects for all religious groups across the nation. In the future, Catholic dioceses may have to consider facing additional tax burdens when deciding whether to close or consolidate church properties in the face of the changing demographics of the Catholic population.
Like many dioceses across the nation, the Archdiocese of Boston has had to make hard decisions regarding consolidating or closing church buildings. Recently, for example, the Diocese of Brooklyn, N.Y., closed 22 Catholic schools, including some that had served their parishes for decades. For the Boston Archdiocese, these decisions have been intensified because of the financial pressure arising from the sexual abuse lawsuits.
As part of a parish consolidation program, the Boston Archdiocese closed six parishes in Lowell, a Boston suburb. In January, the Lowell City Council voted to assess property taxes against the buildings of these now-closed parishes in the near future. The council was following the lead of Lowell mayor Armand Mercier, who offered his own opinion on why the tax exemption should be revoked.
As reported in a local paper, he said, “The taxpayers of Lowell have been subsidizing these tax-exempt entities and were very willing to do so because of the benefit of the churches toward the faithful.” Now that the buildings have been shuttered, he continued, “taxpayers should no longer be subsidizing these buildings.”
Unfortunately for the Church in Lowell, the mayor’s reasoning is contrary to the long tradition in American law to protect religious property from taxes, which places the reason for such exemption preventing the state from interfering with religious freedom.
The right of religious property to be free of property taxes is one long-rooted in American history. Every state and the District of Columbia provide some sort of exemption for religious properties. This protection was first recognized by the United States Supreme Court in 1970. In a case called Walz v. Tax Commission of the City of New York, the court found that New York’s religious-property exemption did not violate the First Amendment.
The court noted, “Grants of exemption historically reflect the concern of authors of constitutions and statutes as to the latent dangers inherent in the imposition of property taxes; exemption constitutes a reasonable and balanced attempt to guard against those dangers.”
Importantly, the court did not base its ruling on the notion that churches should be exempt from property taxes because of government recognition that the property provides some good to the church or its members.
While the court noted that churches, like other charitable or social service organizations, can provide benefits to the larger community, the decision was clear that it was “unnecessary to justify the tax exemption on the social welfare services or ‘good works’ that some churches perform. … To give emphasis to so variable an aspect of the work of religious bodies would introduce an element of governmental evaluation and standards as to the worth of particular social welfare programs, thus producing a kind of continuing day-to-day relationship that the policy of neutrality seeks to minimize. Hence, the use of a social welfare yardstick as a significant element to qualify for tax exemption could conceivably give rise to confrontations that could escalate to constitutional dimensions.”
In other words, religious property should be exempt from taxation because the government should not be in the position of evaluating what the churches are doing with the property.
Yet the Lowell mayor and its city council have proposed using exactly that sort of “governmental evaluation” in determining whether to remove the exemption for the six parish churches that have been closed. The council’s decision is an invitation to abuse and interference with the religious freedom of all religious organizations. No public official should have the authority to determine the “benefit” religious property may have for the faithful in determining whether to impose property taxes.
Indeed, under the mayor’s reasoning, there is no difference between Church buildings being open or closed. If the government determined that the buildings cannot justify their exempt status by the “benefits” they provide, then taxes could be imposed.
And, as recent court cases around the country illustrate, increasingly religious organizations, especially Catholic ones, are being assessed by a secular standard; if the goods provided do not fit with secular assumptions, then the organization loses.
It is hard to see, for example, how a cloistered monastery or convent could provide the benefits the Lowell mayor assumes is the justification for tax exemption. Yet basing their tax-exempt status on the provision of a visible benefits runs exactly contrary to the desire to prevent the power of the state from being used to conform religion to secular power.
As Chief Justice Marshall stated in a different context, the power to tax is the power to destroy. As Walz and centuries of America history demonstrate, the traditional answer to avoid excessive involvement of the state into religious affairs has been to exempt them from one of the most common governmental impositions.
This removes one giant temptation for government overreach and unconstitutional action in matters of religion. Lowell’s decision, if it becomes final, takes a giant leap backward.
Gerald J. Russello is
a Fellow of the Chesterton
Institute at Seton Hall University.
- March 13-19, 2005