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EDITORIAL: A tax by any other name Print E-mail
By Jim White   
Monday, July 27, 2009

O.K., Richmond churches, listen up. The city wants some money. Finance committees, brace yourselves for an added expense.

Along with families, churches and businesses, cities also are feeling the financial crunch. Perhaps that’s why the city of Richmond has followed the example of Hampton Roads municipalities in instituting a stormwater utility fee.

City Council liaison David Hathcock is careful to emphasize that this utility fee is not a tax. It is a fee collected for a service provided — namely, a place for rainwater to drain after it falls on Richmond property.

The fee is applied universally to all property owners — residential, commercial, governmental and ecclesiastical. Since 52 percent of property in Richmond is tax-exempt, much of it state-owned, city decision-makers are anxious to include all property owners in the fee assessment. Only property owned directly by the city is exempted.

Why not exempt churches? According to Hathcock, because Virginia is a Dillon Rule state, their hands are tied. Briefly, this means that unless the General Assembly expressly says local municipalities can do something, they can’t. Since the legislature did not give Richmond authority to exempt churches, they must include them.

What kind of annual charges are we talking about?

Taking the formula provided on the city’s website, a church like Monument Heights, for example, will be assessed a fee in the neighborhood of $5,000. It is calculated on the basis of $45 per 1,425 square feet of ground space covered by paved parking and buildings.
 
Hathcock wants Richmond churches to know that the City Council is sympathetic. It understands this may be hard on them, he says. He points out that the council actually delayed implementing the fee for a year. But there is nothing they can do, he says. What if churches simply can’t pay? Quote Hathcock, “I don’t want to go there.”

Understandably, churches are not reacting well to this news. Neither am I. It isn’t that I think churches shouldn’t have to pay their fair share. Nobody is suggesting that churches should think they have a right to park on somebody else’s nickel.

But churches have always contributed to the general welfare of our communities in other ways. Non-profit organizations have historically been tax exempt for a reason. No, it’s not because city fathers in times past were nicer guys. It is because they realized that churches and non-profits in the community were largely responsible for creating the kind of community we would want to call home.

Every church I know about maintains or contributes substantially to some kind of food pantry, clothes closet or benevolent fund. People who otherwise would come to the city for help or who would be adding to the crime rate by taking what they need are assisted by the ministries of the city’s churches.

These contributions never show up in a city audit. A city accountant will never know how many hundreds of thousands of dollars churches save the city by shouldering this social responsibility.

Churches don’t complain about doing this. It is who they are. It’s their mission. Their responsibility. They are motivated by love for people and obedience to Christ. They are not seeking recognition.

Still, in times past, the contributions of churches were widely if not universally acknowledged. These days, with growing antagonism directed toward the “tax-free ride” churches are assumed to be getting, the financial contributions churches routinely make to their communities are largely overlooked.

Through the years, churches have taken the lead in making our cities worth inhabiting. That’s why churches have been exempt from paying property taxes. They weren’t getting a free ride; tax exemption acknowledged that the church had already paid it forward.

Churches are also understandably confused about the difference between a fee and a tax. They have been assured this is a fee, but it looks like a tax and it feels like a tax. As the quip goes, “If it walks like a duck and quacks like a duck, it must be a duck.” The city says, “Not so.”

I have to wonder what other services traditionally covered by taxes could become fee-funded? Support for fire and police protection? I can see it now. Fees for services rendered. Payment for protection. A deal you can’t refuse. Parks? It would be only natural, I suppose. Charge a kid to swing. Salaries for city employees? With some really creative rationalizing, surely they can be covered by fees! By creating a sufficient fee structure, perhaps we could eliminate taxes altogether!

What can Richmond churches do? Aside from simply refusing to pay, which I am not recommending, they can attempt to earn credits that will be applied toward the fee. Theoretically, a church or business can reduce its fees by up to 50 percent by earning credits. For most churches, many of these credits will simply not be feasible: establishing retention ponds and earth berms, for example. But one thing they can do is educate their people about why managing stormwater runoff is needed.

Where will churches get the money to pay this fee? Like cities, they have only two choices. They can increase income or decrease spending. In colonial times some churches charged annual pew fees. Ironically, the higher priced pews were in front. But I don’t foresee the fee making a popular comeback. At least not in churches.

Some congregations will respond to the challenge with increased giving. Others will look for expenses to cut. A few dollars from Cooperative Missions; staff raises deferred; fewer subscriptions to the Herald; and less money budgeted to meet the needs of hurting people. I certainly can’t blame the Richmond city council for seeking new revenue sources. But, I do fault them for being short-sighted. Ultimately, this fee will not only hurt churches, it will hurt the community as well.

One other response some churches may be forced to make is to ask themselves hard questions about whether they can continue. Some congregations meet in buildings much too large for their current needs.

A substantial fee assessed on the basis of building and parking lot size without regard for the size of the congregations that meet there will undoubtedly be a severe hardship for many of them.

Mr. Hathcock assures churches that the city council feels their pain. But actions speak louder than words.

Jim White is editor of the Virginia Religious Herald

 
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