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To Tax or Not to Tax?
November 18, 2007
Posted by: Carol
Universities, hospitals, museums and other nonprofits are generally exempt from taxes, most notably property taxes. These exemptions in 23 cities, according to a survey by The Chronicle of Philanthropy, amount to $1.5 billion.
The biggest exemptions are in NYC, Boston, LA, DC, Houston and Philadelphia. But the biggest impacts are in Denver, Baltimore, San Diego and Memphis.
Most exemptions go to universities and hospitals in exchange for the public good they are expected to provide. But the pressure on city budgets continues to grow, so pressure is increasing on nonprofits to pay something for the city services they require (or for the land they take out of circulation that could yield property tax).
Clearly, not all nonprofits are created equal. Some hospitals, for instance, serve more indigent patients than other hospitals. We may be moving to a time when cities will demand that nonprofits exempt from property taxes account for the value of the public service they actually provide, as well of the cost of public services they use.

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