The Fall-Out from 'Natural Decrease'

Editor's Update (4/26/2011):The Nonprofit Quarterly pointed this morning to a Boston Globe article reporting 40 of the city's largest nonprofits, with property valued at $15 million or more each, have received letters from the city "requesting them to make regular and voluntary tax payments based on the value of their holdings.

"Boston is not alone is seeking to raise revenues from nonprofits ... In Boston, nonprofits are especially tempting targets, because as the Globe notes, they own about 52 percent of the city's land area," the Nonprofit Quarterly continues. "Under the new plan payments would rise from $15 million, which they paid this year, to $48 million over the next five years."

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Editor's Update (4/4/2011):The Nonprofit Quarterly pointed this morning to a Times-Picayune article covering the recommendations of a mayor-appointed "Tax Fairness Commission" in New Orleans. One of the three recommendations:

"...changes to the state's constitution that would allow cities statewide to collect taxes from nonprofits as part of a larger effort to bring in more revenue from untaxed property ...
... If adopted by lawmakers and voters statewide, the most sweeping of those changes, according to The Times-Picayune, "would allow local governments to collect taxes on as much as half the assessed value of properties that long have paid nothing because their educational, religious, cultural, fraternal or other missions qualify them for exemptions."

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Up until last week, there's a good chance most people hadn't heard of "natural decrease." But newly released U.S. Census data reveal a near-record number of counties in the country are dying, and the term describing the phenomenon has quickly gone mainstream.

The Associated Press reports:

"In all, roughly 760 of the nation's 3,142 counties are fading away, stretching from industrial areas near Pittsburgh and Cleveland to the vineyards outside San Francisco to the rural areas of east Texas and the Great Plains. Once-booming housing areas, such as retirement communities in Florida, have not been immune.
West Virginia was the first to experience natural decrease statewide over the last decade, with Maine, Pennsylvania and Vermont close to following suit, according to the latest census figures. As a nation, the U.S. population grew by just 9.7 percent since 2000, the lowest decennial rate since the Great Depression."

What's the significance for church leaders? Well, beyond the obvious ministerial needs and challenges that churches located in dying counties can help meet, there's another separate-but-significant connection. The AP says two primary reasons for "natural decrease" are an aging population and a poor economy.

It's the second reason that church leaders should especially note. As municipalities–dying or not–continue to struggle with shrinking tax revenues, and aggressively look for ways to survive, churches and nonprofits will only find it tougher to avoid taxes and tougher zoning restrictions.

A year ago, we saw the question of taxing churches unfold publicly in places like Utah, Ohio, and Indiana.

On the zoning front, challenges with ordinances appears, as one attorney puts it, to be "heating up" for churches because of the economy (and that's saying something–zoning issues are already one of the top five reasons churches go to court each year).

In the March issue of Christianity Today, the magazine cites multiple examples of churches battling zoning ordinances. Even though the Religious Land Use and Institutionalized Persons Act (RLUIPA) was passed more than a decade ago, protecting houses of worship from discrimination, some churches still face hostile governing bodies. And those challenges come with a cost: Pricey legal battles to fight ordinances that are usually put into place by cities that want property used for business (and tax-generating) purposes.

Christianity Today cites one recent example:

The city council of Burbank, Illinois, passed a new zoning law late last year banning churches from building in commercial areas. The action came after Rios de Agua Viva, a Hispanic congregation, signed a $900,000 contract to transform an old restaurant into its new sanctuary.

Sadly, churches with building or expansion plans, regardless of what part of the country, may face similar sentiments. The article continues:

More than a decade after RLUIPA's passage, however, many religious institutions face lengthy, costly battles to exercise their freedom to worship, said Richard Baker, an attorney who is representing the Burbank church.
"Churches do not realize the fight they're in," Baker said. "If you go into a commercial district, they say you're wrecking their tax base. If you go into residential, they say you're disturbing their peace."

What tax and zoning challenges have you observed in your area? Are declining city and county coffers the primary reason? How have churches successfully navigated those choppy waters? Or not?

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is published with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations

Comments

Displaying 1–1 of 1 comments

Dr. James Willingham

May 02, 2011  9:41pm

The price our nation will pay for this hostile and destructive attitude toward our churches is only beginning to be realized. The tornadoes, tsunamis, and earthquakes are expressions of judgment even if they are not the result of natural processes, i.e., some Tesla developments in the wrong hands. The hour that is to try the whole earth (Rev.3:10) is almost upon us. Shall we be driven to our knees by the awful burdens of tht time, pleading the promises set forth by Jonathan Edwards in his Humble Attempt which promises were pleaded by Carey and others in the launching of the Great Century of Missions and the experiencing of the Second Great Awakening?

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