‘State Supreme Court does its job” —We offer this as an alternative headline to the Sept. 15 Star Tribune editorial, “All property owners must pay for services.”
Our country and our state have been steadfast in upholding written guiding principles, and courts frequently have to make determinations upon whether practices run afoul of these binding commitments. The Constitution of the state of Minnesota, adopted more than 150 years ago, on Oct. 13, 1857, clearly lays out in Article 10, Section 1, exemption from many kinds of taxation for “institutions of purely public charity,” and an even higher level of protection for churches, other houses of worship, colleges and universities. There is a long history at all levels of government of exempting nonprofit entities from taxes in exchange for their dedicating their resources to public, rather than private, missions.
So, why has there been such a fight in St. Paul and other cities around the state about this issue? Cities need money; no one argues that. Many of us, individuals and organizations alike, benefit from and want more of what cities provide. But we value transparency even more.
What started out as a political problem for St. Paul — how to hold down rising property taxes — became a legal one. Citizens want government to be straightforward with them and they seek intervention when it is not. Sometimes accountability takes place in the voting booth and sometimes in the courts.
The Sept. 15 editorial instead moved the conversation to the policy arena — should this exemption exist? But that was not the question before the court this year; those public matters are dealt with by another branch of government, the Legislature. Further, there are numerous taxes that nonprofit organizations do pay, true taxes where there is a demonstrated market benefit to the property. But creative use of language, calling something a “fee” and not a “tax” skirts constitutional authority and pits local governments against higher bodies and a public that feels deceived.
Nonprofit organizations have a unique relationship with cities , and, in fact, with government at all levels. Both exist to serve the public good, as opposed to private interests. What gets lost in these debates is the multitude of ways government and nonprofits partner to deliver services to citizens. Increasingly, governments contract much-needed services out to their nonprofit partners who can often deliver them in a more efficient and effective manner. Assessing taxes on a public partner is akin to government assessing itself, which, of course, is not done for obvious reasons. Further, nonprofit organizations are also economic drivers for communities, employing more than 10 percent of the Minnesota workforce.
This leads us to a different policy question — How do we ensure that our communities have the resources they need to provide for basic, important services we all rely on? That starts with us, as individuals. Anti-government rhetoric and slogans get us nowhere and abdicate personal responsibility for solving community problems.
In addition, nonprofit organizations need to be willing to stand side-by-side with local government officials at state capitols to educate elected officials about the need for adequate resources, including raising appropriate revenues and local government aid to pay for needed community services and basic functions of government.
Together, we are stronger, and the citizens of St. Paul and all of Minnesota will feel they are receiving value for their tax dollars so long as they can see what the cost is and it’s not a hidden line on a utility bill.
Jim Scheibel, former mayor of St. Paul, is professor of practice, Hamline University School of Business. Jeannie Fox is director of nonprofit management programs and professor of practice, Hamline University School of Business.