Beaufort's proposed fee on nonprofits should go

info@islandpacket.comMay 28, 2013 

4/11/12 Jay Karr/The Island Packet--A group of people crosses Ribaut Road at the crosswalk at the Beaufort Memorial Hospital's south entrance on Wednesday. The hospital is working with city, county and state officials to make crossing Ribaut Road to the employee parking lot safer.

FILE, STAFF PHOTO

The city of Beaufort's proposal to tax nonprofit organizations is a bad idea.

At the very least, this change to a long-term social compact with the community needs a fuller explanation and longer discussion. That cannot happen when it is already in the proposed 2014 budget.

Beaufort's proposed budget calls for a new "public service fee" that would generate $301,254 from nonprofits by charging them 0.01 percent of their property's appraised value. The money would go to emergency-response services, such as police and fire protection, "to contribute toward the increased demand for timely and high-quality emergency responses," according to a city budget presentation.

But first, the city should show it has the legal power to enact such a fee or tax. The targeted organizations -- Beaufort Memorial Hospital, schools such as the Technical College of the Lowcountry and the University of South Carolina Beaufort, churches and nonprofit organizations -- do not pay property taxes for many good reasons.

The city of Beaufort should better appreciate those reasons.

Nonprofits provide services to the community that lessen the burden on government.

Nonprofits enhance the quality of life, which brings in businesses and residents, who pay property taxes.

They fuel the economy by providing jobs. Beaufort Memorial Hospital's economic benefit to Beaufort -- not to mention the value of its services -- is significant, to say the least. The same can be said of the Technical College of the Lowcountry and the University of South Carolina Beaufort, which the city is working hard to build up.

Nonprofits generate philanthropy and volunteerism, which gives people greater personal ownership in their community.

They add a vibrancy that the city of Beaufort and other communities seek.

State law recognizes this through its tax policy, and local governments should not search for ways to renege on that compact.

In Beaufort, 525 properties, or 8 percent, are tax exempt. The value of that land is almost $202 million, or 9 percent of total appraised values.

That is not an insurmountable burden that begs for change. It is not as if Beaufort is a college town engulfed by a single nonprofit organization.

Cities around the nation are trying to tap into nonprofits by charging what are sometimes called PILOTs -- payment in lieu of taxes. Sometimes the payment is called voluntary. Sometimes the sum is negotiated, with both sides agreeing they need each other and should help each other. Often, they are controversial and acrimonious.

The Beaufort proposal represents a major change in public policy that requires a great deal more community thought and legal testing on the city's dime. This proposal involves much more than plugging holes in an annual budget.

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