New York Lawmaker Proposes Property Tax for Some Nonprofits

As part of an effort to develop a budget that provides tax relief to some residents of the state, a New York lawmaker is drafting a proposal that would require nonprofits to pay property taxes, the Albany Times Union reports.

State Senate officials said a soon-to-be-released budget resolution is likely include at least parts of a circuit-breaker bill introduced by Sen. Jeff Klein (D-Bronx) calling for a $290 million State Tax Relief program that would give property taxpaying senior citizens a tax credit or rebate based on their income level. To help cover the estimated $1.2 billion cost of the program, Senate Majority Leader Pedro Espada (D-Bronx) said he is researching a revenue-raising proposal that would require nonprofits in the state to pay into the real estate tax base, with some exceptions made for small nonprofits and other organizations. According to some estimates, the proposal, which is expected to be introduced next week, would generate hundreds of millions of dollars in new tax revenue.

The idea is similar to a plan developed by Richard Ravitch last year, before he became lieutenant governor of the state. The Ravitch plan imposed a payroll tax on all New York City-area employers, including nonprofits, as a way to generate revenue for the perennially cash-strapped Metropolitan Transportation Authority. Asked his thoughts on Espada's idea, Ravitch noted that the State Senate passed the tax only after lawmakers in Albany agreed to exempt public schools and added, "It's complicated."

Still, nonprofit leaders are concerned about what the proposal will mean for them if it does pass. "It's the worst possible time to place additional financial burdens on the nonprofit community," said Gene DeSantis, who represents hundreds of nonprofit children's camps. "Demand for services is sky high and philanthropic giving is at rock bottom."

James M. Odato. "Property Taxes Possible for Private Colleges." Albany Times Union 03/17/2010.