It's Your Money: Non-profits and property taxes

Posted at: 02/26/2013 6:03 PM
Updated at: 02/26/2013 7:23 PM
By: Ray Levato

Did you know that about half of the buildings in the city are owned by non profits, meaning they're exempt from paying property taxes. So does the law need to be changed to let cities collect more revenue?

The mayor of Syracuse says cities across New York are facing possible bankruptcy. She's proposing the state allow cities to impose impact fees on non-profits. News10NBC looked into this and found out the city of Rochester already does impose a sidewalk service fee for non-profits.

The University of Rochester and its Strong Memorial Hospital, Eastman School and Memorial Art Gallery, is the biggest non-profit institution in Rochester. But the U of R pays no property taxes for city services.  Former Brighton councilman Ray Tierney puts the new U of R College Town project at Mt. Hope and Elmwood under the microscope.

Ray Tierney, former Brighton councilman, said, “It's just raising the property taxes on everyone else because we're not going to be able to decide as a community not to improve the highways, to cut down on emergency services. This is really about integrity of our community. This is really about quality if life.”

Not only is the developer getting tax breaks, but he won't pay full taxes for years. It's a deal that will cost taxpayers plenty. $26 million over 20-years to repay a federal loan that the city of Rochester took out for the project.

Tierney said, “And it's not unreasonable to sit across the table and ask the University of Rochester, the Strong Memorial complex, with $1.7 billion in an endowment to pay some fair share in this community.”

The U of R says College Town will provide sustainable economic development within the city, in addition to an estimated $2.5 million in sales tax revenue, $1.8 million in income taxes, and $600,000 in hotel taxes.

Mayor Tom Richards, Rochester mayor, said, “The choice for us is not, we'll tax you for the full amount or we'll tax you for none of it. The issue here for us is to get some of it on the tax rolls as opposed to none of it on the tax rolls. The property College Town is on and the dorms on the other side of the river, they're going to go on the tax rolls and generate hundreds of thousands of taxes for us in the very beginning.”

Besides some property taxes upfront, the city of Rochester charges all non-profits what's called a local works embellishment charge. It's $5.35 per foot of sidewalk frontage. In the U of R's case, there are 98 separate property tax parcels. The U of R pays just $341,000. That's far less than what property taxes would be on those parcels.

Mayor Richards says a fairer way to fund a city's police, fire and other services is for the state to increase aid to cities through the state income tax.  Then many people are shouldering the burden, not just property owners.