Utica Nonprofit

There are ways to lessen 

string of tax-exemptions

Tax exemptions can help spur economic growth

 through incentives and provide valuable 

nonprofit organizations with relief. They also 

can be a drain 

on the tax base.

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• • A taxing issue: Exemptions good for some, problem for others

Amanda Fries

Keshia Clukey 
Posted Jan. 27, 2014 @ 8:00 am 

ConMed Corp. was fortunate enough to acquire a building several years ago that had a tax incentive.

"It was one of the many factors that enticed us to relocate production from another facility here," said Luke Pomilio, ConMed vice president and controller of its corporate headquarters on French Road in Utica.

The payment-in-lieu-of-taxes agreement helped relieve the costs of improving the building, as well as hiring and training new employees, he said.

Tax exemptions can help spur economic growth through incentives and provide valuable nonprofit organizations with relief. They also can be a drain on the tax base.

When a municipality's tax base is reduced from exemptions and agree

ments such as PILOTs, the burden is put not only on the taxpayers, but on the government and the school districts.

But there are ways to keep a healthy tax base while growing the community. They include fewer exemptions, charging user fees, compromising on agreements and consolidation of services.

"We make the assumption that all of these things are good," said Fiscal Policy Institute Executive Director Frederick Floss about giving tax exemptions. "We should not agree to as many of them without asking, 'What is the benefit? What is the cost?'"

Fewer exemptions, more fees

The majority of exemptions are created by the state legislature, though some can be enacted by local law, said Anthony Carvelli, Oneida County commissioner of finance.

So changes would have to take place at a state level.

Some nonprofits, such as hospitals or colleges, have for-profit agencies working on their property that should pay a portion of property taxes, said Doug Sauer, chief executive officer for the New York Council of Nonprofits Inc.

"It's up to the local municipality to make sure the property is being used exclusively for charity … for the purpose of exemption," he said.

The state Council of Nonprofits is advocating for legislation that if a property is not used within six to seven years for charitable purposes, it would be converted once again to taxable property — eliminating abandoned tax-exempt properties, Sauer said.

The Herkimer ARC already does this.

At its 420 E. German St. location in Herkimer, portions of the building are taxable because the Herkimer County Chamber of Commerce and an attorney are located there.

Another option is charging user fees, something several communities have done — for example, charging fees for public safety services, Sauer said.

The idea of a service fee on nonprofits to lessen the property taxpayers' burden is not new – Utica has discussed it several times in the past, but a proposal never has passed the Common Council because the city cannot single out nonprofits.

Read more: http://www.uticaod.com/article/20140126/NEWS/140129448#ixzz2s8UTTudt