Taxes and Fees: Paying the Piper
The Rev. Mat Brown, pastor of Branch's Baptist Church in Richmond, raises an interesting question about the city's new stormwater runoff fee. It looks a lot like a tax -- and churches are supposed to be exempt from taxation.
The stormwater runoff fee assesses property owners based on the amount of impervious surface (such as parking lot square footage) their property contains. The fee goes to maintaining and improving the city's stormwater management system, which the city is obliged to do because of state and federal mandates -- not to mention sound environmental stewardship.
From that perspective, the stormwater runoff assessment looks a lot like a utility service fee, akin to the fees that residents and businesses pay for garbage collection or water. And indeed, the stormwater utility management fund falls under the management of the Department of Public Utilities.
But here is where the metaphysical question grows blurry. As the DPU Web site notes, "Historically, money from the City's General Fund has provided limited funding for stormwater operations." Stormwater management that used to be supported by general tax revenue is now being supported by a user fee. It's not hard to see why the Rev. Brown's hackles have been raised.
It's also not hard to see how a proliferation of fees could wind up resembling taxation by another name. Across the country, states and localities have begun tacking on fees to pay for what used to be basic services. Winter Haven, Fla., charges a "cash-per-crash" fee to motorists involved in collisions to defray the cost of police and fire response crews. Santa Rosa, Calif., is considering a monthly $4 fee to underwrite 911 services. (You can choose not to pay it -- but if you dial 911, the call will cost you $350.)
Needless to say, the localities are not cutting their general taxes to offset the higher charges they are imposing for everything from birth certificates to landfill access. Neither is Richmond cutting its real-estate or personal-property tax rates to offset the new stormwater utility fee.
Our sense is that Richmond's stormwater fee is justified, and that it does qualify as the type of utility service fee churches and nonprofits can reasonably be expected to pay. But perhaps the introduction of the fee makes a good occasion for a frank discussion about which services should be paid for out of general tax revenue and which ought to be paid for through graduated user fees.
The question applies not only locally, but also at the state level: Gubernatorial candidate Bob McDonnell would appropriate a larger share of general-fund dollars to transportation, a service that has long relied heavily on gasoline taxes and tolls. And many parents are upset by the proliferation of fees assessed by their local schools, which are supposed to be supported by taxes. If local and state governments raise fees without lowering general tax rates accordingly, then the fees begin to look like nothing more than taxes by another name. The public deserves better.
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Rev. Brown: With all due respect, you just don’t get it. What could be more fair than charging “users” of the stormwater systems than those who contribute? If non-resdients of the city attend your church and use the property, why should they be using this service for free?
By the way, Chesterfield has been charging for development in certain areas with drainage problem for years. This idea is nothing new.
“My arguement is this: For over two hundred years, City, State and Federal Governments have all agreed that the Churches do immeasurable good for the community and for society - thus, they should not be taxed. This “fee” is a tax - let’s not kid ourselves. And frankly, it is a slap in the face to the “volunteers” who have served this City well.“
Rev. Brown, thanks for for you do for the community, but you are aware that many of us give free of our time and selves to the community AND pay taxes? Churches bring in money hand over fist and the government doesn’t touch it. Those huge, glorious churches weren’t built with solely with good intentions; they were built using tax-free cash. I didn’t get that break on my house. Churches go far beyond what is necessary for worship and ministry. Many are quite opulent and lavish… church monies are just as often spent on self-glorification as they are put toward the welfare of the community (yes, I said SELF-glorification… I’m pretty sure God is not concerned with stained glass frescoes and golden goblets). Churches are great machines for generating revenue, let us not kid ourselves, yet they are exempt from taxes while still receiving the benefits tax monies provide, unlike secular society.
The least you and your can do is pay for the services which you require. You want to build a 100 car parking lot? All of that drain water that used to soak into the ground has to go somewhere and thus necessitates more infrastructure to accommodate it. Why should the rest of our society (secularists included) shoulder the burden for the need you and yours generate?
Yes, you do good things for the community. Thank you. So do I. However, I’m not of the perception that my piety should exempt me from paying for my share of the damage.
Another analogy that may work better is if the hospital had to add additional custodial workers to clean up trash and garbage, part of which is generated by the volunteers. The hospital then decided to require eveyone who generates trash, including the volunteers, to help pay for the clean up. Of course the volunteers would cry out, “You can’t make us pay for this! Look at the good we do! So what if we add to your trash problem!“
This seems to be a point that is being missed. Our houses of worship, with their parking lots, generate a tremendous amount of storm water run off which goes into the ground or sewer system. These runoffs ultimately hit the James which feeds into the Bay. We contribute to that problem.
I attend church weekly, sit on our vestry and participate fully in the life of our community. I work with our budget and I know that our fee will hit our bottom line hard. But, as a Christian, I also recognize that the God we serve calls us to be faithful stewards of His creation.
This is Rev. Brown - Thanks for your editorial on this matter. I hope the major point has not been missed: Churches already do so much for the City! Here is the analogy that I gave at the City Council meeting a couple of weeks ago: Imagine what would happen if a hospital administrator needed money to buy a new x-ray machine - so, he looks around and thinks, “Who around here isn’t paying anything? Ahah, the volunteers!“ So, he goes to the volunteers sitting behind the desk and the lady who delivers flowers and he says, “You are using our desk, our computer and our cart - you are going to have to start paying a ‘fee.‘
If that happened, how many volunteers would continue to work for that hospital? The Churches are the volunteers in the City and the city is saying - “Thanks for all you do but, now we are going to start charging you this fee.“
My arguement is this: For over two hundred years, City, State and Federal Governments have all agreed that the Churches do immeasurable good for the community and for society - thus, they should not be taxed. This “fee” is a tax - let’s not kid ourselves. And frankly, it is a slap in the face to the “volunteers” who have served this City well.
To most people there isn’t a difference between a fee and a tax. It’s all green, as in cash.
A dedicated fee has the advantage of being held separately, and the flow of money allows borrowing against that cash flow to do very large projects that probably wouldn’t be done otherwise. That is because there are all kinds of restrictions on general obligation borrowing, versus revenue bonds.
There are a lot of people who would prefer that they pay nothing. That’s okay, so long as they don’t complain about nothing being done. Of course, that isn’t the case, because everybody wants something for nothing.
The vast majority of people don’t know how bad the state’s transportation funding situation is. It’s not just about potholes or even congestion - the state is a couple of years away from not being able to draw on federal transportation funds for construction of any kind.
To fix it, you need an additional $500 million or so per year forever. So there’s the choice - do nothing, raise taxes on everybody, or charge fees to the logical sources of transportation problems. That is why I’d rather have a nickel gas tax and some tolls rather than see income taxes eventually have to cover it.
And for storm water I’d rather pay $45 knowing that all those tax exempts with huge parking lots like VCU will pay rather than have my real estate tax rate go up to cover them.
Government at all levels is out of control. The ‘tax’ vs. ‘fee’ dodge is just another case of semantics masking realities. Taxes are also called ‘investments’, but anybody like the return on their ‘investment’ in government? Any brokerage firm that squandered investment capital like this would not only be out of business, but would be in court alongside Bernie Madoff. Saaaaayyyyyy… What a good idea!
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