Does help for communities justify churches’ tax exemption?

GORDON ASKS:

(Paraphrased) Secularists challenge tax exemptions for houses of worship, saying this denies valuable revenue to communities that get little or nothing in return. True?

THE GUY ANSWERS:

False, judging from new scholarly research.

Putting money aside for a moment, those knowledgeable about troubled urban neighborhoods will especially shudder to think what local conditions might be like if taxation forced financially strapped congregations to disband. Even small, struggling flocks that lack the money for professional social services provide their members (according to the members themselves) spiritual and emotional uplift and fellowship that can also enhance their neighborhoods. Numerous surveys indicate that people involved with religious faiths often gain in perceived well-being.

That said, such benefits are subjective and difficult to measure, and in any event secularists will contend that they do not make up for the property taxes cities lose when churches (or synagogues or mosques) are exempt. Secularists are less likely to protest tax exemptions enjoyed by groups that promote a secular worldview. The Guy has long assumed that in addition to personal benefits, which indeed are incalculable, it seems plausible that congregations help their areas economically, but admits his hunch has been based on mere anecdotal evidence and sentiment.

But now we have some solid data on economic impact. This year an academic journal in this field reported intriguing research by a team led by Ram A. Cnaan of the University of Pennsylvania School of Social Policy and Practice. Cnaan, a prolific scholar on the societal effects of non-profit groups in the U.S. and internationally, is the school’s associate dean for research and chairs its doctoral program in social welfare. Cnaan and his colleagues boldly contend that benefits to the community can be assessed in hard dollar terms and that the totals are impressive.

In a preliminary phase of this research, Cnaan looked at 18 economic factors and estimated the rough value of a typical urban congregation’s contribution to the local economy at $476,663 per year. Applying the latest “valuation” theory, the 2013 follow-up examines in greater detail 49 factors in the operations of a dozen Philadelphia congregations, 10 Protestant, one Catholic, and one Jewish. The team calculates their total economic contribution at $51.85 million a year or an average of $4.32 million per congregation. The researchers assert that the actual impact is very likely greater than that. For instance, they did not estimate the value of lower crime rates and higher housing values when congregations are present; or individual advancement provided through music performance, public speaking, and leadership training; or personal help for neighbors who are not members of the congregation.

The most obvious contribution in dollar terms is a congregation’s annual spending, including building projects. Other points are the worth of religious schooling; “magnet effect” in spending by outsiders attending worship and special events; hourly value of volunteers’ work in the neighborhood; formal social services; informal aid; job training and placement; fostering of local business startups and investment; specific cases of preventing suicide, substance abuse, and spousal abuse; verifiable health benefits; teaching of pro-social values to youths; elder care; and much else.

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Taking a legal walk in a church’s non-religious woods

For decades, I have been covering stories involving clashes between religious organizations and state and county tax officials. The key plot elements in these legal dramas usually include:

* The church is a growing nondenominational Christian group. In other words, an independent congregation with little or no access to national church-state lawyers.

* Neighbors are worried about the church’s expanding facilities and the impact on traffic.

* Tax officials want more revenue. Duh.

* There is some question about whether some of the land is being used in a way inconsistent with the church’s non-profit status (think concerts, athletic events, food festivals, etc.)

At the moment, The Washington Post is covering a pretty typical battle in nearby Prince William County. The top of the story is very straightforward — then hits the key snag in the case.

Behind New Life Gainesville church in western Prince William County, there’s a gravel path that leads to a thick grove of tall pines and rippling streams.

As far as New Life leaders are concerned, that land is part of their church and should enjoy the same tax-exempt status as the building that holds the arched-ceiling chapel. But county officials have a different view: They say the woods aren’t used for religious purposes and should be taxed. When the county sent a $1,000 property tax bill, church leaders were not happy.

“Giving glory to God … is not taxable,” said Pastor Mike Hilson, who recently joined New Life Gainesville, formerly Fireside Wesleyan Church.

Prince William officials say that taxing some land owned by religious institutions is nothing new and that they are simply following state law, which mandates that only land that is “exclusively” for religious use is tax-exempt.

That’s interesting. So the issue isn’t that the church is using the land in any way that violates its non-profit status. The growing congregation is not, at this point, using the land at all. So if the church held regular prayer walks through the grove it would suddenly become religious?

Late in the story, the Post team notes another relevant wrinkle in this case:

Both sides in the Prince William debate agree that for-profit ventures on church land — such as a cafe or rental housing — should be taxed. But leaders at New Life Gainesville say the woods behind their church do not bring in any revenue. And because the land is in a protected rural area, the church cannot divide off the taxed land and sell it.

“The idea we’re going to throw a Starbucks back here is kind of ridiculous,” Hilson said.

County officials say they are simply following existing laws at the local level. Meanwhile, Virginia leaders are concerned about clarity in the state’s laws.

The Post also quotes a local-level expert, who rather predictably notes the following:

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