State and Local Govts Impose Fees on Nonprofit Groups

The Chronicle of Philanthropyreports that state and local governments which are strapped for cash are increasingly looking for new sources of revenue — including imposing fees on nonprofit groups.  States and localities are receiving money from the economic-stimulus package, but it is not enough to cover budget gaps. To find revenue, some municipalities have placed fees on tax-exempt groups to pay for city or county services.

Nonprofit organizations do not have to pay property or sales taxes, but they are liable for fees.  One Minnesota city is charging a curb fee based on property frontage as a way of generating revenue for street upkeep — and as a way to get nonprofits to chip in for the local services they receive.  Even before the recent downturn took hold, governments considered such fees to make up for losses in property taxes.

According to a 2006 Chronicle study, property-tax exemptions granted to nonprofit groups in 23 of the nation’s 30 most-populous cities cost those municipalities more than $1.5-billion annually.

SS