The Plain Dealer reported (November 15, 2009) that consultants hired by the City of Cleveland have proposed that nonprofit organizations pay an annual fee in lieu of property taxes in an effort to boost the city's revenue. Institutions like The Cleveland Clinic, The Cleveland Museum of Art and Case Western Reserve University would be among some of the major regional stakeholders affected by the proposal, which has been carried out in one form or another in the cities of Boston, Pittsburgh and Madison, Wisconsin.
Property taxation, or alternatively, fees for municipal services to tax-exempt organizations, is not a new concept; a 2006 report by the Chronicle of Philanthropy stated that property-tax exemption in 23 of the 30 largest U.S. cities (by population size) was costing those cities $1.5 billion annually.
Earlier this year Minnesota legislators amended their state law regarding charitable property-tax exemptions, implementing a 6-point system for determining eligibility for property-tax exemption status. The bill, along with the 6 criteria, can be read here.
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