A District of Columbia government proposal to require non-profit organizations to pay property taxes could have devastating financial implications for B’nai B’rith International.
B’nai B’rith is believed to be the only non-religious national Jewish organization that owns property here.
Proposed by Frank Smith, D.C. councilman, the legislation would cost B’nai B’rith, whose international headquarters is here, an estimated $125,000, said Stanley Berman, director of B’nai B’rith’s Fiscal Operations.
The move comes as many non-profit organizations face shrinking budgets. It also comes as the District of Columbia is facing its own fiscal crisis, teetering on the brink of bankruptcy.
“The need to identify untapped financial resources has made it more crucial to spread the tax burden”, Smith said in a statement. “This legislation is a relief on the tax-paying residents and businesses of our city”.
The proposed legislation, known as the “Special Real Property Tax Amendment of 1995” would amend a 1974 law that made non-profit organization exempt from property taxes. It would create a special tax rate for their property, about 50 percent of the current property tax rate, which stands at $1.85 per $100 of assessed value, according to a spokesman for Smith.
The bill, which one observer called a “tragedy” for all non-profits, would not affect synagogues and religious organizations. Groups such as the Religious Action Center of Reform Judaism, which also owns property here, would be exempt.
However, the legislation could provide a financial blow to B’nai B’rith, the 150-year old international service and defense organization.
Cuts in the organization’s budget would be the only thing that would keep the property tax from being a blow, Berman said.
If the tax goes through, B’nai B’rith “probably would not be doing some of the things we are now”, he said.
The organization cannot absorb the extra $125,000, which Berman called a “pure increase in overhead”.
Like many non-profit organizations, B’nai B’rith has seen donations, its traditional source of revenue, level off.
Under a prior deal worked out with Congress, the organization already pays about $8,000 in taxes on space it rents to the Council of Jewish Federations, the Hebrew Immigrant Aid Society and the National Conference on Soviet Jewry. That would not change with the new bill, Berman said.
The D.C. Jewish Community Center could also be affected by the bill.
The JCC is renovating an old building that the organization expects to move into next year. Paul Scham, the assistant executive director, said he did not want to comment on the issue.
The bill does allow room for exemptions, but neither Berman nor Scham would speculate on their organizations’ chances for one.
Although taxing non-profits is not a common practice, at least three other states are in the process of developing legislation to do so, a spokesman for Smith’s office said.
It is not yet clear how much support on the council exists for the legislation, which also requires approval by the U.S. Congress.
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The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
