Hughes: Shortsighted to tax non-profits

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Allen County Councilwoman Paula Hughes recently wrote an op-ed piece for the Journal Gazette.

It appeared in the January 12, 2009 edition. Although she has announced she will not seek re-election for County Council, she will likely seek the Republican nomination for Mayor of Fort Wayne in the 2011 Primary. With her permission, the column is reprinted here. Also, weigh in on the issue in the poll to the left of this post.

Regarding the story, “Mayor’s 2010 full of resolve: Tax options, trash pact among key challenges” (Jan. 1):

The Urban Mayor’s Caucus of Indiana, led by Fort Wayne’s own Mayor Tom Henry, is lobbying to tax non-profit and church-affiliated organizations to make up for the cities’ revenue deficiencies. It is shortsighted and bad policy to think of taxing the entities that provide the services governments cannot and will not effectively provide. These services aren’t just nice for the community; they are basic and vital.

We all know that we’re facing some of the most challenging financial times in America’s history. As jobs have become scarce and many people who once felt secure in their employment and finances find themselves out of work, not for weeks, but for months, it is our area’s non-profits that have stepped up to help despite severe cuts in funding from their members, donors and state and national governments.

Local food banks experienced a 60 percent increase in demand in the last two years, yet this year Community Harvest Food Bank still managed a massive food distribution to area Salvation Army clients. The Salvation Army in Allen County, meanwhile, was able to serve nearly 7,000 meals to the hungry and give another 4,000 children toys and clothes, even though two weeks before Christmas the agency announced red kettle donations were 50 percent from goal.

Local governments are hungry, too. There are few exceptions to the list of counties, cities or towns that are not severely affected by this deep recession and tax revenue shortfalls from the recently passed circuit-breaker legislation. That is not an excuse to tax the very entities that help our most vulnerable citizens during this most critical time.

City government could take a lesson from the non-profits they propose taxing. These organizations survived on less and did more. Instead of paying thousands of dollars to lobbyists to bring gambling to Fort Wayne, the administration needs to tighten its belt. County government officials have done so by cutting expenses each year for the past several years in response to revenue shortfalls from Fort Wayne’s annexation policies. County residents, meanwhile, have not seen a decline in essential services.

If Henry’s plan to tax non-profits passes in Fort Wayne or in any of the 32 largest Indiana cities represented by the caucus he now leads, what essential services would non-profit agencies have to sacrifice to deal with the extra burden, and who in those communities would suffer? How much extra would United Way, Arts United and their agencies have to raise each year to offset that tax burden?

Let’s not put in place public policies that are counterproductive – or even destructive – for the very entities that help our neighbors, our family members and our friends. We can – and must – do better than that. This administration has lost its compass. It’s time our city found its direction and a mayor who is able and willing to lead in that effort.

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