View from the Taxk Force

The last meeting of Tacoma's ground breaking Revenue Task Force (nee City Services Tax Task Force) was kinda rocky. It turns out there was a reason the city council named us "stakeholders." We were holding onto our stakes for dear life the other night. (No, we were not driving them through the hearts of our opponents.)

The voice of small nonprofits was particularly strident. Her view was that nonprofit enterprises of all sizes and descriptions are virtual monastics in service to the greater good. To suggest they might support some of the city services like fire and police protection was a heresy unworthy of any of us. Instead, we should balance the budget by eliminating COLAs for employees and letting them pay part of their health insurance to boot.

I am a heretic of long standing, so I did speak up, not on the absence of saintliness in her preferred financing scheme, but rather I pointed out that nonprofits were getting a big fat subsidy from the city when they accepted services without paying for them.

Well! (the voice was louder, of course) It's an explicit subsidy. Everybody knows about it. Payment in part for the services.

It's not explicit at all, and I said as much. It's something not paid. Nobody even knows how much it's worth.

I got support from the other economist on the Taxk Force, who diplomatically picked out the other nonprofit representatives to talk to. Our eleven members include four holding the stakes for nonprofits -- two (including the chair) from the University of Puget Sound, the aforementioned head of the nonprofit center, and an accountant whose connection to the sector is still vague in my mind.

The other economist doubted that UPS would expect the city to write out a check in the amount of service it provides. She received an answer of modest length on the value of UPS to the community and how they handle some security in-house and how the library is open to the public and heavily used. (Make a note of it. The city's libraries might be closed. Staffing is so tight there are "rolling closures" if a librarian has the temerity to get sick.)

Heretic or not, I really don't have it in for nonprofits, particularly not UPS nor the small-scale social service agencies represented by Ms. Cut-Their-Salaries-Through-the-Back-Door.

If she'd read the material, she'd see my variation on the city manager's proposal excludes all nonprofits except the very largest, say, the hospitals. It eschews the use of the property tax, which has to be levied on all property at a single rate. As a tool to get to some of the apparent tax dodges, like the small seminary which keeps the old Weyerhaeuser mansion off the books, it could work. But when applying it to operations of diverse dimensions, it becomes a blunt instrument.

I like nonprofits. I operate without making a profit myself. I'm not into squeezing turnips, either, which is what trying to get revenue form these smaller agencies amounts to. On the other hand, there's a lot of highly paid people operating in those medical centers on the hill and not paying a dime to the city.

Heck, maybe we could charge them by the ambulance load.