Here in Wicomico County, the public and non-profit sectors own a lot of property. They seem to be buying more every day. I have heard several people make the same statement:
In 10 years, every piece of property from US 50 south to the Fruitland city line, from Camden Avenue east to Eastern Shore Drive will be owned by either PRMC or Salisbury University.
Of course, this is an exaggeration. However, there is no question that these two institutions own huge blocks of real estate. They are also two of the largest employers in the area.
In addition, we see other non-profit institutions gobbling up property and taking it (at least partially) off of the tax rolls. The Tri-County Council has purchased the former Filtronic Comtek property at US 50 and Walston Switch Road. Oak Ridge Baptist Church owns the K-Mart Shopping Center at US 50 and Tilghman Road.
Some of these properties are being used (again, at least partially) for commercial purposes. Do these non-profits, pay property taxes on at least the commercially used portion of these properties. Should they?
The good news is that they do.
When Seagull Square (the former Allenwood Shopping Center) opens for business this summer, the ground floor (which is commercial space) will be taxable. This should be a big help to Wicomico County. The property is quite valuable and will add a needed boost to property tax revenue outside of the confines of the revenue cap.
PRMC has a valuable community mission. They also own tens of millions of dollars of property. However, if a piece of property is being used commercially OR not being used in furtherance of the hospital’s mission, they pay taxes on it. One example is space they lease to doctors. This also applies to the former Daily Times building across Carroll Street from the main campus. Until PRMC decides (exactly) what to do with the property, and only IF the property is being used as part of the hospital’s core mission, will it come off of the tax rolls.
Before you start asking if I have taken a consulting contract with the University or if I’m shilling for PRMC because I have relatives in the medical field, let me assure you that the answer is no. The original premise of this column was the same; to examine whether or not property owned by non-profit institutions, but used for commercial purposes, was being taxed. It was my understanding that the Seagull Square property would be wholly exempt. I knew that PRMC leased office space to doctors, and understood that they did not pay taxes on that square footage. PRMC refused to answer my questions; which always makes you suspicious.
However, the State Department of Assessments and Taxation did. They also provided me with data to show that these two institutions, along with several others like Oak Ridge Baptist Church, did pay property taxes on property that was not being used in furtherance of their core missions.
None of us enjoy paying taxes. We also want to believe that we’re not being asked to pay more than our fair share. It’s good to know that, at least in this instance, institutions such as SU aren’t taking property off of the tax rolls and then using it for commercials purposes without having to pay their fair share.
I apologize for this column being so late. I had everything finished but the concluding paragraph and was called away. – Ed.
G. A. Harrison is the Managing Editor of “Salisbury News”. “Delmarva Dealings” appears each Wednesday and Sunday at Noon on SbyNEWS.com.
19600903
9 comments:
GA
University Park Apartments - the complex on Milford Street - http://www.upsalisbury.com/ -
does not pay taxes. It is privately owned and has entered into a 99 year lease with SU. At the end of 99 years the property goes to SU.
There is considerable amount of private acreage that was gobbled-up by SU when they embarked on this project. You might want to expand your geographic map of governmental owned properties to include areas north and south of Milford Street.
Anon 1939 -
You are absolutely correct about University Park. This issue was brought up by members of Salisbury City Council. Unfortunately, the state claims that this is tax exempt. I don't really agree.
I'm not arguing that everything is perfect. I was just pleasantly surprised that the system worked as well as it did.
The land that UP sits on is owned by you - yes, you - the taxpayer. Paying taxes from yourself to yourself just doesn't make a lot of sense.
"NON-PROFIT" simply means you don't have any money left over at the end of your fiscal year. The revenue simply has to be eaten up by COSTS whether that be a new Mercedes for the CEO's wife or many $3,000/night stays during business meetings such as the former IMF chief was racking up. You have to look at PERCENTAGE of revenue goes towards worthy causes from a non-profit (including PRMC).
As an example, consider the Surfrider's Foundation in OC. They collect funds & grants but what do they actually do? They don't clean the beaches but they do tell you not to litter. Some number of people get compensated for keeping the organization going and they can avoid taxes by being "non-profit".
Anon 2103 -
Yes, it is my understanding that SU owns the land. However, a for profit company owns the buildings and earns a profit renting out residence space. That land is being used for a commercial enterprise.
****************
Anon 2134 -
Your understanding of what is a non-profit is not quite accurate. According to PRMC's last financial statement they made a profit last year of around $20 million. They simply call it surplus instead of profit.
Non-profits are supposed to have some charitable mission. I realize that there is a ton of wiggle room in that.
Your point about the Surfrider's Foundation is well made. While I do not know anything about them, I am aware of many "political" non-profits. These are found on the left and on the right. In fact, I have supported several such conservative groups over the years. I believe that some are worthy of their tax-exemption and others are simply campaign tools that aren't forced to pay taxes.
PRMC is a "Not for Profit" organization , rather than a "Non Profit". This is what I've been told. I don't understand if there is a difference.
Great article, G.A.!
I don't understand how PRMC can state they are not for profit.
They're making money hand over fist and STILL asking the public to donate to their building funds!
I think you should tax all the food the President from Salisbury State Eats; enough tax revenue will be created to elliminate the recession we are in.
I am suprised she does not ride in a dump truck; paid for of course by the tax payers of Maryland like her home; food; car and 250,000 a year salary.
Post a Comment