About Me

My photo
Nazareth, Pa., United States

Tuesday, May 27, 2014

Northampton County's Quiet War on the Church

Covenant United Methodist Church
By all outward appearances, Northampton County government is church-friendly. Before every meeting, all Council members and the Executive rise in prayer. A former and current member of Council are clergymen. Despite occasional grumbling from an atheist here and there, a plaque with the Ten Commandments defiantly adorns historic Courtroom One. But behind the scenes, little known to even elected officials, a quiet war has recently been declared against the Church. This is the story of that conflict.

It's an old story, really. Since the days of Henry II and St. Thomas Becket, government officials have always wanted more money than churches are willing to give. In Northampton County, the Revenue Appeals Board has assumed Henry II's crown. Starting ironically on St. Patrick's Day, 34 churches have been summoned to justify their tax exemptions. This is part of a process that this Board decided on itself, without a formal resolution or ordinance from County Council.

The Revenue Appeals Board

What is the Revenue Appeals Board? It's a five-person board, appointed by the Executive and confirmed by Council, who are paid to hear assessment appeals filed by property owners and taxing bodies. They can lower or raise a property assessment, and can declare a property exempt, taking it off the tax rolls.

It is supposed to be a quasi judicial body, but it has played favorites. Late last year, worried that multimillionaire developer Mark Mulligan might back out of purchasing the Wolf Building from the County, the Board entertained and granted a late appeal to reduce the assessment, in complete violation of county law. The person who strongly advocated for this illegal reduction, Richard McAteer, happens to be a member of the Revenue Appeals Board. He also chairs the Easton Redevelopment Authority. Wearing his Revenue Appeals Board hat, he voted by proxy to break a 2-2 tie in favor of a reduced development.

Charles Gordon, the Solicitor who represents this Board, was asked how he could allow a member of a quasi judicial body to vote on a matter in which he heard none of the evidence. "Nobody asked me," he answered.

No Reassessment since 1995 

Northampton County has a $8.834 billion assessed value tax base. This is where the property taxes imposed by all municipalities and school districts are derived. There's been no appreciable increase in recent years, thanks to the Great Recession, a stalled real estate market and an increase in assessment appeals in recent years.

These appeals stem from the inequities that result from a lack of reassessment. Politically unpopular and costly, there has been no county-wide reassessment since 1995. They are often perceived as tax hikes in disguise, especially to those who end up paying higher taxes. State law, however, requires that the process must be revenue neutral. Some property owners would also see their taxes go down.

Because there's no political will for reassessment, County officials began turning their eyes on nonprofits as a revenue source, much as Henry II looked on the church. And for good reason. Nine percent of the County tax base, or $770 million, is listed as exempt. That's 4,060 parcels.

The ArtsQuest Exemption

In 2012, when ArtsQuest sought an exemption for two South Side Bethlehem parcels, Council member Lamont McClure and Controller Steve Barron fought against it. McClure threatened to withhold hotel tax revenue already pledged to the Jeff Parks nonprofit, while Barron complained about "the funnel of cash going down there."

Council member Peg Ferraro disagreed, calling the ArtsQuest improvements a "blessing" and "asset to all of us." Echoing Ferraro, Council member Ken Kraft called ArtsQuest founder Jeff Parks a "visionary" under attack by "jealous people" in what seemed to him like a "witch hunt".

A Back Door Reassessment of Nonprofits? 

What was unknown at the time of the ArtsQuest debate is that the Revenue Appeals Board had already ordered assessors to review all 4,060 exempt parcels. By reviewing all parcels, the Board could avoid a claim of spot assessment, i.e. a property owner being singled out. It's unclear whether the county board has any independent authority to review an assessment without a request by the property owner or a taxing body. In a recent Warren County case, a county court ruled that a county revenue appeals board has no authority, on its own initiative, to change the exempt status of a nonprofit. But that's precisely what has happened in Northampton County. Reviews were completed early this year, and the Board started exemption hearings on St. Patrick's Day. Because the Board has targeted all nonprofits, numerous small churches scattered throughout the County are being put through the ringer.

War on the Church

In many cases, the Board has learned that parsonages and convents are listed as exempt properties, and the churches responsible have quickly agreed to start paying taxes. Even in the case of Roseto's Independent Presbyterian Church, where the Pastor lives in just 292 sq ft, taxes were imposed. But other decisions are even more questionable.

One of these small churches is Covenant United Methodist Church, located in Klecknersville. Built in the '60s, the Church was surrounded by acres of grassland. Some was converted into a baseball field, and a farmer approached the Church for permission to till the remaining land. The Church, which would otherwise have to spend money cutting the grass, agreed.  After a few years, the farmer asked the church if he could make a donation every year. If he plants soybean or corn, that donation could be $400. If it's grass, like this year, it's around $250.

At an April 22 hearing, the Revenue Appeals Board decided to tax this land. It determined that four acres are being farmed, though it conducted no survey. It valued the land at $29,600, or $7,400 per acre, even though it is landlocked and can only be accessed via remaining church property. This is much higher than the $4,191 per acre average paid by Northampton County for farmland preservation.

This translates to $910 in taxes, well above what the farmer is donating. Trustee Alfred Miles doubts that the land will continue to be farmed if this ruling stands.

Miles is also irked that the Board just divided four acres off the property when everything is contained on one Deed. "They did a subdivision we didn't request," he remarked. He's still scratching his head over how a church can be assessed taxes on a property from which it derives no profit and that encourages our threatened farmland.

Ironically, Northampton County has preserved over 13,000 acres of farmland with a half mill open space tax increase dedicated for that purpose.

One hand giveth, and the other taketh away.

Things could be worse. At the nearby Salem United Church of Christ, located in Moore Township, the Revenue Appeals Board imposed a $39,100 valuation on four acres being farmed. That's $9,775 per acre.

Has the Tax Basis Increased? 

In two months of hearings, the Revenue Appeals Board has added $1,469,700 in taxable assessments. Most of the increase is undisputed. This quiet war has increased the County's taxable assessments by 0.016%.

ArtsQuest is on deck.


Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...


I don't think you're reading the timeline or the facts correctly, but maybe that doesn't matter to you..

Anonymous said...

Go after hospitals next

Anonymous said...

"Donation" is another word for PAYMENT. Tax is due. Lafayette should be next on the tax rolls.

Anonymous said...

Religious and private institutions wishing exemptions should understand those exemptions cede control of their enterprise to government. The whole country-founded-for-religious-freedom thing is passe. You will pay taxes. You will make a gay wedding cake. You will collect whatever dues or taxes the government demands you do. The generation that wouldn't trust anyone over 30, is now over 50 and wants you to do exactly as the government tells you. There's no room for charitable institutions in a world where government controls everything. England has no more charity hospitals and everybody waits in line with yellow teeth, waiting months for a simple x-ray. The government is here to help.

Bernie O'Hare said...

The comment at 3:12, which blames this on Brown, is deleted. This started before he was on board.

Anonymous said...

The more government attempts to do, spread it tentacles of regulation and power, its thirst for revenue increases. I'm not against taxes, of course. I'm against tax inequities. Non-profits represent a new hunting field, for sure.

An even greater demand on the growth of tax revenues comes from growing GIFTS of tax exemptions that require someone else to fill the void such things create.

Northampton County residents like myself, and every other Pennsylvania resident reading this, now play a part in funding privately-owned office buildings in Allentown. We'll foot that bill (indirectly) for the next 30-50 years, even if the structures remain empty. A little like paying for your neighbor's new garage.

Someone once spoke about death and taxes, I think.

Fred Windish

Anonymous said...

A lot of this could stop if the legislature would require payments in lieu of taxes for certain municipal services, Not sure where one draws the line, but police and fire services should be paid by all because all benefit. That includes county buildings such as the prison, etc. Lafayette college receives no free rides, They are the largest taxpayer in the city of Easton for non education related structures,

Anonymous said...

Completely and 100% supportive of this measure.

Peter J.Cochran said...

Bernie this subject is my pet peeve.HOW DO families foster personal responsibility with household taxes when;tax free institutions may accumulate great wealth and avoid 'paying the freight'. Consider 10 men rowing upstream to catch fish to feed their families and some institution sits has 1/10th of the possession of the boat and says he doesn't row and represents an entity that has more assets that the other 9 combined and he's exempt. What happens next?

Anonymous said...

Completely and 100% supportive of this measure.

Ditto.Reassessment is sorely needed as well. Artsquest failed the test for tax exemption then was given special treatment and an appeal paid for by the previous administration.

Peter J.Cochran said...

Anon 8;07 I probably can not debate your last sentence as well as you may have stated it. However I may add that in 1998 L/C spent more than 6 million dollars acquiring the 26 properties around the North Street corridor.The March 23,2008 edition of ]Morning Call]published this account.The article stated L/C pays no taxes on it's North 3rd Street properties except for the Williams Visual Arts Building which was assessed for more than $800,000.The article stated that L/C "maintains an informal policy of paying local taxes on properties which are not directly connected to its academic mission ,such as somes student and faculty housing and storage facilities'.]Morning Call,march 23 ,2008 ed,. page A3-- I want an informal policy too,but guess what?I'm not allowed to violate the uniformity of taxation clause of the Pennsylvania Constitution and due process and EQUAL protection of law.Why do I pay and a BMW driving student's parents from Greenwich, Connecticut don't have a portion put on their freight .

Anonymous said...

Instead of deleting comments, why don't you leave them on so that we can see exactly what people say?

Also, I'm all for churches and other religious institutions being taxed. They've gotten free rides for too long.

Anonymous said...

Good read but I think the bigger picture is our entire PA tax structure but the blockheads that rule the roost, shall take no interest as it's more than they can comprehend.

Anonymous said...

I a country founded for religious liberty, it's become sport to bash churches. Meanwhile, 20% of hospital patients are in religious hospitals. They should just go away. The system can handle it like the VA.

Matt M. said...

You're all missing the point: What the board is doing is outside the scope of their authority according to the Commonwealth.

Bernie O'Hare said...

They"d be screaming at the top of their lungs if theBoard decided to look at them.

Peter J.Cochran said...

Easton Hospital,tax free for years, new owner and now pay's taxes. Same buildings and parking deck ,many of the same people and one of the best cardiac units anyplace , they now pay taxes.----The number 8 Billion comes up Bernie, this is 1/10th of Berkshire Hathaway,they have only 47 people in their office and one owner in Calf.who is 90 years old . Fruit of the Loom underwear included. Why do we need so many?

Anonymous said...

LVHN is a non-profit and their offices and facilities are like palaces.

Anonymous said...

You have no idea how lucky you are in Northampton County. PLEASE! 1995 since your last reassessment? Here in Bucks, the last reassessment was in 1972. Yes, 42 years ago. Home styles didn't even exist in 1972 are fairly compared after 40 years? 1995, hahaha. Come to Bucks - We're Pre-DISCO!