Mayor Pasquale Menna says the loss of taxable property to nonprofits is an unfair burden on taxpayers in regional centers like Red Bank. (Click to enlarge)
By JOHN T. WARD
It’s become a familiar refrain of Red Bank officials: the borough is choking on nonprofits that provide services to a wide swath of Monmouth County’s citizenry but return nothing to the town’s coffers.
For all the societal good they do, a sprawling medical center, various churches and other do-good institutions occupy land that might otherwise generate tax revenue and they increase the load carried by borough taxpayers each time they expand, says Mayor Pasquale Menna.
“Our residents have to pay for the deficiency,” he said. “That societal good is borne by those who are the least able to pay for it.”
Menna says that this year, he’ll be dialing up efforts to address what he considers a fundamental unfairness. But having gotten nowhere with earlier efforts, he’s retooled, and is now pitching a provocative idea: Make nonprofits pay when they acquire property now on the tax rolls.
The suggestion, Menna cautions, is just that. Though other media coverage of the proposal has focused on the controversial notion of upending a longstanding exemption from taxes for charities, Menna tells redbankgreen that the idea is merely a conversation-starter, and that he’s open to other mechanisms by which towns like Red Bank are compensated.
The problem, he says, came to the fore with the end of state aid to all but the most distressed cities in New Jersey, and it could be addressed by having Trenton, or the county seats, recognize and steer money back to towns that serve as regional centers, such as Red Bank, Morristown and Princeton.
“Basically, it’s an invitation to the legislature to start thinking outside the box,” he said. “There has to be a program that recognizes there are some municipalities that are not distressed cities” but provide essential services to a broad region.
Menna says that nearly 25 percent of Red Bank’s land is tied up by non-profits, four or five times the average of nearby towns. And every time they expand, they put increase the burden on their own neighbors.
“You can’t continue to have one-quarter of your tax base be tax-exempt and have your residents carry that burden,” he said during his annual state of the borough speech at the government reorganization meeting Sunday.
His foot-in-the-door proposl is not a call for taxes on existing holdings, Menna said. Nor is he gunning for government entities like New Jersey Transit, which has a large swath of real estate in town, to contribute.
Rather, he said, property taxes would apply to properties acquired by nonprofits in towns where 15 percent or more of the land in a town is exempt.
Menna said he is shopping around for legislative support for a yet-to-be-written bill. So far, he’s getting at least a slightly warmer reception than a proposal pitched by Councilman Michael DuPont in 2010 calling for taxation of nonprofits.
That request, to the town’s three Republican reps in Trenton, was met with a “get-your-own-finances-in-order-first”-type reply. Now, however, the Asbury Park Press reports that state Senator Jen Beck is “researching” the idea, which she says may require a constitutional amendment, and Menna says Assemblyman Declan O’Scanlon is interested in the idea.
If such a law existed, it would not impact St. James RC Church plan to buy the former borough hall at 51 Monmouth Street from the Community YMCA, That structure, which is exempt by virtue of the Y’s nonprofit status, is valued at $1.9 million, though the assessment appears to include the Relief Fire Company home, which is part of the structure.
