The Baltimore City Council takes up two bills next week related to the proposed expansion of the private Calvert School in North Baltimore -- both of which skirt a key issue raised by the plan.
Calvert School -- in the Tuscany-Canterbury neighborhood just north of the Johns Hopkins University's Homewood campus -- wants to raze a 91-unit apartment complex at 4300 N. Charles St. to expand its school and build more athletic fields.
Responding to residents' concerns about having to find a new place to live, the City Council will hold a hearing Monday on companion bills that could derail Calvert's plan. Similar legislation has also been introduced in the state legislature.
The broader question -- raised by some opponents of Calvert's expansion but not addressed directly by either bill -- is this: In a cash-strapped city, where officials said this week that an increase in property values fell short of expectations, what, if anything, should be done about the phenomenon of nonprofits like Calvert buying properties for development and removing them from the tax rolls?
It is a concern that goes beyond Calvert School -- and Baltimore.
The National League of Cities, for example, says that limits on property tax revenues due to increases in nonprofit, tax-exempt property are one of the "key issues for the future of municipal finance."
According to an NLC report last year on municipal fiscal conditions, the fair market value of tax-exempt property in 173 cities that responded was $177 billion. For the average city, the estimated revenue loss was about 13 percent of its annual budget.
The NLC hasn't taken a position on whether tax-exempt properties should be subjected to a tax or a payment in lieu of tax, or PILOT, says William R. Barnes, director of the advocacy group's center for research and program development.
"Our goal is to promote discussion," he says. "The issue needs to be looked at with a larger perspective."
In Baltimore, the 6.4-acre parcel the Calvert School is eyeing for expansion is valued at $4.7 million, according to state tax records, and pays about $110,000 a year in property taxes.
"It's a lot of money to lose year after year," says John C. Murphy, a lawyer for a group of residents trying to block Calvert's expansion.
It's also just a small percentage of the amount of taxable property bought in Baltimore each year by nonprofits -- not just elementary and secondary schools but universities, museums, churches and synagogues.
In the most recent tax year, religious, educational and charitable organizations bought taxable properties worth $35.6 million, according to Robert E. Young, associate director of the Maryland Department of Assessments and Taxation.
The revenue loss to the city from these taxable properties, according to Young: $828,930.
For the current fiscal year, the amount of the city's assessable base owned by educational, religious or charitable groups was $1.1 billion, according to state tax figures. That's far more than any other jurisdiction in the state.
If that property were taxed, Baltimore would receive $63.8 million in taxes. .
The city also has $2.2 billion in tax-exempt assessable property owned by federal, state and city government. In all, the amount of tax-exempt property in the city amounts to about a third of the city's tax base.
Alfred W. Barry III, a planning consultant who represents Calvert School, says the issue of lost property tax revenue from nonprofits is "legitimate." But he says it's unfair to bring it up solely in the context of a "Stop Calvert" movement.
"If people are concerned about the issue, let's lay it out with a full discussion of who it would affect and when," he says. "Don't make Calvert a scapegoat."
Not surprisingly, nonprofits don't feel any discussion is needed. In fact, Peter V. Berns, executive director of the Maryland Association of Nonprofits, finds it curious that the issue of taxing nonprofits is being raised when for-profit ventures are being granted PILOTs to reduce their taxes in the name of economic development.
Berns says nonprofits account for 20 percent of the jobs in the city and provide many necessary services to city residents, thereby reducing the burden on government.
Council President Sheila Dixon, a co-sponsor of both Calvert bills, says the legislation is needed to protect neighborhoods and residents. The bills would amend the city's building and zoning codes to require specific approval by the housing department and the mayor and council of any plan to demolish 50 or more residential units for use by an elementary or secondary school.
Apart from the bills, Dixon says the time has come to "open some dialogue" with nonprofits about the larger issue of tax-exempt property.
"I understand the services they render," she says. "There is still some support they need to give back to us."
