Friday, May 14, 2010

Retirement Community Residents Speak

      Prior to 2007, Pennsylvania retirement communities were exempt from real estate taxes on property utilized for assisted living residents. Property utilized for independent living residents, administrative offices, etc., was taxable. In 2007 the Pennsylvania Supreme Court decided that if an organization met the requirements for classification as a charitable institution, all its property was exempt. The exemption is not automatic; the institution must apply for it. Several retirement communities have done so, causing considerable controversy. The following letter was sent to local newspapers.

      Editor, Lancaster Newspapers,
      Editor, Lititz Record Express,

      There has been considerable controversy recently concerning the elimination of property taxes paid by retirement communities. As long as the exemption is available, we think it is incumbent upon them to decide whether or not to apply for it. Although financial considerations are important, we believe there is an additional ethical obligation which they must consider.
      One of the requirements for the success of a republic such as the United States is that of an intelligent, well-informed electorate. Because of the current economic crisis, schools are considering eliminating teaching positions. We do not feel that it is a good idea to further disrupt their budget problems by suddenly eliminating a significant portion of their funding. Furthermore, county and local governments are also facing budget problems; a unilateral decision to suddenly pay only an arbitrary percentage of property taxes further exacerbates the budgetary process for these entities.
      We also feel that, regardless of ownership, taxing a particular piece of property in accordance with its value, without regard to ownership, is fair. Suppose, for example, a commercial organization owns an office building valued at $500,000. If the organization sells the building to a retirement community, the building suddenly becomes tax exempt. That’s not fair to other taxpayers.
      Letters and opinions printed recently in local newspapers put forth several reasons why independent living areas of retirement communities should be tax-exempt. To us these reasons appear specious; reasons given and our responses to them boil down to the following:
• They employ thousands of people and purchase many local goods and services. So do taxable entities.
• They don’t send any kids to school. OK, let’s exempt any property owner who has no kids in school! So much for a future intelligent electorate!
• They maintain their own roads, shovel their own snow, etc. Their (P)ayments (I)n (L)ieu (O)f (T)axes (PILOT) cover police protection. But suppose police, ambulances and fire trucks couldn’t arrive at their community in a timely manner because the roads needed repair, or the snow hadn’t been plowed, to whom would they complain?
• Their residents contribute individually to the ambulance association and the fire department. So do non-residents.
• Many of their residents are employed and are paying local wage taxes. So are non-residents.
      Before one thinks we are disgruntled taxpayers, consider this: we are residents of Luther Acres in Lititz. When our CEO announced recently that a decision had been made not to apply for the tax exemption, he received a solid round of applause from our residents. As a good member of the larger community, he had made the difficult ethical decision, not the easy financial one. We are very proud of him.

      Glenn and Barbara Grunenberger
      But because of the infinity of objects man found in his world, naming was a little more complicated than Genesis implies; it was impossible to label each individual. Man might be able to give one name to the duck he saw this morning, and a different name to the one he saw this afternoon, but that became impractical the first time he had to speak about a flock of ducks. However, once he developed the power of classification ― what Genesis calls eating the fruit of the tree of good and evil ― the problem was solved.
      The Wisdom Of Genesis – The Spirit Runs Through It.

The book and/or a free look inside is available in paperback or on Kindle at Amazon

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