Cash-strapped localities have started exploring the possibility of taxing non-profit entities. This makes a certain amount of sense. Non-profits that own substantial amounts of property could conceivably help cities and states withstand some of the ravages of today's economic crises. And if we're talking, say, about universities with multi-billion dollar endowments, one can understand the cities' impulse to ask these groups to contribute more to the common welfare.
We have some problems with the thought, though, of most non-profit organizations, which, remember, don't make a lot of money--some of them hardly make any profits at all!--having to pay taxes on their facilities. The whole point of offering non-profits tax exemptions is to help them to help us: Your local homeless shelter or after-school program provides services that a community needs. If an NPO didn't do it, the government would probably have to (or at least pay for the consequences of NOT having the service), which means higher tax bills for everyone. The tax break is a theoretically cost-effective way to assist these organizations.
What we really have a problem with, though, is the fact that while some non-profits may be asked to pay property taxes, others won't be. If states are going to start taxing universities and hospitals, shouldn't they also tax the other large property-owning non-profits like, oh, the Catholic Church and other large religious organizations?
Yes, we know, first amendment, blah blah blah. But if other NPOs must do their share, why shouldn't the church? We'll even make a deal: If the churches pay their fair share in taxes, then they can even participate in the political process. That way, for example, they could even encourage their parishioners to vote for certain candidates or, say, discourage their clergy from offering communion to Catholic candidates like John Kerry who support abortion rights, which they didn't do because they're non-profits and not allowed to participate in the political process. Oh, wait.
What's good for the non-profit goose is good for the non-secular gander.
Solipsistography
"Squeezed Cities Ask Nonprofits for More Money"
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