NRI chief: Woonsocket nonprofits should pay their share

NRI chief: Woonsocket nonprofits should pay their share

WOONSOCKET - A decision to send tax bills to many of the city's nonprofit organizations in 2014 has been pretty unpopular with most groups, with members pointing out they've dedicated time and resources over the years to help city residents.

But at least one organization is happy about the change, saying it restores balance to a previously unfair system.

"Our understanding is not-for-profits are exempt from sales tax and income tax, but not from property taxes," said Chris Stevens, CEO of Northern Rhode Island Community Services. "It seems that it's really inequitable that some places get tax bills and some don't."

Thirteen civic groups were notified on Nov. 25 they'll be billed for a combined $382,040 in July of 2014, including Seven Hills Rhode Island, Le Club Par X, Family Resources Community Action and the Italian Workingmen's Club. The news, which came out in The Breeze's Dec. 4 story "Woonsocket nonprofits notified of impending tax bill," prompted a very different reaction from the NRI head than most.

"Finally," he said.

Stevens said he's contacted individuals from the past two administrations to notify them of the problem, to no avail.

NRI Community Services provides mental health and substance abuse services, and owns nearly a dozen properties including office space and lots with housing for clients. While some of the properties are on the hook for only a partial tax under state law providing exemptions for low income housing, Stevens said their organization's bill still adds up to hundreds of thousands of dollars every year.

But it's a contribution he's glad to make considering the state of Woonsocket's finances.

"The city needs all the taxes it can collect on properties," he said. "A human service or health service agency should really realize that they're trying to help people get out of poverty in a very poor community and if they're going to make the community poorer by taking properties off the tax rolls, then whatever positives they've gained from getting a few people employed, they took away by not paying property taxes."

"Rhode Island already has legislation that reduces taxes if you're doing low income housing, but it doesn't eliminate it completely," said Stevens.

Other organizations in the city have already proven they are exempt from property tax for other reasons under Rhode Island 44-3-3, while some, like The Stadium Theatre Foundation, lobbied to get their name officially added to the list when they first heard the city might pursue the budget balancing action.

Among the 13 currently scheduled to be sent bills this year, several are still providing documentation as to why they believe they should be exempt.

"We're very empathetic to the people in the community and we want to make our contribution," said YWCA Executive Director Deborah Perry. "But in terms of our ability to pay the tax bill, it will certainly hinder our ability to provide services."

Among YWCA's charitable work is a free education program to pregnant and parenting teens.

Stevens, meanwhile, takes issue with the fraternal organizations he says amount to more of a social club.

"We pointed out to the city that these are men's drinking establishments," he said. "They really don't do that much in terms of community. In the scale of things, they mostly have a bar and a club and a meeting hall that they rent out."

Mike Kind, chairman of the Italian Workingmen's Club, however, said his group does do a lot of charitable work.

"We are a drinking establishment, but to say that's why we exist is unfair," Kind said.

Kind said he's waiting to see how the new administration, led by Mayor Lisa Baldelli-Hunt, handles the matter.

Stevens also pointed out that some of the organizations considered tax free were given the exemption as a small, local nonprofit, but have since been acquired by a much larger entities that receive millions in federal funding, such as Tri-Hab, which is now part of Lifespan, and The ARC, which is now part of Seven Hills.

"The original legislation was for a small million dollar a year not-for-profit, not a $170 million a year," he said. "It might have made sense 20 or 30 years ago, but the average nonprofit nowadays has multiple ways of getting paid and it certainly has the ability to incorporate property tax into their charges to whoever is paying them."

Every main road in the city, he observed, has one or two nonprofits.

"I think the taxing authority in the city of Woonsocket is being very brave to step up and say 'I know we'll incur the wrath of all these fraternal organizations and nonprofits, but they should be part of the tax base.'"

Comments

That's all this is. It's a by-product of a dying system that still doles out 20 year pensions and takes orders from unions about how much staffing is needed and continues to pay people at the WED full time pay for part time work.