The Freeloaders of Hamilton County, Tennessee March 24, 2013

The Freeloaders of Hamilton County, Tennessee

Chattanooga, Tennessee sits in Hamilton County and, like so many cities, it could always use more tax revenue.

Residents obviously pay taxes. So do most businesses.

But not churches. They’re exempt and — bad news for the city — there are a hell of a lot of them in the area, meaning the city is missing out on millions of dollars each year in theoretical income:

According to Hamilton County tax assessor records, 4,020 of the 146,504 properties in Hamilton County are not assessed by anyone and generate no tax revenue. That represents 2.74 percent of all the parcels in the county.

But of those 4,020 untaxed parcels, 2,810 of them are in Chattanooga — which means the city misses out on its tax rate of $2.309 per $100 of assessed value for those properties.

Because the properties are not assessed, there is no way to say exactly how much revenue could be generated if they were returned to the tax rolls.

But even if each was assessed at $24,375, the median assessed value of all properties in the city, that would bring the city $1.5 million a year.

Churches represent over 1,000 of those untaxed pieces of property, land that could (again, theoretically) go to other businesses and generate income for the city.

In other words, while church leaders no doubt believe they are offering an important service to everybody, they are paradoxically hurting the city and its citizens (albeit indirectly).

Obviously, churches don’t deserve all the blame here. They’re playing by the rules. They’re doing everything legally. The problem is that the rules allow churches to proliferate at a cost to the city.

Several years ago, Stafford, Texas was in the news because it had too many churches.

[Leonard] Scarcella is mayor of this Houston-area community, which has 51 churches and other religious institutions packed into its 7 square miles.

With some 300 undeveloped, potentially revenue-producing acres left in Stafford, officials are scrambling to find a legal way to keep more tax-exempt churches from building here.

“With federal laws, you can’t just say, ‘We’re not going to have any more churches,'” Scarcella said. “We respect the Constitution, but 51 of anything is too much.”

… Nilda Martinez, who owns a flower shop between two churches, has had enough. “The churches, they’re everywhere here,” she said. “There are too many; the city should control it. It hurts the city when you don’t have enough businesses paying taxes.”

And that’s the problem. It’s tough for mayors to tell pastors they need to put the city’s best interests in front of their faith, but that’s ultimately what has to happen. Let Stafford be a warning to other cities. Don’t let this happen. It’s tempting to ask pastors to be considerate of this problem when planting their churches… but they’re way too selfish on the whole to let the city’s revenue interests get in their way.

If we were smart, we would pass laws to tax churches. They’re a multi-billion-dollar business that would actually help everyone if they gave some of that money back to their communities.

(Thanks to Alex for the link)

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