Norwich nonprofits will make their case locally, statewide for tax-exempt status
Norwich – Nonprofit organizations and advocates vowed Monday to make the growing trend of local assessors denying tax-exempt status to nonprofits a campaign issue in the upcoming 2018 statewide and legislative district elections.
About 50 representatives of nonprofits, two town assessors and elected officials gathered for an hour-long forum at Otis Library in response to Norwich Assessor Donna Ralston’s decisions to deny about three dozen local nonprofits property tax exempt status this spring. Ralston did not attend the forum.
Organizers said they will push for changes to state law to better define charitable entities, call for uniform treatment of tax-exempt entities and to hold workshops and educational forums to teach nonprofits about their requirements under the law.
Wendy Bury, executive director of the Southeastern Connecticut Cultural Coalition, said organizers of Monday’s forum spent the past three weeks contacting assessors throughout the region to learn how they approached their reviews of nonprofit entities. By state law, all nonprofits that had tax-exempt status had to file paperwork required every four years to update their status on Nov. 1, 2017.
In Norwich, 18 organizations missed the four-year deadline and were denied tax-exempt status automatically. Bury said assessors in most towns in the region issued warning notices in advance of the Nov. 1 deadline, called agencies that had not submitted as the deadline approached and allowed late filing with a late fee.
Ralston told Bury she sent notices to organizations, but some said they did not receive them.
Gian Carl Casa, president and CEO of The Alliance, which represents nonprofits statewide, said the issue goes beyond Norwich. He said The Alliance has heard from nonprofits in about 40 cities and towns with concerns about being denied tax-exempt status for properties that had been exempt for years.
But Ben Shaiken, manager of advocacy and public policy at The Alliance, said no other towns have given the blanket denials that Norwich gave this year.
Norwich city officials said they maintain a hands-off policy on assessment decisions. But lobbying at the state level already has led to a bill passing the General Assembly that would extend the filing deadline to Aug. 1, with a $30 late fee. The bill is awaiting Gov. Dannel P. Malloy's signature.
Nonprofit advocates said they would make it a campaign issue this fall to press for additional legislation to clarify definitions of charitable organizations and “make it a case in the 2018 election why nonprofit tax exemption is important,” Casa said.
Nonprofits get tax exemptions for services they provide to their host communities, Casa said. Those entities are good for the state’s economy, he said.
Representatives of several nonprofits brought their arguments to the City Council Monday following the forum.
Jennifer Granger, executive director of United Community and Family Services, gave the City Council an overview of its health care, dental, behavioral health and children’s health facilities, which would be taxed on a total combined assessment value of $4.3 million.
Norwich Arts Center, which would have to pay an estimated $16,000 on its three-story theater and art gallery building, presented a flier listing “NAC by the Numbers.” The all-volunteer organization has zero payroll and 180 members, and this year has held 50 theater performances, 12 gallery exhibits, 12 First Friday art exhibit openings, and has held 30 classes for Norwich public school students.
Founding member Peter Leibert said volunteers have worked thousands of hours over the past 31 years to support the arts in downtown Norwich and secured grants and donated labor to revitalize a historic building.
“To put things into perspective, NAC has made a huge financial contribution to the city in the form of developing the Norwich Arts Center, well over $500,000.”
NAC was denied in part because the center rents two small offices on the second floor to outside entities. During the forum, attorneys said that too is a growing trend for nonprofits as grant dollars have dwindled in recent years.
They recommended that agencies defend their positions by showing that the money they collect in rents goes directly to support their chief nonprofit mission.
Dave Burnett, executive director of Reliance Health, said he has worked in Norwich for 40 years at the agency that serves people with mental illness and homeless issues. He named several other agencies that came to Monday’s meeting and said all the nonprofits work to make Norwich better, whether it be human services, arts and open space preservation.
“I have worked in Norwich for 40 years and we have never been treated the way we are being treated,” Burnett said. “… If we were not here, this community would be a less attractive, less healthy and a less appealing place for entrepreneurs and developers.”
Bury said the materials presented at the nonprofit forum outlining legal precedents and town-by-town processes for handling tax exemptions are available at the website, http://culturesect.org/nonprofit-property-tax-exemption/.
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