Battle of the Budget

Question: When is a charity not a charity? Answer: When the town government is strapped for cash.

Many local governments around the country have tight budgets. The problem is particularly acute in New Hampshire, which has neither a state income tax nor a sales tax. New Hampshire localities are especially hard pressed because the local property tax must fund both state and local needs. That's why Peterborough, N.H., recently rescinded the tax-exemption for the MacDowell Colony, a charity that owns 32 artist studios on 450 acres of land and has operated on a tax-exempt basis for nearly 100 years. The colony enjoys national fame as the place where Thornton Wilder wrote "Our Town," Aaron Copland composed "Appalachian Spring" and George Gershwin wrote the folk opera "Porgy and Bess."

Clearly, the only reason Peterborough is willing to publicly adopt such a tortured interpretation of the law is that it has to balance its budget. Peterborough sets a sad precedent for other cash-strapped local governments to follow. If they plan to do so, they will need better legal arguments. Meanwhile, maybe more charities could make a few payments in lieu of taxes. It would help to avoid the risk of making bad tax-exemption law in the states.



Bruce D. Collins

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