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Joe Morris: Prodigal churches should pay taxes

CHARLESTON, W.Va. -- Kanawha County is saddling homeowners with double-digit tax hikes, housing first-graders in moldy portable classrooms and perhaps closing most of its libraries, yet it graciously subsidizes second homes for clergy and the construction of resort-like megachurches.

Rather than another round of school bonds or reassessments, why don't county officials demand churches share their enormous wealth and stop consolidating it in tax-free vanity real estate? Churches qualify as exempt from property taxes, owing to their status as nonprofits and charities, but some of them are clearly very profitable and exceedingly charitable to themselves.

The West Virginia Catholic diocese has spent well over $1 million on restoration of Bishop Michael Bransfield's private Wheeling residence, adding amenities including a sunken bar and 100-square-foot wine cellar. The diocese also owns and maintains, at Bransfield's request, a South Hills house as his private residence when he happens to be in the southern part of the state. And last year Bransfield acknowledged owning a vacation beach house in Brigantine, N.J., where a fellow priest was alleged to have raped a minor.

Measure Bransfield's three houses against the U.S. Code's definition of nonprofits and charities, as entities "organized and operated exclusively" for religious or charitable purposes, none of whose net earnings can "inure to the benefit of any private shareholder or individual." I submit that no beach house was ever built that was not intended to inure to the benefit of an individual.

By any measure, the Bible Center Church's $17 million Southridge complex surpasses the bishop's houses in sumptuousness -- sprawling 67,000 square feet (more than twice the size of the Civic Center Coliseum), enclosed behind "storefront window systems" and anchored by a two-story fireplace and scripture-engraved mantle. Who could argue with a straight face that this material excess serves an "exclusively religious" purpose, let alone a remotely charitable one?

Just because a congregation is entitled to own its church tax-free, it does not follow logically that it is entitled to own any church tax-free, no matter the extravagance. Every church needs a furnace, but by which commandment must it ascend two whole stories, while simultaneously narrating the Gospel of Matthew, and why must I finance such grandeur when rainwater leaks from the ceilings of my stepdaughter's grade school?

Churches do provide a range of social services, but spending some of their money on charity does not in itself make them charities, and no one really knows how much they give away. Private companies such as The Charleston Gazette and Wal-Mart also provide social services, and this time every year they report it to the IRS. Churches need not, and do not, disclose a dime.

Even other nonprofits, such as the United Way, have to disclose their income and spending, but not churches, and they never volunteer to report, despite the immense good faith it would demonstrate. Not a single church in West Virginia has joined the Evangelical Council for Financial Accountability, a 34-year-old independent auditing organization with nearly 2,000 participants, including Union Mission Ministries, a charter member.

Churches that conduct themselves like businesses (and not especially exemplary ones) -- pampering their chief executives, channeling wealth into high-end real estate, defensively disclosing nothing more than the law requires -- should be treated like businesses, not like nonprofits or charities. If not by the seemingly straightforward language of the Constitution, then by the more explicit mandates of the Internal Revenue Code, their taxes are due.

Morris, a former Gazette business editor, is a Charleston-based financial reporter.


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