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Civic Skinny

No taxes are levied on $2.5 billion of Polk property.

10/7/2015

The National Pork Producers is headquartered in a handsome building in Clive. It is assessed at $3,291,000. The Fraternal Order of Eagles has a 6,000-square-foot lodge on Bloomfield Road assessed at $308,000. The PEO has its national headquarters in two nice buildings at 37th Street and Grand Avenue in Des Moines; they are assessed at $1,497,000. The Johnston Lions are in a brick building on Merle Hay Road assessed at $553,000. The priests at St. Theresa’s Catholic Church have a bungalow on University; it’s assessed at $125,700. The Elks have a nondescript lodge in Pleasant Hill assessed at $319,000.

The thing all these places have in common: they are exempt from property tax. The Pork Producers are exempt as a “charitable agricultural society.” (The charitable society exists “to enhance opportunities for the success of the U.S. pork industry by affecting laws and regulations,” among other things. The charity’s top-paid executive made $385,000 in 2013.) The Eagles and Elks and Lions and the PEO are charitable fraternal organizations; the church-owned home is a “religious residential.”

All told, hundreds of privately owned buildings and houses and plots of land in Polk County are exempt from property taxes because they are charitable or religious or fraternal or educational or literary organizations. Or because they plant fruit trees. The assessments on those places total $2,519,238,010 — that’s more than $2.5 billion.

And that doesn’t include the value of publicly owned buildings and land that pay no taxes — the courthouses, the airport, the Federal buildings, city hall, the waterworks, the parks, the public schools, the cemeteries, the community-college campuses and the like. Those places are not even assessed.

A sign of the times.

A sign of the times.

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It’s all but impossible to calculate what the property taxes would be on that $2.5 billion of assessed but untaxed property. Some is commercial, some residential. Some is affected by tax-increment-financing districts, some isn’t. All are affected by school districts. But it’s clear the exemptions are costing the county and the cities tens of millions of dollars in foregone revenue, people who understand the issue say.

Examples: Taxes on a commercial building assessed at $3,291,000 — the assessment on the tax-exempt Pork Producers building — would range from $56,820 in Saylor Township to around $91,000 in Southeast Polk or on Ingersoll Avenue. In Clive the tax would be around $65,000. A house assessed at $125,700 — like the church-owned home on University — would pay taxes of about $2,200 in Saylor Township and nearly $3,500 on Ingersoll or in Southeast Polk.

The $2.5 billion in exempt assessed property is 7.7 percent of the $32.2 billion of assessed property in the county. That $32.2 billion covers about 170,000 parcels of property, with about 90 percent of those being residential properties.

While the exemptions are great for those not paying taxes, they have two other financial impacts: Cities and towns either have less money to spend for police and parks and streets and fire protection or else other taxpayers make up for the lost revenue by having their own taxes increased.

“If you narrow the tax base by exempting some property, everyone else pays more,” a columnist for Forbes magazine noted earlier this year after Maine’s governor proposed ending property-tax exemptions for charities with assets of more than $500,000. “Tax Analysis,” a publication, last year estimated the exemptions cost municipalities $17 billion to $32 billion a year.

In Polk County, the lion’s share of the exempt property — $1.9 billion — is in Des Moines. This figure includes $360 million in hospital property and $360 million in educational properties, primarily Drake University, Des Moines University and Grand View University. Churches account for another $290 million in exempt properties in Des Moines. The two biggest: Plymouth Church on Ingersoll, at nearly $13 million, and First Federated Church on Franklin, at $10.6 million.

Fruit trees? Iowa law gives a partial exemption to anyone who plants at least 40 apple trees or 70 other fruit trees on an acre. Gerald Naber, owner of a home on 1.5 acres in Altoona, had his assessment reduced by $20,900 under the exemption. …

James Coppoc, an entertainer and a senior lecturer in the American Indian Studies program at Iowa State, last week sued the university and emeritus professor Sidner Larson on 21 counts, for harassment, retaliation and discrimination, among other things. Those other things include the allegation that Larson “harassed and interfered with Plaintiff and his wife over their private and intimate marital and sex lives and pervasively intruded and meddled in their marriage and intimate personal lives.” …

Iowa’s nonfarm employment totaled 1,565,700 for the month of August, the nonpartisan Legislative Services Agency reported last week. That’s down about 4,000 from the July figure, meaning Gov. Branstad is losing ground on his 2010 election pledge to create 200,000 jobs in five years. He has created about 65,000.

He has 135,000 — and three months — to go. CV

A sampling of tax-exempt properties
Mercy West Hospital…………$95 million
Des Moines University…………$62 million
Des Moines Christian School…………$10.1 million
Ankeny Prairie Ridge Church…………$7 million
Lifeserve Blood Center…………$4.7 million
St. Augustin School…………$4.6 million
Resthaven Cemetery…………$1.4 million
Planned Parenthood…………$1.1 million
The Rugby Foundation…………$388,000
Urbandale American Legion…………$308,000
Furry Friends Refuge…………$262,000
Soccer West Soccer Club, Des Moines…………$250,000
Grandview Little League…………$212,000
Croatian Fraternal Slavic Center…………$91,000

Comment: $849,854.15

Chris Godfrey is working happily in a big job in Washington.
Four of the state officials he sued alleging discrimination and defamation and retaliation and extortion while he was head of the Iowa Workers Compensation Board — Jeff Boeyink, Teresa Wahlert, Tim Albrecht and Brenna Findley — are long gone from the Branstad administration. Terry Branstad himself and Lt. Gov. Kim Reynolds are the only defendants still working for the state.

But the suit goes on.

And the bills pile up.

This week, the Executive Council will approve another $81,577.79 in fees for the LaMarca Law Group, the firm representing the six defendants in the three-and-a-half-year-old case. That will raise the total paid the firm to $849,854.15.

So far.

Those are taxpayer dollars.

The case has not yet come to trial. It’s on hold while the Iowa Supreme Court decides a legal point. That should come this summer. Then there will be a trial in Polk County District Court. And then, no matter who wins, there probably will be an appeal. The bills will keep piling up. And if Godfrey wins, the state in all likelihood will end up paying the bills of his lawyer, Roxanne Conlin.

This thing will cost taxpayers between $1 million and $3 million — maybe more — by the time it is over.

The Governor, who won’t spend an extra dime to help schoolchildren or the aged or infirm or mentally ill, seems unconcerned by the costs of this lawsuit. And his legislative colleagues-in-cost-cutting haven’t uttered a public peep. The whole thing is unconscionable.

This suit basically is about a $150,000 dispute. Godfrey, a Democrat appointed by Tom Vilsack and reappointed by Chet Culver, had a fixed term heading the compensation board that was to expire on April 15 of this year. When Branstad was elected governor in 2010, his aides tried to get Godfrey to resign. Godfrey refused. So Branstad then cut his salary as much as he could under the law —by about $40,000 a year. That comes to about $150,000 for the 46 months Godfrey had left on his term.

The Governor and his people were ham-handed or petulant or homophobic — Godfrey was the only openly gay executive in the Branstad administration — or just politically stupid. They never should have cut his salary, and when he hired Conlin — a tenacious and successful lawyer who once ran for governor against Branstad — they should have known they were in for a fight.

They should have settled the day the suit was filed.

They should take a deep breath and settle now. CV

— Michael Gartner

 

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