TOP STORY: CHURCH AND STATE: In Colorado, `Murphy’s law’ would end church tax exemptions

c. 1996 Religion News Service COLORADO SPRINGS, Colo. _ Colorado voters are no strangers to touchy church-state battles. And in November they’ll vote on the nation’s first state referendum on the complex and emotional issue of whether states should tax the property of churches, charities and nonprofit organizations. Amendment 11 would change the state constitution […]

c. 1996 Religion News Service

COLORADO SPRINGS, Colo. _ Colorado voters are no strangers to touchy church-state battles. And in November they’ll vote on the nation’s first state referendum on the complex and emotional issue of whether states should tax the property of churches, charities and nonprofit organizations.

Amendment 11 would change the state constitution by eliminating state property tax exemptions for some 7,500 properties, including churches, temples, mosques, YMCA camps, New Age retreat centers, Catholic hospitals, city zoos, Moose lodges and urban soup kitchens.


The amendment, which is the brainchild of John Patrick Michael Murphy, a Colorado Springs attorney, radio talk show host and crusading ex-Catholic,would maintain exemptions for organizations meeting Murphy’s strict “social duty” criterion, such as nonprofit schools and groups that provide housing for orphans, the homeless, the elderly, disabled or the abused. Murphy has spent more than $50,000 of his own money on the initiative campaign.

“The motive is fairness,” says Murphy, who contends the measure would put an additional $70 million into state coffers. “We simply want churches and charities to pay their fair share.”

The amendment has drawn criticism from many of Colorado’s civic and religious leaders. Denver Mayor Wellington Webb said it would do “irreparable damage” to the state’s nonprofit institutions. Colorado Springs Roman Catholic Bishop Richard Hanifen says the amendment challenges decades of legal precedents and long-held assumptions about the positive influence churches and charities have on American society.

“The reason for the property tax exemption for our institutions in the first place was that we serve the community in many ways that reduce the government’s need to provide services,” says Hanifen. “Now that contribution from all of us is being called into question.”

The measure has made strange bedfellows, briefly united previously antagonistic groups like Planned Parenthood and its anti-abortion nemesis. Focus on the Family. They have joined forces with dozens of other organizations and hundreds of individuals to battle the amendment.

“One of the most exciting things about this campaign has been our steering committee meetings, where people who have never sat down at a table together and rarely agree on their philosophies about life work together because they realize how detrimental this is to Colorado,” says Janelle Jones, a spokeswoman for CitizenAction for Colorado Nonprofits.

A September poll published by Denver’s Rocky Mountain News said 49 percent of respondents would oppose the measure and 39 percent would support it.


“We’re very much running scared at this point,” says Jones, who says CitizenAction has a war chest of about $500,000. It plans to spend around $170,000 of that on television ads, and is spending the rest on public relations and other efforts, such as a program to distribute some 20,000 yard signs bearing the slogan, “Don’t Hurt the Helpers.”

Murphy’s group has collected less than $110,000, more than half of which was spent to collect the nearly 90,000 signatures required to get the measure on the ballot. But Murphy says his side will win despite the David-and-Goliath media war.

“We’re going to upset them,” he declared.

Some of Colorado’s evangelical Christians see Amendment 11 as part of the continuing fallout from 1992’s Amendment 2, a divisive gay rights limitation measure that was supported by many evangelicals and approved by the state’s voters. Amendment 2 was ruled unconstitutional in May by the U.S. Supreme Court.

“Before Amendment 2, the community was oblivious to our existence, but after Amendment 2 they were afraid of us,” says Steve Todd, president of the Colorado Springs Association of Evangelicals.

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Still, many in Colorado Springs acknowledge that nonprofits are a significant chunk of the local economy. The city of nearly 300,000 is home to some 70 religious nonprofit organizations, as well as Junior Achievement, the U.S. Olympic Committee and others. According to a just-released study, Colorado Springs-based nonprofits have an annual payroll of $101 million, spend $120 million a year on local purchases and spend $24 million a year on local construction projects.

“We want the community to recognize how important they are,” says Robert Scott, president of the Colorado Springs Economic Development Corp.


Focus on the Family, the city’s largest religious nonprofit, looms large in the Amendment 11 debate. The conservative media ministry, which has an annual income of more than $100 million and owns a 47-acre campus valued at $30 million,MDUL was a supporter of the gay rights limitation initiative. It also is one of Colorado Springs’ major employers, with 1,200 people on its payroll.

In his Friday (Oct. 18) national radio broadcast, Focus founder and president James Dobson said Amendment 11, which would require Focus to pay $550,000 annually in taxes was “downright stupid” and “an idea out of absolute left field.” Dobson said nonprofits more than make up for the tax breaks they receive: “They pay for it in benevolence to mankind,” he said.

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Within Colorado, a battle rages over the measure’s potential impact. Murphy argues it will help homeowners because the additional tax revenues would lower existing rates. But opponents say the estimated $70 million the measure would raise from nonprofits is only 2.5 percent of the state’s annual tax income, and would have little or no impact on property taxes for homeowners.

The so-called “Murphy’s Law” has failed to draw the support of groups that advocate church-state separation, in part because of the measure’s confusing wording, which some see as a potential playground for lawyers. For example, properties used to house homeless people would be tax-exempt, but property used to feed, clothe or counsel the homeless would be taxed.

For this reason, Americans United for Separation of Church and State, a constitutional watchdog organization based in Washington, D.C., opposes the measure. In Americans United’s view, Amendment 11 could further muddy relations between churches and government entities by requiring officials to monitor faith-based groups in an effort to qualify some and disqualify others for tax exemptions.

“The state has no right to tell us what is good religion and what is bad religion,” says Americans United’s Joseph Conn.


One group that supports Amendment 11 is the Annandale, Va.-based Business Coalition for Fair Competition. The coalition says America’s million-plus nonprofits have a combined income of more than $500 billion, including $375 billion income from the sales of products and services, and don’t need government tax breaks, which only give them unfair advantages over for-profit firms.

“Colorado Citizens are in the unique position of saying it’s time to recognize that nonprofits have changed,” says Kenton Pattie, coalition executive director. “They are more like businesses than ever before, and thus should be treated more like businesses.”

JL END RNS

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