Supervisors Weigh Freeze On Charity Tax Breaks

$190 Million Budget Gap Prompts Proposal

Prince William County will consider a moratorium on tax breaks for certain charities as part of its effort to deal with an anticipated $190 million shortfall in the upcoming fiscal year.

The Board of County Supervisors voted Tuesday to hold a public hearing on whether to freeze consideration of requests for tax exemptions that are not mandated by the state.

Such tax breaks have a "negative revenue impact to Prince William County and its taxpayers" and are not fiscally sound in the current financial environment, Finance Director Christopher E. Martino told the board. He recommended instituting a moratorium "until the financial environment for the county improves to a level that can accommodate such tax exemptions."

Religious, charitable and benevolent organizations, known as 501(c)3s, are tax exempt under state and county code. Other groups and associations must be granted an exemption from the board.

Supervisors have two applications for tax exemption before them, from the Marine Toys for Tots Foundation and the Incentive for Normal Social Interaction-Group Homes Today, or Insight, a residential facility for adults with developmental disabilities.

Insight is seeking an exemption on a home with an assessment of $435,900. If it is given tax-exempt status, the county would lose $4,500 in revenue. Insight has exemption on nine properties in the county.

About 50 properties in Prince William receive about $679,000 in tax breaks. Although those exemptions would probably fall into categories that are not automatically exempt, those properties would continue to receive previously granted tax breaks.

The moratorium would indefinitely suspend consideration of tax exemption requests.

"This is one of many things that help us live within our means," Martino said. "It doesn't seem appropriate to consider these, given the budget situation we are in. If and when things change in the future, we can always readdress this."

The Finance Department suggested allowing groups to apply for an annual tax reimbursement, which would put them under the scrutiny of the budget process and the public. It also would force the board to determine whether services provided by an organization requesting an exemption are worth the lost revenue to the county.

"This would not undo current exemptions," Chairman Corey A. Stewart (R-At Large) said Tuesday to try to ease concerns of charitable organizations. "I don't think it is going to have much of an impact."

The public hearing is scheduled for next month.