One basic tenet of the separation between church and state predates our Constitution (and our Republic): the tax exempt status we afford religious institutions.
The first time the exemptions were granted, de jure, to charitable organizations wasn’t until 1894. But the practice, in United States history, dates back to the first settlements. Sickness, fires, crime, and the desire to learn all predate our tax structure. Long before government, communities erected hospitals, schools, fire departments, and myriad other associations designed to improve society. As we have always been a highly religious people, a healthy portion of these charitable associations were religious in nature. We made a decision that we shouldn’t burden those institutions with property taxes.
Many religious institutions began to accrue wealth alongside the critical services they provided to the public. Two hundred years (and the Gilded Age) later, the billionaire steel magnate and philanthropist Andrew Carnegie, posited that with great wealth came personal responsibility.
Carnegie wrote a short essay, entitled “The Gospel of Wealth,” which asked: “What is the proper mode of administering wealth after the laws upon which civilization is founded have thrown it into the hands of the few?”
He found that wealth should inspire a sense of duty, including on the part of religious institutions, to reinvest in the community:
First, to set an example of modest, unostentatious living, shunning display or extravagance; to provide moderately for the legitimate wants of those dependent upon him; and after doing so to consider all surplus revenues which come to him simply as trust funds, which he is called upon to administer, and strictly bound as a matter of duty to administer in the manner which, in his judgment, is best calculated to produce the most beneficial results for the community–the man of wealth thus becoming the mere agent and trustee for his poorer brethren, bringing to their service his superior wisdom, experience and ability to administer, doing for them better than they would or could do for themselves.
Carnegie’s vision, which connected the wealthy and the poor, has grown difficult to see in 2013, as mainline Protestantism fades against a backdrop of prosperity theology, doctrinal revisionism, and scriptural cherry-picking.
Luckily, some religious organizations still seem to heed the message.
Sam Cason is the President of the Board of Directors of the Anchorage Unitarian Universalist Fellowship. On September 24th, he appeared before the Assembly; a yearly tradition possibly predating statehood. He brought a check and a brief letter, both addressed to the city of Anchorage.
As [Former Supreme Court Justice] Oliver Wendell Holmes said, “taxes are the price we pay for a civilized society.” The [Internal Revenue Service] has this quote inscribed above the entrance to their headquarters at 1111 Constitution Avenue. We, the members of the Anchorage Unitarian Universalist Fellowship, value the civilized society that we share. We are pleased to present our voluntary “payment in lieu of taxes” (PILOT) as we have done for most of the 50 years we have been a church in the city of Anchorage. We present this PILOT in support of the cost of city maintenance, road plowing, police protection, and education in our community. We recognize how we – as a congregation, as property owners, and how we as individuals – benefit from living in an enriched community with municipal services, and we value not only the schools, fire, and police protection; the infrastructure like roads and drainage, but also the parks where we hold fellowship picnics and take our children into nature and sport and play. And the oversight that keeps buildings safe.
The Supreme Court upheld the tax exemption for religious institutions most recently in Walz v. Tax Commission of the City of New York (1970). Chief Justice Warren Burger defended the practice in the majority’s decision: “The State has an affirmative policy that considers these groups as beneficial and stabilizing influences in community life and finds this classification useful, desirable, and in the public interest.”
Burger did not see the exemption as an endorsement of any particular religious institution. But if the state officially recognizes morality in the deeds of a church, temple, or synagogue, couldn’t that be understood as exactly that?
And, when “charitable activity” strays all the way from Carnegie’s principles of community investment to proposals to build 230-foot crosses and turning away the Boy Scouts, what exactly are we promoting as useful or desirable?
Justice William Douglas, in the dissent, put it sharply, offering that “one of the best ways to ‘establish’ one or more religions is to subsidize them, which a tax exemption does.”
In Anchorage, Cason thinks that the yearly payment to the municipality just makes sense.
The notion that the Church should act as a responsible citizen has fairly deep roots in the New England Unitarian tradition of folks like John Adams and Ralph Waldo Emerson. Some people find it ironic that a place that prides itself in being a “beacon of liberal religion” espouses and acts on such conservative notions as individual responsibility and local community involvement, but we prefer to think of these as shared ideals rather than being the exclusive province of any certain group. One of our elderly members is fond of asking those who claim the “conservative” label, “what is it you are conserving?”
Assemblyman Dick Traini thanked Cason for the payment, and joked that more ministries should look into the concept. Under the repeated rulings of the Supreme Court, the state can’t force the church to pay taxes. But church congregants can. Maybe they should.