A previous version of this article first ran last year. Updated to reflect current events.
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 present day, as mainline Protestantism fades against a backdrop of prosperity theology, doctrinal revisionism, and scriptural cherry-picking.
But one congregation in Alaska has made heeding that message a central mission, as well as a tradition.
Sam Cason is the President of the Board of Directors of the Anchorage Unitarian Universalist Fellowship (AUUF). Last Tuesday, he appeared before the Assembly; a yearly tradition as old as the fellowship’s 50 years in Alaska. He brought a check and a brief letter, both addressed to the city of Anchorage.
Cason quoted President Dwight Eisenhower’s farewell speech, citing his observation that “we — you and I, and our government — must avoid the impulse to live only for today, plundering for our own ease and convenience the precious resources of tomorrow. We cannot mortgage the material assets of our grandchildren without risking the loss also of their political and spiritual heritage. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow.”
We, the Anchorage Unitarian Universalist Fellowship, value the future of our grandchildren too much not to help pay for the upkeep of our city today. Therefore, we are please to present our voluntary payment in lieu of taxes (PILOT) as we have done for most of the 50 years that we have been a church in the municipality of Anchorage.
We present this PILOT in support of the costs of city maintenance, snow plowing, police protection, and education in our community. Belief in participation in the democratic process is one of the seven principles we strive for, and we strengthen our commitment to it by recognizing the financial stake every person has in maintaining a civilized society. We the People enjoy the benefits and we will not refuse the burden of our local government. Like many families in Anchorage, our budget at AUUF is tight. We cannot fund all of the worthy programs we envision to make, not only our congregation, but our community a better and more wholesome place to live.
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, by allowing those institutions to use the same municipal services, paid for by the taxpayers, free of charge, 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.
In making this payment in lieu of taxes, we honor the founders of AUUF by continuing their commitment to share in the cost of caring for our beautiful city, just as we share in the benefit of living in this incomparable place. We do this also in affirmation of the separation of church and state that safeguards religious freedom for all our nation.
“Hopefully next year we’ll have other people of faith coming in and making their donations too, because everybody uses the same police, same fire, same water system, same sewer system,” Traini said, thanking Cason and the AUUF. “So, it needs to be everybody here contributing.”
There are well over 300 churches and places of worship in the municipality of Anchorage — about one church or house of worship for every 829 people in Alaska’s largest city. The two most prominent churches, Anchorage Baptist Temple and Changepoint, combined, represent $105,117.14 in lost revenue from property taxes every year. The Alaska State Constitution prohibits taxes being derived from “property used exclusively for non-profit, religious, charitable, cemetery, or education purposes.”
Assemblywoman Amy Demboski thanked Cason for “leading by example.” To date, no one else is following the example AUUF provides.
Cason responded: “We are much richer than what it costs us to be here.”