Plan to charge nonprofits draws fire

Greenwood officials are re-evaluating a proposal that could force churches and other nonprofit organizations to pay a fee to help fund government.

The plan to charge a fee would apply only to churches and other nonprofit organizations within the city’s tax-increment financing, or TIF, districts. Organizations and churches already located in those areas would not have to pay the fee unless they expanded, moved or bought new property, according to the proposal.

Clergy, leaders from area nonprofits and some city council members are asking the city not to charge the fee, and the city council has put off a decision on the plan until next month.

Council members Thom Hord, Bruce Armstrong, Ron Bates and Mike Campbell voted against the fee in August. The vote divided the city council 4-4, and the issue was brought up for more debate and another vote this week.

On Wednesday night, Steve Rhoades, pastor at the Point Church, asked the council to not enact a new fee. He said the fee would be a burden to churches and that requiring them to pay a fee could potentially force churches to close or hurt their operations.

In the coming weeks, the city council and mayor will step back and consider the proposal or if it should be changed. One possibility is to exclude churches from the fee, while charging other nonprofits. Greenwood Mayor Mark Myers wants to tweak the plan and not charge any nonprofits already operating in the city, even if they do expand or relocate.

“We understand what the city is trying to do and realize the hundreds of acres that are used by nonprofits that look and operate like for-profit organizations,” Rhoades said. “Our concern is what this would do to our churches. I think many just weren’t aware of the effect it would have on local churches.”

If the fee, which could be hundreds or thousands of dollars annually, is approved by the city council, it could make it difficult for churches to maintain the level of service and opportunities they provide to the community, he said.

Last week, Rhoades and members of three other local churches met with Myers to try to get him to change his stance on the fee, reiterating that it could shut churches down or make it hard for them to operate day-to-day if they had to pay the fee, equal to a property tax bill.

Myers said he is still in favor of charging the fee. But he is going to request that the fee be revised so that any nonprofit organization already operating in the city wouldn’t have to pay, even if it expands or relocates. Only new nonprofit organizations coming into the city would be required to pay the fee, Myers said.

Rhoades said churches serve a community and have a positive impact and shouldn’t have to pay. But council member Brent Corey said that a trade or union school that is not-for-profit or tax exempt also could argue it serves the community and helps people. The city council would face the difficult task of saying which nonprofits to exclude from the fee and which to charge.

Council member Bruce Armstrong, who is opposed to charging nonprofits, urged council members to listen to the arguments being made.

“We need to preserve the tax-exempt status of all the nonprofit organizations. Nonprofits are tax-exempt for a reason,” he said.

He doesn’t want to revise the proposal to exclude some nonprofits and doesn’t want the city to charge the fee to any of them.

Local business owner Chuck Landon said it will be difficult for the council to create a fee that will separate churches from other nonprofits, dictating which nonprofits pay the fee and which don’t.

“Bottom line is, a nonprofit is a nonprofit, and if you start picking and choosing, it’s not going to work,” Landon said. “I don’t think we should tax churches. Churches and other nonprofits are what make a community. This program might make the difference between them being in existence here or going somewhere else.”

Rhoades is asking leaders of nonprofit organizations that could be affected to contact the city council and attend the next meeting.

“I hope those organizations show up. They need to be represented,” Rhoades said. “I can’t speak for other places, I can only speak for the church. But if they have concerns, they need to be there.”

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Corey Elliot is a reporter at the Daily Journal. He can be reached at or 317-736-2719.