- The Washington Times - Monday, June 11, 2001

BALTIMORE — In neighborhoods not far from the growing harborfront tourist district, window frames hold plywood as often as glass, and blocks sport their own collections of for-sale signs.
Baltimore has lost 12 percent of its residents in the past decade, census figures show, and those 84,860 departures took with them tax dollars that would have collected trash, put out fires and provided police protection.
One resident, though, has become more entrenched in its gritty east-side neighborhood. The Johns Hopkins University, the citys largest private employer, spends hundreds of millions of dollars a year on new jobs and buildings.
Thats not enough for Mayor Martin OMalley. He sees a $21 million budget deficit and knows that Johns Hopkins and other nonprofits composing the fastest-growing part of Marylands economy do not pay city taxes.
"They all make the argument that their mission is too important to be taxed," Mr. OMalley said, adding that nonprofits take about 11 percent of the citys land off the tax rolls.
Mr. OMalley doesnt buy that argument, so Baltimore has become the latest city to ask nonprofits to pay up. Today, the City Council could decide whether to extend its 8 percent energy tax to cover larger nonprofit groups, such as hospitals and universities.
The mayor and council hope the tax will preserve services like twice-a-week trash collection and some of the 353 jobs threatened by budget problems that have arisen as the city looks to step up crime-fighting and clean up streets.
"I really think the amount of money were asking nonprofits to pay us is a fairly small amount in the scheme of things, when you consider the amount of land covered and the services provided," Mr. OMalley said.
Baltimores 8 percent tax, expected to raise about $3 million, would extend to fuel used by nonprofit colleges and universities, hospitals and nursing homes. Johns Hopkins and the University of Maryland Medical System would pay the most.
Smaller nonprofits, such as churches and homeless shelters, and advocacy groups like the National Association for the Advancement of Colored People, originally were included. But they were removed after local religious leaders converged on City Hall and vowed not to forget the tax during the next election.
Still, Baltimoreans have been slow to defend Hopkins and the University of Maryland Medical System.
The Rev. Gregory B. Perkins, president of the Interdenominational Ministerial Alliance, said trying to compare a church with Johns Hopkins "is like trying to compare a basin with the Atlantic Ocean."
"Johns Hopkins is a multibillion-dollar corporation who can easily pass that 8 percent tax on to the consumer," Mr. Perkins said.
But Dr. William Brody, president of Johns Hopkins, said the hospital operates on a razor-thin margin and the state rate-setting commission limits hospital charges.
He said the energy tax "can conceivably push the hospital into a deficit situation."
Johns Hopkins University has an endowment worth more than $1.8 billion, but Dr. Brody said the universitys ability to recoup any loss is limited. Tuition already is expensive, and the research-intensive university has a relatively small number of students, given its size.
The University of Maryland Medical System, which operates five campuses inside the city, said the tax would cost it about $800,000.
"I dont think that you recoup it," said Joan Shnipper, a corporate vice president. "You absorb it, and it means you have to eliminate something else."
Dr. Brody said Johns Hopkins brings more to the city than most taxpaying businesses. In 1999, it employed more than 18,500 people in the city, provided about $63 million in uncompensated medical care and spent more money on public health than the city health department.
The university talked 21 nonprofits into offering the city a collective $20 million payment over four years to abandon the tax proposal. No deal was reached by late last week.
"We recognize that the mayor has a short-term budget problem and needs help," Dr. Brody said. "Were willing, as the citys largest nonprofit, to do what we can to help."
Baltimores nonprofits are not the first to find themselves targeted.
In Colorado, citizens sponsored a 1996 ballot initiative to end tax exemptions for properties owned by churches and nonprofits. Only nonprofit schools and housing would have remained tax-exempt. The initiative failed.
Northwestern University and Evanston, Ill., have landed in court several times during their 130-year dispute over city services received by the tax-exempt institution.
Officials in Hartford, Conn., tried to draw middle-class families back into the city by creating zones where nonprofit social service agencies such as soup kitchens and homeless shelters were unwelcome.

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