Is San Francisco Punishing Catholic Church for Prop 8?
Arguing that property transfers among various Catholic organizations amounts to a substantial tax-generating array of business transactions, the city of San Francisco has moved to collect $15 million from the church--while onlookers declare that the tab is "retaliation" for the church’s support of Proposition 8.
The Archdiocese of San Francisco has contested the tax, saying that similar internal transfers of assets have not resulted in other denominations being taxed.
The assessor’s office received a letter from an attorney for the Archdiocese, Jack Hammel, according to a Jan. 14 article published in the San Francisco Chronicle.
The letter read in part, "The city has applied the law in an uneven fashion (e.g. We are aware of non-Archdiocesan, non-Catholic charities which have transferred property to other charities and no transfer tax has been levied)."
But the city’s assessor-recorder responded that the case received a thorough review beforehand to ensure that the church would not be treated unfairly.
Said city assessor Phil Ting, "Because we knew the accusations could be out there [that we were treated the church unfairly], we worked to look at every single document so we could totally and completely understand their argument."
Ting went on, "We looked at all the various exemptions that could have been applied, and we felt that none of them were applicable in this case.
"That meant it was our determination that this was a taxable event."
The article said that the total bill for the transfers, which involved 232 properties changing hands between various organizations, could range from as low as $3 million to as high as $15 million--half the total that was charged in taxes in 2007 when ten properties in the heart of the city were sold off.
Though the current tax claim by the city does not involve any property being bought or sold, the fact that different business entities are coming to acquire land and buildings makes the transactions liable to the transfer tax, according to Ting.
Religious-right Web site LifeSiteNews.com claimed in an article titled "San Francisco Set to Tax Catholic Church Millions in Suspected Prop 8 Retaliation" that, "Many are decrying the move as retaliation for the church’s support of California’s same-sex ’marriage’ ban," the controversial amendment to the state constitution known as Proposition 8, which eradicated the existing right of marriage for gay and lesbian families when voters narrowly approved the measure in November.
The San Francisco Chronicle did not mention Prop. 8, but LifeSiteNews.com article quoted California’s Campaign of Children and Families’ Randy Thomassen as saying, "This is fishy at the least and evil at the most."
Added Thomassen, "Phil Ting is doing to the Catholic Church what has not been done in other venues, taking away the Church’s tax-exempt status in regards to property."
The article noted that Prop. 8 opponents had questioned the legality of the Mormon and Catholic churches interjecting themselves to such a large degree into the ballot initiative campaign that unfolded prior to the rescinding of marriage equality via popular vote.
Following voter approval of the repeal of marriage rights, there was a call from some quarters for the churches to lose their tax-exempt status, noted LifeSiteNews.com.
Thomassen suggested that for Ting, the issue may have been personal, saying that the city assessor "went head to head with the Catholic church over marriage between a man and a woman," and saying that Ting was now "aiming his rifles... right at the Catholic Church," the LifeSiteNews.com article said.
A Catholic blogger made a similar suggestion.
The LifeSiteNews.com article also quoted Jack Smith, blogger for Catholic Key, as saying, "Any clear-eyed observer might view this action by Ting, who’s rumored to want the Mayor’s chair after [Gavin] Newsom, as pandering to the anti-Catholic sentiment of voters in San Francisco."
However, the San Francisco Chronicle reported that Ting had characterized the tax bill as in keeping with the program of corporate taxation that he had stewarded during his three years as city assessor.
Ting called the tax bill "an affirmation of the work we had already started doing and will continue to do to make sure every taxpayer is treated fairly."
To the church, however, the shuffling of properties is simply part and parcel of a reorganization effort.
A spokesperson for the Archdiocese of San Francisco, Maurice Healy, said that Ting had "taken a step that is unprecedented in the history of the state of California.
"He has determined that an internal reorganization of church property, within the family of corporations of the Archdiocese of San Francisco, constitutes a ’sale’ and is subject to a property transfer tax."
Added Healy, "The law is overwhelmingly in favor of the archdiocese in holding that church property transfers of this nature are exempt from transfer taxes" because all of the property involved ultimately belongs to the archdiocese.
But Ting’s office has determined that this is not, in fact the case.
Said the city assessor, "These are separate legal entities, and the reorganizations were not just a cosmetic, simple reorganization."
The issue is headed to a city review board, the Chronicle reported.