Unfair Treatment?, California Catholic Daily, January 15, 2009

"Unfair Treatment?"

California Catholic Daily
January 15, 2009

http://calcatholic.com/news/newsArticle.aspx?id=0cb3bf3e-a311-45d3-b57b-5e2532e8d166

San Francisco hits archdiocese with $15 million tax bill

“San Francisco County Recorder, Phil Ting, has taken a step that is unprecedented in the history of the state of California,” said archdiocesan spokesman Maurice Healy in an emailed statement to California Catholic Daily. “He has determined that an internal reorganization of church property, without consideration, within the family of corporations of the Archdiocese of San Francisco, constitutes a ‘sale’ and is subject to a property transfer tax. The Archdiocese, therefore, has filed a formal appeal to contest this determination.”

Healy cited a Dec. 7, 2007 statement by Archbishop George Niederauer regarding “certain corporate structure changes” published in the archdiocesan weekly Catholic San Francisco: "The goal here in San Francisco has been to allow the day to day operations of our parishes and schools to continue in a cohesive, efficient manner while at the same time establishing simple ownership models that clearly distinguish the canonical assets of the parishes and schools from those of the Archdiocese in general."

The archdiocesan spokesman continued, “The law is overwhelmingly in favor of the Archdiocese in holding that church property ‘transfers’ of this nature are exempt from transfer taxes. The California legislature, courts, the State Board of Equalization and the Attorney General have repeatedly stated that religious corporations are merely permitted as a convenience to assist in the conduct of the temporalities of the church -- which is the real owner of church property. Counties throughout the state have recognized this fact in connection with similar corporate reorganizations in other dioceses.”

According to a story published yesterday by the San Francisco Chronicle, the “tax bill would be the second largest of its kind in San Francisco history.”

Ting, the San Francisco assessor-recorder, told the Chronicle, "Because we knew the accusations (of unfair treatment) could be out there, we worked to look at every single document so we could totally and completely understand their argument. 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 “unfair treatment” allegation was raised in an email to the assessor’s office from archdiocesan attorney Jack Hammel cited by the Chronicle, which said “the city has applied the law in an uneven fashion,” and noted that some non-Catholic charities “have transferred property to other charities and no transfer tax has been levied.”

The city and county of San Francisco has a unified government, which means Ting’s proposed assessment covers all property transfers by the archdiocese in the County of San Francisco. The archdiocese internally transferred 232 pieces of property in 2008, the Chronicle reported. San Francisco property-transfer taxes plummeted from $6.7 million in 2007 to about $1 million in 2008, creating a severe budget crisis, said the newspaper, but Ting told the Chronicle, “The archdiocese is not being taxed to make up for a budget deficit.”

Unmentioned in the archdiocese’s statement or the Chronicle’s story is the history of ever-increasing hostility between the Church and San Francisco’s government dating back to a March 21, 2006 resolution adopted by the San Francisco Board of Supervisors in reaction to the Vatican’s opposition to adoptions by homosexual couples. The resolution labeled the Vatican a “foreign country” whose moral teachings are “hateful,” “insulting and callous,” and “insulting to all San Franciscans,” and called on then Archbishop William Levada (now head of the Congregation for the Doctrine of the Faith) to defy the Holy See. The resolution also characterized Catholic beliefs as “defamatory,” “absolutely unacceptable,” “insensitive,” and “ignorant.”

More recently, following Archbishop Niederauer’s open support for Proposition 8, the constitutional amendment approved by California voters last November prohibiting same-sex marriages, there have been growing demands among homosexual activists that the Church’s tax-exempt status be revoked.