By Brian Love and Mike Householder
WASHINGTON – Tax exemptions enjoyed by three dozen special- interest groups that have offices in the District would be eliminated under a bill introduced Thursday by D.C. Del. Eleanor Holmes Norton.
Norton said the cash-strapped District government could no longer afford to keep the exemptions in place for the 36 groups – which include the National Education Association, the Brookings Institution and the Veterans of Foreign Wars – particularly since many of them occupy some of the city’s most valuable land.
“These exemptions compound other burdens that have severely weakened the District,” Norton, a Democrat, said in a written statement.
She noted that the federal government, which owns about half the land in the nation’s capital, pays no property taxes on it.
And suburban residents who commute to the District to work “get free use of the District’s services,” yet pay no commuter tax to the city, Norton said.
Thirty-five of the interest groups enjoy congressionally created exemptions from D.C. income and property taxes. The only exception is Fannie Mae, which pays property but not income taxes.
The exemptions for the federally chartered organizations were put in place before Home Rule was enacted, said Norton spokeswoman Donna Brazile.
Norton said such exemptions “are always wrong, because they shift the tax burden to residents and businesses who already pay taxes that are among the highest in the nation.”
The senior lobbyist for the NEA, the nation’s largest teacher’s union, said the nonprofit organization is willing to work with Norton and the District government on the issue. “We appreciate representative Norton’s desire to address the financial crisis in the city,” said Dale Lestina.
But spokesmen for some of the other groups targeted by her measure were not pleased with the prospect of losing their tax- exempt status.
“We believe we were granted tax-exempt status and nonprofit status because of the charity work we do,” said the VFW’s national legislative director, Jim Magill. “It would be a slap in the face.” The VFW has offices on Capitol Hill.
Fannie Mae, a federally chartered private housing lender headquartered in Tenleytown, paid $3 million in city property taxes last year, said spokesman David Jeffers.
“We sense no inclination by the Congress as a whole to add to the District’s problems by making the environment less friendly to business,” Jeffers said.
The Brookings Institution, an independent, nonpartisan research organization located near Dupont Circle, had no comment, said spokesman Stan Wellbourne.
Rep. Thomas M. Davis III, a Northern Virginia Republican and chairman of the House subcommittee that will review the measure, said it was “too early” to comment on it. No hearings on the bill have been scheduled yet, said a staffer for the House Government Reform and Oversight Subcommittee on the District of Columbia. -30-
