COLUMBUS – Charitable fraternal organizations more than a century old could avoid paying property taxes under a narrowly-crafted budget proposal that’s headed to a vote in the Ohio House.
Groups eligible for the roughly $4.8 million tax break include the Masons – who count Republican House Speaker William Batchelder as a member – Grange, Odd Fellows, Prince Hall Masons and Knights of Columbus. Veterans’ groups don’t appear to be covered.
The budget-writing House Finance Committee approved the tax measure Tuesday as part of a voluminous two-year, $61.5 billion budget package. The provision was included even as significant elements of Gov. John Kasich’s proposed tax code overhaul were removed from the bill to allow more time for study.
The panel voted 20-9 to send the bill to the House floor, where a vote is likely Thursday.
That was after agreeing to add $60 million for nursing homes; $16 million for a workforce training pilot program for the economically disadvantaged; a required study of gifted-education funding; and a prohibition against distributing contraceptives or promoting “sexual gateway activities” in health-education classes.
Batchelder spokesman Mike Dittoe said erasing the tax burden on fraternal groups is not a new idea.
“This was not suddenly generated by the Speaker or anything like that,” Dittoe said. “It’s been around for quite some time.”
He said the House twice passed bills instituting the exemption. They were sponsored by Republican state Sen. Jim Hughes, a then-state representative who’s also a Mason. Both bills stalled in the Ohio Senate.
“There is not conflict of interest on this because the Speaker is a Mason,” Dittoe said. “There are a large number of members on both sides of the aisle who belong to that organization and none of them are receiving a direct benefit because of this amendment.”
The website of the Masons’ Grand Lodge of Ohio attributed the amendment to Batchelder.
“HB 59 (the state budget bill) is our greatest chance to receive this well-deserved property tax (relief) and enable these fraternal orders to continue their charitable and social work,” the posting said. “To support Brother Batchelder’s efforts to enable our continued charitable and fraternal existence in Ohio communities, please send him as well as your state Representative and Senator a letter to that effect.”
Chad Simpson, the Grand Lodge’s director of program development, said he was uncertain of any role played by Batchelder, whose father, grandfather and great-grandfather were all Masons.
“He’s the Speaker of the House and it’s a part of the House’s budget and so I’m not sure how involved he was in that,” Simpson said. “We learned about it the same way you did and wanted to say how thankful we are.”
Simpson said the Masonic Lodge in Hilliard, a Columbus suburb, pays $8,000 a year in property taxes – a third of its budget. The Masons’ building in nearby Worthington, the oldest lodge building in North America, is tentatively looking for a buyer due to a $23,000 property tax bill, he said.
“Our buildings are not used like a business to generate income, they’re used just for meetings of the organization, or to organize charitable events,” Simpson said. “The typical lodge hall is, in a way, like another community center.”
But Bob Funk, secretary-treasurer of the Ohio arm of the Veterans of Foreign Wars, formed in 1899, said veterans’ groups would also welcome qualifying for property tax relief.
He said most are organized under a section of the federal tax code not mentioned in the budget amendment.
“I can tell you that the veterans’ and fraternal organizations, especially the veterans’ organizations, have been trying to get relief from the property tax for a long time,” Funk said. “I can guarantee you it’s a large percentage of their budgets, especially some of the larger posts. Some of the taxes are quite exorbitant.”
Legislative analysts indicated their $4.8 million estimate of projected losses to school districts and local governments from the exemption could “substantially understate” today’s reality, since the calculation is based on a 2001 survey.
The figure could also grow in the future as increasing numbers of groups pass their 100th birthdays.
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