Wednesday, January 14, 2009

Prop. 8 Payback against Church?

The San Francisco Chronicle ran a story today on San Francisco City Assessor Phil Ting's attempt to squeeze millions from the Catholic Archdiocese of San Francisco in the form of Real Estate Transfer Tax. The unprecedented action is looking a lot like payback against the archdiocese for its support of Proposition 8.

A little backstory - When you sell a piece of property in many California jurisdictions, including San Francisco, the seller must pay a rather exhorbitant tax for the privilege which is based upon the value of the property. It is akin to a sales tax on a home or commercial property.

The San Francisco Archdiocese owns hundreds of lots in San Mateo, Marin and San Francisco counties. The exceedingly vast majority of these properties are the lots which make up a parish plant, i.e., church, school, parish hall, parking lot, rectory. The Chronicle story is mistaken to call the properties in question "empty lots and commercial land". They are not.

The Archdiocese has historically held title to these properties under two names - The Roman Catholic Welfare Corporation and the Roman Catholic Archbishop of San Francisco, a Corporation Sole.

In December, 2007, San Francisco Archbishop George Niederauer announced a corporate restructuring within the archdiocese and by May 2008, almost all properties in question had been consolidated under the title of the Archdiocese of San Francisco Parish and School Juridic Persons Juridic Property Support Corp.

Since this is not a sale or transfer to an different organization or person, no transfer tax is invoked and no transfer tax has ever been invoked in the history of the state for such a transaction. According to Archdiocesan Communications Director Maury Healy, "a tax on transfers of property, all owned by the Catholic Church, within the same family of Archdiocesan corporations, is unprecedented in the history of the state of California and the law is overwhelmingly in our favor on this subject."

In fact, the archdiocese' properties in San Mateo and Marin counties were transferred normally and without a transfer tax imposed. Yet, after a seven month delay, according to Healy, the San Francisco Assessor/Recorder issued a determination that a tax is owed on any transfers in San Francisco County. Apparently pulling a number out of his hat, Phil Ting told the Chronicle that the assessment would be $3-15 million, making it the second largest transfer tax imposed in City history.

The City government has a history anti-Catholicism which has only become more strident, and politically advantageous, since the passage of Proposition 8. Mayor Gavin Newsom excoriated the Catholic Church and the archdiocese during a tirade at what was supposed to be a Mayor's Prayer Breakfast with religious leaders, including Archbishop Niederauer. The Mayor, according to reports, got a standing ovation.

Angry calls for the removal of church tax exempt status are deafeningly widespread in the City. The transfer tax has nothing to do with tax-exempt status, but it certainly is sticking it to the Church.

Any clear-eyed observer might view this action by Ting, who's rumored to want the Mayor's chair after Newsom, as pandering to the anti-Catholic sentiment of voters in San Francisco. At least that's what his supporters are applauding in the combox over at the Chronicle, excerpt:

- Perhaps the archdiocese should have spent less on Prop 8 and instead payed their taxes.

- "Preach politics? Start paying taxes!!"

- Phil Ting for Mayor ! Phil Ting for Governor !