Report on Finance Committe Hearing Concerning Churches, Farmers' Markets and Property Taxes

I was glad to join some farmers and folks from the Washington State Farmers' Market Association in Olympia today to speak in favor of a house bill that will allow non-profits, including churches, to host Farmers' Markets without losing their tax-exempt status on the property used by the market.

No one spoke against the legislation and all in all I'd say everyone on the Finance Committee seemed receptive to the proposal.

My remarks to the committee are below the fold:

My name is Craig Goodwin.
I manage the Millwood Farmers’ Market in the West Valley of Spokane and am Pastor of Millwood Presbyterian Church, a 500 member church in the West Valley of Spokane.

We have the dubious distinction of being the location where it was first discovered or recognized by the Department of Revenue that Farmers’ Markets were being held on non-profit exempt property in violation of the current laws regarding exempt property.

Chris Baker from the Department of Revenue stopped by the church last May to do a perfunctory audit of our church property non-profit exemption status. He happened to show up on a Wednesday between 3 and 7pm when we host the farmers’ market in our church parking lot. He explained that they had no choice but to remove the part of the church property used for the market from the exempt rolls.

I protested that the church doesn’t make money on the market, that in fact we lose money on the operation of the market and consider it part of our mission in the community.

I argued that while the market is by strict definition a commercial activity, in our experience it was about bringing our community together and helping revitalize the historic city that we love. It was about getting neighbors talking to each other and interacting.

I protested that there are two other churches in Spokane that host Farmers’ Market in their parking lots, it’s the way we do it in Spokane, I said. You can imagine my dismay when he asked for the contact information for the other churches. I told him I’d let him figure it out, and to his credit he did.

I could tell that Chris took no joy in revoking the exempt status of the property but in his word, he had no choice. I spoke with people in Spokane and Olympia about this issue and the refrain that I heard from everyone is that the way the codes are currently written, they have no choice but to charge us property taxes on the land.

They made it very clear that it would require legislation in order for a church or non-profit organization to host a farmers’ market and maintain the non-profit exempt status on that land.

And so I am very pleased that you all will be considering just such a piece of legislation and I encourage you to pass it. There are others that would like to be here as well today and so I'd like to speak on their behalf as well.

I speak on behalf of three churches that host farmers markets in Spokane, two smaller neighborhood markets, Millwood and South Perry that meet on Wednesday and Thursday afternoons and the downtown Spokane Farmers’ Market that meets Wednesday and Saturday mornings throughout the summer. The property tax burden for Millwood and South Perry is around $700 each annually for the property used for the market and around $4,000 for the downtown market. While the Millwood and downtown markets are looking for ways to absorb the costs, the South Perry market is currently homeless because the church balked at covering the taxes or passing the cost onto vendors.

I speak on behalf of the over 75 farmers and artisans that sell at these three markets.

I speak on behalf of thousands of low income families that redeemed close to $40,000 of WIC checks at these three markets in 2008. I’m sure it was even more families and more vouchers in 2009 given what’s gone in the economy.

I speak on behalf of the businesses nearby the markets like the Starbucks across the street from downtown market, and the Rocket Bakery two blocks from the Millwood market, and South Perry Pizza that just opened in the South Perry neighborhood. These are all neighborhoods in the process of revitalization and the markets play a key role in that process.

I speak on behalf of the neighbors, especially around Millwood. I overhead a neighbor walking with a friend and introducing her to the community. As they walked by the church she pointed with pride to the bare asphalt of the church parking lot and said we have a farmers’ market here in the summer. I guarantee you the neighbors never bragged about the church parking lot before we started the market.

I speak on behalf of the neighbors that sent in letters protesting the actions of the Department of Revenue and even sent in checks saying things like, I’m not much of a church person but it’s not right what they’re doing.

And in a broader sense I speak on behalf of all the faith communities and non-profit organizations that are seeking the welfare of the communities they are called to serve. I asked the Department of Revenue for some clarification on why church property is exempt from property taxes and they explained that practice actually preceded statehood. We’ve always done it. I assume that we started that practice out of some implicit social contract that churches are good for neighborhoods, good for communities. Us churches in recent years have not always lived up to our end of the bargain, getting caught up in our own interests and at times losing site of the neighborhoods that we reside in. I speak on behalf of churches like those in Spokane who are finding new and creative ways to live up to our responsibilities as good neighbors. Now is not the time to revoke the social contract, it’s time to reinforce it.

Thank you for your time.