With a $700,000 city grant and tax credits behind them, Humanim Inc. will rehab the long-abandoned American Brewery in East Baltimore into office space. That?s good news. The decision by the social services nonprofit to invest about $24 million to reclaim the blighted building should be celebrated and could lead to more development in neighboring blocks. But the city can not afford to keep attracting nonprofits without also attracting businesses.
Let?s be clear. We welcome Humanim to its new location and the 250 employees who will spend money in the area and who may choose to move to the city.
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But nonprofits do not pay property taxes. That means city services must be stretched farther without additional cash. And it keeps happening.
About 26 percent of the city?s property is tax exempt ? the highest percentage in the state. According to a recent Johns Hopkins study, nonprofits employ about 30 percent of the private sector workforce in the city ? about three times the average throughout the rest of the state ? and are the fastest growing employers in the city that can ill afford to subsidize anyone.
This year is the first year in over half a century that the city gained residents. Those 897 people are not enough to support an ever expanding nonprofit sector on top of ballooning pension and health care benefits for city retirees.
We need taxpaying businesses and their employees to move here. And the only way to do that is to cut property taxes in half to levels of surrounding counties ? unless the city wants to “invest” another $4 million per new resident. That is the amount an Examiner analysis recently showed is necessary to attract new people.
We?ve said it before but we?ll say it again: Cut taxes over time and ask nonprofits to foot a bigger percentage of the cost of providing services for them, at least on a temporary basis. We?ve requested and allegedly are supposed to receive a list from the city showing how much nonprofits contribute through payments in lieu of taxes, telecommunications taxes and other means. We know they in no way match the cost of providing services.
The city has tried every other method to attract new residents ? and new tax dollars that come with them ? and failed. Members of the City Council have no excuses. Cutting taxes must be their No. 1 new year?s resolution. The resulting bigger tax receipts and more jobs in Baltimore City means a more productive and wealthier region and state ? something everyone in Maryland can cheer.
