An Anchorage lawmaker is asking the Alaska Legislature to undo a 2006 change in state law that stopped city governments from taxing church-owned homes occupied by religious school teachers.
According to the municipal assessor's office, only one Anchorage church currently benefits from the 2006 amendment to the state tax code, and it's the same church that sought the amendment: the Anchorage Baptist Temple.
Rep. Berta Gardner, a Democrat who represents Midtown, submitted the undo legislation on Monday as House Bill 305. The measure is co-sponsored by another Anchorage Democrat, Rep. Lindsey Holmes.
"People support public services, we pay our taxes, and it just makes you really cranky to know you're also paying taxes for teachers at private religious schools," Gardner said in a phone interview from Juneau.
The Daily News reported in January that the Anchorage Baptist Temple owns 14 houses exempt from taxes because they are occupied by ministers or teachers at the megachurch, including its chief pastor, the Rev. Jerry Prevo.
Because none of the properties had been recently assessed, it was impossible to know precisely how much the exemptions were costing the city. Old assessment records indicate the total is more than $50,000 a year.
The newspaper story also reported that evidence which emerged during the 2011 divorce trial of Prevo's son Allen, also a minister at the Baptist Temple, revealed that Allen had a secret agreement to purchase his home. The city is now investigating whether that deal, and similar agreements with three other pastors, violate state law that requires the church to own a property before it can be exempted. A city spokeswoman said this week that the investigation was nearing completion.
The church's lawyer said the arrangement doesn't violate state law because the pastors don't really own the properties -- the Baptist Temple does.
The 2006 amendment to state tax law stemmed from a ruling by the Anchorage assessor that the Baptist Temple had been improperly claiming exemptions for religious school teachers, a janitor and a music director in charge of the church's "music ministry."
Then-Sen. Lyda Green, co-chair of the Finance Committee, attached an amendment to a House Bill in her committee that added religious school teachers to the exemption. Green, a Wasilla Republican, also broadened the existing exemption by allowing churches to set their own standards for ministers. To get the tax break, Green's amendment only required that they be employed "by the religious organization to carry out a ministry of that religious organization."
The bill was lobbied by the Baptist Temple's administrative minister, the Rev. Glenn Clary, who, like the Rev. Jerry Prevo, had served as Republican national delegates and has long been active in state politics (he is currently treasurer of the Alaska Republican Party). Green's amendment passed without a hearing and the homes of the teachers and the music director were reinstated as tax-exempt properties.
Gardner's bill would remove both the specific exemption for teachers and the broadened definition of a minister.
On Jan. 20, five days after publication of the Daily News story on the Baptist Temple properties, the municipal assessor's office provided the Anchorage Assembly with a list of church residences that benefited from the exemption. The list, requested by the Assembly Jan. 13, shows that of the 79 tax-free religious properties in Anchorage, only the Baptist Temple claims an exemption for teachers.
Those Christian-school teachers live in two duplexes, an apartment house and a single-family house, all owned by the Baptist Temple, the assessor said.
The Baptist Temple's 14 total exempted residences are the most in the city, followed by the Salvation Army and the Catholic Church with nine each.
Gardner acknowledged that the uncollected taxes don't amount to a large sum compared to the city's total tax receipts.
"It's not a huge amount of money, but it poisons the well," she said, making other taxpayers resentful. "It's about fairness," she said.
Most Alaskans support exemptions for churches themselves and the religious leaders who live in church-owned homes, she said, and her bill wouldn't affect that tax break.
Prevo didn't return a call requesting comment.
Gardner's bill was referred to the House Community and Regional Affairs Committee, where a staff aide to chairwoman Cathy Munoz, R-Juneau, said it would get a hearing.
The bill faces an uncertain future in the Republican controlled House, said Sen. Hollis French, D-Anchorage. French, an opponent of the 2006 amendment, said he would have introduced a similar measure as Gardner's in the Senate, but didn't want to put a lot of energy into it if it would just be killed in the House. Gardner's bill should show the strength of resistance to restoring the pre-2006 tax structure, he said.
"There's always been a continuing interest in protecting the property tax exemptions for religious institutions," French said. "The hearing process will bring them out into the open."
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