Indiana Masonic Home, total assessed value $57.5 million. PHOTO BY SCOTT ROBERSON
A closer look
Here's a look at values of some of the businesses and organizations in the county that don't pay property taxes and the total value of exempt organizations:
Indiana Masonic Home
More than 270 acres on State Street in Franklin
Total value: $57.5 million
Franklin United Methodist Community
More than 120 acres on Jefferson Street and Westview Drive
Total value: $41.6 million
Johnson Memorial Hospital
Hospital, other buildings and property on Jefferson Street in Franklin
Total value: $38.5 million
Greenwood Village South Retirement Community
More than 40 acres on U.S. 31
Total value: $7.7 million
Greenwood Christian Church
More than 30 acres on Averitt Road
Total value: $5.4 million
Grace United Methodist Church
More than 10 acres in Franklin
Total value: $1.6 million
Mount Auburn United Methodist Church
More than 15 acres on Stones Crossing Road in the Center Grove area
Total value: nearly $750,000
By ANNIE GOELLER, Daily Journal of Johnson County staff writer
Some of the largest employers in Johnson County don't pay taxes to support schools, police and other government services.
Franklin College, Johnson Memorial Hospital, The Indiana Masonic Home and Franklin United Methodist Community are included on a list of the county's businesses and organizations that don't pay property taxes.
The list includes religious, charitable and educational institutions that have applied for tax-exempt status, totaling more than $280 million in value, according to the Indiana Department of Local Government Finance.
Every two years, the organizations and companies have to file paperwork, which is reviewed by a county board.
Some of the state's requirements for being exempt include providing charity to the community or giving health care to the indigent. The rules also state that the building and land are not being used for profit.
The organizations, including churches, private schools and some retirement communities, still are assessed by the county, meaning officials know how much each is worth in market value.
For example, if the Methodist community and Masonic home in Franklin were taxed, the two would add nearly $100 million in value into the city's taxing district and make up about 12 percent of the total assessment.
In the tax formula, when the assessed value of an area increases, the tax rate decreases. But that also can be affected by other factors, such as government spending.
Local organizations said they are able to do more charitable work and help the community by not paying a property tax bill, and that they often make up for the lack of a tax bill by spending money within the community and paying employees.
Some local groups, including Franklin College, were criticized last year by the Indiana Association of Cities and Towns for not paying a tax bill.
Since then, the college has commissioned a study, which found that the college makes up 6.5 percent of the city's expenses, such as in police and fire protection, and 8.3 percent of the revenue, through jobs and spending from the college, students, staff and visitors.
One dollar out of every $12 spent in the city is a result of the college being there, said Jay Moseley, Franklin College president.
That translates into a net benefit of $300,000, he said.
Moseley didn't know what the tax bill would be but said he believes the college is contributing more already than what would be paid in taxes, such as through scholarships for students.
At the end of the fiscal year, the college had spent nearly all of its nearly $17 million budget and put $8,000 back into savings, which wouldn't be enough to afford a tax bill that could top $100,000, Moseley said.
At the Indiana Masonic Home, a senior living community with more than 400 residents, the county deemed the property to be worth is more than $57 million. If the community were taxed, it would pay a few hundred thousand dollars.
A bill of that size would cut into how many people the community can care for, said John Rose, chief executive officer for the community.
The community's budget is more than $19 million. Of that, 65 percent pays for the 300 employees who work there, and the rest goes to supplies and services, most of which are bought in the community, he said.
The organization also helps pay the living expenses and care costs for about 40 percent of its residents, he said.
Every time an expense is added, the community has to tighten its belt, he said. That can only happen so many times before the money runs out, Rose said.
The story is the same at Johnson Memorial Hospital, where the hospital paid $62 million for discounts and charity and nearly $6 million for patients who could not pay their medical bills, said Bill Oakes, director of business development.
The county valued the hospital and its land at more than $38.5 million. The hospital includes financial assets in its valuing for insurance purposes and valued the facility at more than $80 million.
If the county pushed the value of the hospital to what officials there say it's worth, it would be one of the highest values in the county - not too far behind Greenwood Park Mall. And the tax bill could be as much as $1 million.
A bill that size would wipe out the hospital's bottom line, which the hospital uses to reinvest in the community, Oakes said.
"(Not having a tax bill) gives us financial breathing space so we can meet the needs of everyone, regardless of whether they can pay, where they live or their background," Oakes said.
To pay the bill, the hospital would need to charge more or do less to cut its expenses, he said.
Charging more isn't an option for some organizations, such as churches, where pastors said they would need to cut services and programs if they were forced to pay tax bills, and Franklin College.
If the college raised tuition, which is $21,150, scholarships for students also would need to be raised. Moseley said 97 percent of students at the college receive scholarships or financial assistance.
"The money we have, we actually use to scholarship students so they can afford to come here. Raising tuition doesn't make sense," he said.
When property taxes increase, local churches feel the impact, even though they aren't paying a bill.
Church members have to pay more in taxes, so they make cuts in their expenses, and church donations are often on that list, said David Strange, executive minister of operations at Greenwood Christian Church.
The church has one of the highest assessments of churches countywide at more than $5 million. Strange said that number is about half of what the church lists as its value for insurance purposes.
With a value of $5 million, the tax bill could be close to $100,000, he said.
The church doesn't keep extra money, and its 2,200 members can only give so much. That money is used to pay for programs, employee salaries and utilities at the church.
If officials were forced to pay a bill nearing $100,000, something would need to be cut from the nearly $2.75 million budget, he said.
"The biggest advantage is that whatever the tax bill would be can be used for ministry," he said.
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