Real Estate Tax Exemptions

Robert Tideman

[Reprinted from The Gargoyle, January, 1959]

Overlooked in last month's article on the taxation of private schools in California were vital considerations that have forced themselves upon the attention of some of us who are close to the California scene.

The taxes at issue are not income or sales taxes, but property taxes, a most significant part of which fall upon the value of land. Gargoyle readers do not need to be reminded that taxes on the value of land are not an "attack" by the State. On the contrary, any nongovernmental landholders who seek or defend exemption from such taxes are themselves making necessary the oppressive taxes on labor and capital which do attack private enterprise.

The private schools involved in the recent contest -- including parochial schools which, of course, are also private -- paid taxes on the land they occupied from the earliest days of statehood right up to 1952. During this long period they grew and flourished. In 1926 and 1933 they had sought the privilege of tax exemption but were defeated at the polls. In 1937 a similar attempt was defeated in the Legislature. But in 1952 California voters wearily conceded the long-sought real estate tax exemption by the narrow margin of 50.8 percent to 49.2 percent of the vote. Thus the late initiative amendment was scarcely a "subtle attempt … to tax them out of existence," as The Gargoyle reports. It was simply an attempt by citizens to return these private schools to the same real estate tax obligations which they had shared with other landholders, from the State's earliest days until six years ago.

The genuinely "subtle attempt" is the one being made to represent all resistance to such land tax exemptions as "attacks" motivated by "bureaucracy" or even "bigotry." Such hot charges, it seems to me reflect a weakness of argument.

To be sure, certain marginal private schools occupying valuable land might have to move or even close if compelled to resume paying for the public services such as police and fire protection which give value to the land they hold. And why not? Any enterprise whose customers do not get enough value from its service to pay its bills ought to retrench.

Granted that parents have both a natural and a constitutional right to choose their children's schools, this right does not convey the privilege of holding school land tax exempt. Each of us has the right to construct private parks, roads, libraries or tennis courts, to provide his own police and fire protection, or to furnish any like facility also provided by government. But that right does not convey the privilege of tax exemption to the land so used. For any tax exemption of nongovernmental land compels other taxpayers to pay for the public services enjoyed by the exempt landholders. In effect, such exemptions compel the payment of taxes for the support of private schools, which is indeed the accepted practice in some foreign lands but not in the United States -- not yet. Land tax exemptions deprive the public schools of their natural revenue, deny "the equal protection of the laws" guaranteed by the 14th Amendment, deny, in fact, the equal right to Nature's gifts, and are indefensible on any ground whatsoever.

As for Bishops' reaffirmation of the "right to teach" conveyed to the Roman Catholic Church by "her Divine Founder Himself," it goes without saying that this right is shared by all.

The Bishops are quoted as declaring "Under whatever form of tyranny, from Caesarism to Sovietism, the subversion of human freedom has almost invariably begun with restriction or denial of the right of the Church to teach." This is not correct. The Gracchi brothers were stoned and beaten to death before the birth of Jesus, the Nihilists of whom George wrote went to the gallows 38 years before the Soviet Revolution, and, painful as it may be to admit it, in Spain and the Dominican Republic, where the right of the Church to teach is certainly not restricted, the face of freedom is all but ground to powder.

The statement that "any governmentally run institution tends, at best, to mediocracy" is generally true of federal agencies, which do not summon the attention of direct land tax payers to oversee their operations; but is not true of independent local school districts which draw revenue from district landholders who themselves are in competition with the landholders of nearby districts to attract population to their areas.

As for the alleged superiority of private schools, recent surveys of the college records of public and private high school graduates in California reveal little difference between the scholastic records of the two groups. Public school graduates, as a matter of fact, were found to do somewhat better. Dr. Edward McGlynn, head of the largest Roman Catholic Church in New York City, himself staunchly favored the American public school system and resisted the introduction of church schools in his parish. Henry George speaks best for himself. "The great merit of our public schools", he wrote, "and the great necessity for public schools in a country like ours, is that they bring together children of all creeds and classes and thus wear away the prejudices that must inevitably arise where children of one creed or class are kept from association with children of other creeds or classes. People hate each other and despise each other just in proportion as they are kept separate from each other; and the most important lesson which many a boy and girl learns in our public schools is that children of other faiths, which the narrower teachings of home and Sunday School might lead them to despise, are just as intelligent, just as conscientious, just as kindly, and just as lovable as anyone else. To our public schools more than to any other of our institutions is due the growth of that spirit of toleration between various creeds which is so marked in the United States."