A recent Facebook post made by VFW Post 696 revealed that the nonprofit owes over $20,000 in property taxes this year. The VFW is asking members of the community to come by their establishment and sign a letter of support to help save their organization.
Located at 311 Veterans Boulevard West, the VFW Post 696 has had its roots in downtown Owensboro since building the post in 1946. In recent years, Owensboro’s local VFW has found themselves in the center of different development projects, including the multi-million-dollar riverfront revitalization and Smothers Park project, two different hotels, the Bluegrass Music Hall of Fame & Museum, the Owensboro Convention Center and an ever increasing lineup of new restaurants and condos that have been built along the Ohio River.
Due, in large part, to these developments, property values have skyrocketed in the downtown area, causing property tax increases to go up as well. According to a consolidated tax statement shared by the VFW, they currently owe $20,434.86 in property taxes, due by Nov. 1.
VFW 696 owes $4,801.83 in property taxes to the City of Owensboro, and another $15,633.03 in property taxes to Owensboro Public Schools. The City left their real property tax rate unchanged for the 2019-2020 fiscal year at 26.6 cents per $100 of assessed valuation, while OPS opted to include tax exonerations from the previous fiscal year, increasing its property tax rate by three percent at 86.6 cents per $100 of assessed valuation.
Because the VFW is located in such a prime area for development and real estate, its property value was assessed at $1,805,200, which is up $1,280,200 since its last required valuation assessment was taken in 2015. At that time, the VFW’s property valuation was $525,000.
While this is an enormous increase in property value, this isn’t VFW’s first major increase in valuation. In 2011, the VFW’s property value was $225,000, meaning it nearly doubled between 2011 and 2015.
According to Daviess County Property Valuation Administrator Rachel Pence Foster, she is required to put 100 percent fair market value on the property values she assesses.
“The market drives that value,” she said. “Four years ago, it was grossly under-assessed. It did go up — that’s when everything was getting complete with the park — but [not by as much as it should have]. In 2011, it was grossly, grossly under-assessed.”
Foster said she valued two other properties in close proximity to the VFW — an attorney’s office and a block bought by Jagoe Homes — at $2.4 million and $1.9 million, respectively.
“[The VFW] is a prime piece of property on valued land,” she said. “One block [bought by Jagoe], one that was not on the river, was valued at $1.9 million.”
While veterans’ posts are exempt from federal income taxes under federal charitable organizations, they are not exempt from paying state property taxes, said Post 696 adjutant Chuck Kucera.
“[The property value] is up 423% from last year because of all the development going on around us,” Kucera said. “At one point, this post was the only building on the river, up and down the street.”
Kucera said former State Representative DJ Johnson filed a bill to exempt veterans’ posts from paying state property taxes, but that the bill died during the General Assembly’s regular session last year.
Foster, meanwhile, has tried to help the VFW achieve tax-exempt status at the state level. However, after fighting for an exemption and spending six months writing a proposal for exemption status, the VFW was denied property tax exemption by the state.
“It’s because they’re a private nonprofit and they pay dues,” Foster said. “It’s because it’s a private club. They would have to be a purely public charity, and they couldn’t be a club to be tax exempt. They’d have to change their laws and whole operation.”
Kucera said two new tax exemption bills for veterans have been filed and will be read during the January legislation session. He says he hopes thousands, if not tens of thousands, of people across the Commonwealth support those bills.
“On Nov. 1, we’ll have to pay that bill, but we can’t continue to do that forever or we’ll go bankrupt,” he said. “This post is a real bedrock for this community. At one time, all charitable nonprofits were 501c3s — then Congress said veterans should be put into a separate category for leniency with tax exemptions, so we are a 501c19.”
Kucera said the property tax increases aren’t the City of Owensboro’s fault, even though many people have directed their anger toward the City on the VFW’s Facebook post.
“There’s been a lot of rumors going around, and I don’t buy that,” he said. “The City doesn’t want this property. They’d like to build a condo on it. They’d like to see more tax revenue come from it, sure, but when people are blaming the City, that’s not right.”
City Manager Nate Pagan echoed that statement, saying the City has no interest in taking that property away from the VFW. The only part of this equation that’s controlled by the City, is the property tax rate, which did not change this year, Pagan added. He said the City’s property tax rate was typical for a city like Owensboro.
Foster said the property tax rate set by OPS was standard as well. Even though the school tax makes up the majority of VFW’s property tax bill, Foster said the 86.6 cents was an average rate when comparing that number to other schools across the state.
“It’s tough — I feel for them,” Foster said. “I would love to see them tax exempt, like many others in the same situation.”
