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Newsletter > September 2003 > "ANTI-GREEK BIAS MOVES OHIO TAX COMMISSIONER"
ANTI-GREEK BIAS MOVES OHIO TAX COMMISSIONER
The Ohio Tax Commissioner, Thomas M. Zaino, challenged the tax exemption of a sorority residence known as Magnolia House, owned by the Case Western Reserve University in Cleveland, Ohio. Alpha Phi has a chapter whose members live in Magnolia House while attending Case Western Reserve as full-time students.
The Tax Commissioner’s lawyer, Attorney General Jim Petro, through his assistant, Janyce C. Katz, asserted to the Supreme Court of Ohio:
- “Granting a tax exemption to CWRU for the Magnolia House occupied by students who are members of Alpha Phi ‘would mock the purpose of a University, if that purpose is to impart the knowledge of scholars and to encourage independent, intellectual thought and study.’”
- “The use of this property is in no way primarily charitable, nor is it primarily educational.”
- “The use of the Magnolia House by Alpha Phi students at CWRU is not properly used with reasonable certainty in carrying out the necessary objects and purposes of the University.”
The case arises because the Ohio taxing authorities denied property tax exempt status on the property that Case Western Reserve University would have otherwise enjoyed for the value of the Magnolia House if the house had been occupied by randomly assigned students instead of by Alpha Phi.
The National Panhellenic Conference and Alpha Phi filed an Amicus Curiae brief with the Supreme Court of Ohio to demonstrate the misperceptions demonstrated by the Attorney General’s Office. The brief was written by Timothy M. Burke, of Manley Burke, as counsel for National Panhellenic Conference and Alpha Phi.
Among a variety of facts called to the high court’s attention, the brief quotes the constitution of the National Panhellenic Conference (NPC) which was founded in 1902: “The object of this organization shall be to maintain on a high plane fraternity and interfraternity relationships, to cooperate with college and university authorities in their effort to maintain high social and scholastic standards throughout the whole college or university, and to be a forum for discussion of questions of interest to the college or university and the fraternity world.”
The brief also cites the Unanimous Agreements which begin with the Panhellenic Creed stating: “We, the undergraduate members of women’s fraternities stand for good scholarship, for guarding of good health, for maintenance of fine standards; and for serving, to the best of our ability, our college community.”
The Supreme Court of Ohio will learn from the brief that the Panhellenic Conference’s 26 member groups have initiated over 3,600,000 members and currently have 2,908 chapters on 620 campuses throughout the United States and Canada. In addition, there are 4,678 alumnae chapters. In the past academic year, more than 80,000 college and university students joined NPC member organizations.
The brief emphasizes that the NPC groups devote a great deal of time to support important charitable, artistic, and educational resources in our country. Examples include:
- McDowell Colony, a national haven for artists funded by Alpha Chi Omega
- Chaim Sheba Medical Center in Israel, supported by Alpha Epsilon Phi
- The Chi Omega Greek Theater on the University of Arkansas campus, the only structure of its kind in the United States, which is regarded as an almost exact replica of Dionysius’s Theater at the foot of the Acropolis
- Pi Beta Phi’s support of education and the arts in Gatlinburg, Tennessee, which began with funding and running the first medical center and the first public school in Gatlinburg, where the public school still is on Pi Beta Phi property and carries the fraternity name. In the same community, Pi Beta Phi operates Arrowmont, a nationally recognized school of arts and crafts accredited through the University of Tennessee at Knoxville
- Alpha Xi Delta’s support of programs for respiratory health
- Delta Gamma’s support of programs for vision health
- Delta Phi Epsilon’s support of cystic fibrosis research
- Delta Zeta’s promotion of programs for the prevention and cure of hearing problems
- Kappa Alpha Theta’s support of curing communication disabilities
- Kappa Delta’s support of programs to deal with child abuse and children’s health
- Kappa Kappa Gamma’s promotion of programs for rehabilitation of the handicapped
- PROJECT HOPE, supported by Phi Mu
- Phi Sigma Sigma’s support of the National Kidney Foundation.
The brief also highlighted the great educational programs that NPC and its members have developed to promote academic excellence and that the 26 NPC member groups have scholarship programs which provide financial assistance to undergraduate active members and often to graduate members to encourage graduate education. During the 2001-2002 academic year, NPC alumnae associations awarded $130,000 in scholarships to 556 college and university students.
A Case Western Reserve University witness confirmed in his testimony before the taxing authorities that the sorority was a solid contributing member of the academic community. “The Alpha Phi Sorority has always been in good standing. It is a sorority that always makes the number of students that it can rush. It always rushes that number. They have never presented a problem. They have always been active in community service and educational programs. They have met all of the required program standards around alcohol and sexual harassment and risk management. They are in good standing…. Their academic performance is above average.”
The NPC brief urges the Supreme Court to take judicial notice of the high standards of Case Western Reserve University and argues that to maintain academic performance above average in this institution does not happen “without serious attention to academic performance” in the “rigorous undergraduate program.”
The NPC brief supports the arguments presented by Case Western Reserve University attorneys from the law firm of Taft, Stettinius & Hollister that:
- “The University is entitled to tax exemption for Magnolia House under the tax laws of Ohio because Magnolia House belongs to an educational institution and is used by the institution for educational purposes.”
- Magnolia House is exempt from taxation under the statutes of Ohio because it is under the direct control of an educational institution, and made available “for use in furtherance of or incidental to” the institution’s educational purposes; and not made available with a view to profit.
- Magnolia House is exempt from taxation under the statutes of Ohio because it is “a building connected with a public institution of learning and is not used with a view to profit.”
This controversy is another illustration of how the “Animal House” image can close the minds of public officials and ordinary citizens to the reality of the positive educational impact that Greek organizations have throughout the country. Perhaps the Supreme Court of Ohio will take this opportunity to reject the preconceived notions of the taxing authorities and recognize the outstanding educational contribution that Greek organizations make to students on campuses throughout the United States.
This is not the first tax case in which Mr. Burke has challenged the unlawful imposition of real estate taxes on nonprofit organizations. He successfully argued before the Supreme Court of Ohio that a nature conservation organization that acquires property to preserve it and turn it over to local park authorities should not be taxed during the period when the preservation organization holds title to the real estate. Little Miami, Inc. v. Kinney, 68 Ohio St.2d 102, 428 NE.2d 859 (1981).