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January 21, 2000/7 Shevat 5760, Vol. 52, No.20
JCRC pushes for changes in state tax laws
Shoah survivors, social services would benefit
TAMI BICKLEY
Associate Editor
With a new state legislative session under way, the Jewish Community Relations Council of the Jewish Federation of Greater Phoenix is pushing for changes in Arizona tax laws geared toward protecting Holocaust survivors and social service programs.
What is being called the "Reparation Bill," being spearheaded by the JCRC, seeks to make Holocaust reparation an exemption, rather than taxable income as it is currently classified under state law.
Tami Schultz, director of the JCRC, said that under proposed language that would be added to existing law, Holocaust survivors would no longer be taxed on their deserved compensation. Schultz said current law often adds insult to injury for survivors.
"It has taken a long time for many of these (Holocaust survivors) to be able to receive any kind of reparation, whether it be from Swiss banks, insurance companies or private corporations," Schultz said. "These people had to spend part of their lives in concentration camps. To then be taxed on these reparations, many of which are small, $1,000 or $500, is ridiculous."
So far, 12 other states have been successful in implementing new reparation language. The problem with Arizona's current conditions, Schultz noted, is two-pronged: Because reparation is considered income, the elderly survivors receiving it not only pay taxes on it, but are also made ineligible for programs such as Medicare and Medicaid, which require that they not receive outside income.
If the new language is implemented, it is not clear whether those Holocaust survivors who have already paid income tax on reparation would be reimbursed.
The Arizona proposal has not been assigned to a legislative committee, nor has it received a bill number. The exact language of the proposal is still being discussed by the JCRC, Schultz said.
The JCRC is also trying to add new language to an existing state sales tax proposal, House Bill 2459, stating that religious non-profit (501(c)3) organizations in Arizona pay 7 cents on top of every dollar to the state.
"That money could be better used to provide additional social services ... we could put it back (into the community) for the causes we're (working toward)," explained Schultz.
The bill, which was assigned to the House Ways and Means Committee on Jan. 18, will likely be heard sometime after Jan. 24.
Bill McGibbon, chairman of the House Ways and means Committee, could not be reached at press time.
Art Paikowsky, executive vice president of the federation, may testify at the hearing. Before coming to the Phoenix federation in 1997, Paikowsky served as assistant executive of the Jewish Federation of Greater Washington, which encompasses the greater Wash. D.C., area, suburban Maryland (excluding Baltimore, which has its own federation) and Northern Virginia. Maryland is exempt from state sales tax.
"Improving the quality of life for citizens in (Arizona) is a private/public sector partnership," Paikowsky said. "How is it that 7 cents on top of every dollar that we could ultimately use to benefit our citizens in need, ends up going back to the state?"
Paikowsky said that in 20 other states, 501(c)3, non-profit organizations are not subject to sales tax. "We are encouraging Arizona to get on board. We are not pioneering anything here."
Schultz said she has drawn support from legislators and from other non-profit organizations of a number of different religious faiths that also want to re-direct sales taxes toward citizens in need.
In the next legislative session, Schultz said she will work on yet another bill that would include getting insurance companies to pay for genetic testing, which in most cases does not happen. Passage of the bill would benefit the Jewish community, she explained, because prospective parents could learn if they carry the gene for diseases such as Tay-Sachs disease - an enzyme deficiency found mainly among descendants of Eastern European Jews.
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