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Nonprofit Advocacy Matters | February 28, 2011

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February 28, 2011
New: National Council 2011 Public Policy Agenda
The National Council’s Board of Directors unanimously adopted the 2011 Public Policy Agenda. We believe this is the first comprehensive policy agenda that successfully blends guiding principles for nonprofits at both federal and state levels. The agenda is structured in six broad categories designed to educate policymakers and others about the work and impact of nonprofits. Those six categories also set forth a consistent context for the specific goals we seek to achieve. We’ve posted the Public Policy Agenda on our website, identified ways nonprofits can use the materials, and invited readers to give us feedback on these priorities.
 

 
House Adopts Big Cuts to Current Year Spending
On Saturday, February 19, the House of Representatives passed a Continuing Resolution to fund the federal government through the end of this fiscal year that would cut the federal budget by $61 billion in actual spending and $100 in "cuts" from what President Obama had proposed in February last year. The House-passed measure would eliminate funding for the Corporation for National and Community Service (AmeriCorps, VISTA, etc.) and public broadcasting in the 2013 fiscal year, and "defund" implementation by the Department of Health and Human Services and the IRS of the Affordable Care Act. A nationwide campaign to preserve funding for National Service programs is underway.

Senate Democratic leaders have rejected the extensive cuts. Action is necessary this week to extend funding of the federal government past the March 4 expiration of the current Continuing Resolution (CR). The House is expected to approve and send to the Senate a two-week extension of the current CR that imposes $4 billion in noncontroversial cuts in spending proposed earlier this month by President Obama. During the next two-weeks, congressional leaders will be focused on bridging the gap between the House and Senate over how much to cut from the current fiscal year that expires on September 30.
 
 


Hawai’i Considers Taxing Nonprofits
The Hawai’i House Finance Committee heard testimony late Friday on a bill to repeal the tax-exemption of nonprofits from the General Excise Tax and to impose a 4.4 percent tax on gross revenue from conferences, conventions, and trade exhibits for nonprofits. Similar legislation was considered last year. The Hawai'i Alliance of Nonprofit Organizations and The National Council of Nonprofits submitted statements in opposition to the legislation.

Do-It-Yourself Budget Balancing Tools
The nonprofit online news source, MinnPost, has produced an online budget balancing tool for readers to select among 37 proposals for cutting spending, raising taxes, or even cutting taxes in order to close a $6.2 billion budget gap in Minnesota. Each of the options is fully documented as a proposal under consideration. The Minnesota Budget Project, an initiative of Minnesota Council of Nonprofits, is one of the resources used by MinnPost to develop this tool. A similar budget calculator has been created by the group Oregon Budget Priorities to fill that state’s $3.5 billion shortfall.
 
Nonprofit Consolidation Fund in Proposed NC Budget
North Carolina would establish a new $25 million fund to encourage nonprofits and local governments to consolidate and collaborate to provide services more efficiently, if a budget proposal by Governor Bev Perdue were enacted into law. A new Consolidation and Efficiency Incentive Fund is designed "to incentivize local governments and state-funded nonprofit organizations to reorganize, consolidate or regionalize services where the state, local governments and nonprofit groups have shared responsibilities."      
 
Vermont Nonprofit Ticket Tax Repeal Sought
A bill pending in the Vermont House of Representatives would repeal the six percent tax imposed last year on sales of tickets to nonprofit entertainment events. Unless the new bill is passed, sales tax on tickets sold by nonprofits would begin being charged as of April 1, raising up to $700,000 in additional revenue for the state.

Trend Watch
Linking State Benefits to Community Service
Legislators in at least two states are eyeing volunteerism as a pay-back for benefits funded through state programs. The Utah Legislature passed a measure creating a pilot project in which about 100 people enrolled in the Medicaid program would be required to participate in service projects. Participants would have to be physically and mentally capable adults ages 19 to 64 and unemployed. The Florida Legislature reportedly will take up a bill requiring individuals receiving unemployment benefits to provide four-hours of service to charitable nonprofits of their choice. The nonprofits would be required to document the individual’s volunteer time.

Government Contracting Update
Hawai’i Bill Creates Task force
A prompt-payment task force would be created by a bill in the Hawai’i Senate to “examine and resolve issues that prevent state agencies from making prompt payment for goods and services purchased through nonprofit organizations, in particular, human service nonprofit organizations, that deliver pivotal goods and services to individuals, families, and communities.” A seat on the task force is expressly reserved for the Hawai’i Alliance of Nonprofit Organizations, which would serve as one of only two non-governmental representatives on the 12-member panel.

Court Challenges
California: San Francisco is seeking $20 million in property and transfer taxes from the Catholic Church after the local archdiocese transferred 232 properties in 2008 from two of its nonprofit corporations to a third. The city tax assessor claims in court that the separate organizations are separate entities, while the Church argues that the transfers were merely an internal restructuring.
Pennsylvania: The Pennsylvania Supreme Court agreed to decide when a nonprofit must pay taxes on property it owns, but has not yet put to charitable use. The case involves $68,000 in taxes that the city, county, and school district claim from the Pittsburgh Cultural Trust for two vacant downtown buildings. The lower court ruled that long-term ownership of vacant buildings does not entitle the trust to tax exemptions. 

 
United We Stand
Last week, leadership in the North Carolina General Assembly issued instructions for appropriations subcommittees that will develop the state budget for 2011-2013 to develop plans to "eliminate/reduce funds for non-profits." We wholeheartedly endorse the message from the North Carolina Center for Nonprofits about how budget cuts affect the community:

This should be of concern to all nonprofits, regardless of whether you get state funding. Widespread cuts to nonprofits' state grants and contracts would place a greater burden on foundations, businesses, and individual donors to pay for services that nonprofits provide for government. This means less funding for other worthy nonprofits. It's important for you to let your state legislators know the value taxpayers get when they invest in nonprofits. The Center has developed talking points you can use if your nonprofit has a state grant or contract or if it doesn't receive state funding.

Indeed, we are all in this together … for the public good.