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Information for Policymakers Information for Nonprofits Policy Issues About MNA Public Policy
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Policy PortalIssue#95 STATE NEWS
FEDERAL NEWS
MNA Action Network
The place where you can speak directly to elected officials about the issues affecting the nonprofit sector STATE NEWS Michigan House Appoints Leaders On Wednesday, November 10, House Republicans announced their elected leaders for next year’s session:
In addition, Mr. DeRoche named Rep. David Palsrok (R-Manistee) as chair of a committee that will guide the transition from current House Speaker Rick Johnson to DeRoche. House Democrats held elections for the primary leadership positions on November 4:
Democrats’ elections for lower leadership positions will be held at a later date. The state’s fiscal year 2004-05 general fund budget appropriation process is nearly complete. With the exception of Capital Outlay (HB 5510), which is in Committee, all general fund appropriation bills have been enacted. A brief description of enacted appropriations follows. Figures from FY2003-04 are accurate as of October 7, 2004. For more detailed information on the appropriations, visit the Senate Fiscal Agency Web site. AGRICULTURE – H.B. 5509 (P.A. 353 of 2004) COMMUNITY COLLEGES – S.B. 1062 (P.A. 358 of 2004) COMMUNITY HEALTH – S.B. 1063 (P.A. 349 of 2004) CORRECTIONS – S.B. 1064 (P.A. 345 of 2004) EDUCATION – S.B. 1065 (P.A. 346 of 2004) ENVIRONMENTAL QUALITY – S.B. 1066 (P.A. 350 of 2004) GF Appropriation : $28,671,800, down $24,908,975 or -46.5% from FY03. (No new funding will be provided for polluted land or water resources.) FAMILY INDEPENDENCE AGENCY – H.B. 5516 (P.A. 344 of 2004) GENERAL GOVERNMENT – H.B. 5517 (P.A. 327 of 2004) HIGHER EDUCATION – S.B. 1067 (P.A. 352 of 2004) HISTORY, ARTS, AND LIBRARIES – H.B. 5519 (P.A. 340 of 2004) JUDICIARY – H.B. 5520 (P.A. 339 of 2004) LABOR AND ECONOMIC GROWTH – H.B. 5521 (P.A. 354 of 2004) MILLITARY AND VETERANS AFFAIRS – H.B. 5522 (P.A. 341 of 2004) NATURAL RESOURCES – S.B. 1068 (P.A. 347 of 2004) SCHOOL AID – S.B. 1069 (P.A. 351 of 2004) STATE POLICE – H.B. 5526 (P.A. 348 of 2004) TRANSPORTATION – H.B. 5528 (P.A. 361 of 2004) Revenue Estimating Conference Scheduled for December 3 State Treasurer Jay Rising recently called for a special revenue estimating conference for December 3 to examine the previous and current fiscal year. This conference was requested due to a possible deficit for this fiscal year and differing reports on the shortfall for the next fiscal year. For further information on the state’s budget and revenues, visit the Senate Fiscal Agency’s Web site. Lannoye Predicts General Fund Revenue Shortage From $462 Million State Budget Director Mary Lannoye estimated fiscal year 2005-06 general fund revenues will be between $462 and $892 million short of budget needs. While the State Budget Office emphasized these figures are still estimates, they signal another difficult year for the state’s budget. Lannoye explained the difference between revenues and anticipated spending needs is the result of tax collection decreases and spending increases in Medicaid, corrections, debt services, FIA, Michigan Merit Award costs, and state worker pension costs. For more information, visit the State’s Department of Management and Budget Web site. October Tax Revenues Down, FY2003-04 Likely to Finish in Deficit The Senate Fiscal Agency’s Monthly Revenue Report from October finds that tax revenues totaled $2.3 billion last month, a 3.2% decrease from last year, including adjustments for the new collection schedule of State education property taxes. October’s net income taxes are up slightly (0.8%), but that figure is anticipated to be lower when all refund payments are processed. Compared to last October, sales tax collections fell by 7.6% and single business tax collections are down 15.7%. Tobacco taxes are up 42.6%, reflecting the cigarette and other tobacco products tax rates that went into effect this past June. State education property taxes are up 14.1% from last year, reflecting the new payment schedule. Agency analysts estimate that FY 2003-04 tax collections are $17.1, $140 million below the consensus estimate, though this figure could change by the time the books are closed in December. For further information on October’s Revenue Report, visit the Senate Fiscal Agency’s Web site. Tax Restructuring Put on Hold Until 2005 On Wednesday, November 17, the Department of Treasury announced that changing the state’s business tax will be put on hold until 2005. Though Governor Granholm originally said she wanted to change the Single Business Tax during the lame duck session, the department is still developing a proposal and legislators were reluctant to move on the issue. For further information, visit the Department of Treasury’s Web site. Governor Granholm Appoints New Leaders Since November 3, Governor Granholm has made the following appointments: Collections Practices Board
Commission on Services to the Aging
Board of Examiners in Mortuary Science
Michigan Board of Respiratory Care
For more information on these appointments, visit Governor Granholm’s Appointments Web site. FIA To Be Renamed Department of Human Services On November 12, Governor Granholm issued an executive order that the Family Independence Agency be re-named the Department of Human Services. The change is meant to better represent the department and eliminate some communication problems caused by the old name. If the House and Senate approve, the change will be effective on January 30, 2005. The House and Senate adjourned on Wednesday, November 10. Session will reconvene on Tuesday, November 30, at 10:00 a.m. for the Senate and at 1:00 p.m. for the House. The Legislature’s session schedule for the rest of the year is:
Upcoming scheduled committee meetings can be viewed on the Michigan Legislature’s Committee Meetings Web site. The Senate’s session schedule through June 2005 is available on the Michigan Legislature Web site. MNA’s Advocacy Action Network Sends Notices of Urgent Nonprofit Issues The Advocacy Action Network, an initiative of the Michigan Nonprofit Association, is a vital public policy resource for nonprofit organizations. The Network sends occasional email alerts when an important public policy issue for nonprofits demands immediate action. Past Network alerts have addressed: avoiding potential state budget cuts to revenue sharing, education, and the arts; adding charitable donation tax incentives to the Charitable Giving Act; saving Michigan’s AmeriCorps program from an 85% budget cut; supporting the CARE Act’s tax incentives for charitable giving and other support for nonprofits; simplifying the tax law for charities that lobby; and stopping a permanent repeal of the estate tax. To receive Advocacy Action Network emails, visit the Give Voice Web site. The Michigan Nonprofit Association is hosting a Preparing for Successful Grant Proposals workshop on December 1 and 2. Newcomers and professionals wanting to refresh their skills will learn a disciplined approach to proposal development that turns proposal writers into grant winners. The workshop will provide in-depth discussion and activities on topics including: researching potential funders; budget development; gearing proposals to foundations, corporations and government; and writing between the lines. VisitIndiana University’s Center on Philanthropy Web site for a full course description. Visit MNA’s Conference and Training Web site to register. Contact Mike Corbin at mcorbin@mnaonline.org if you have any questions. Applications for the Emerging Leaders and Executive Leadership Fellows programs are now available on the Michigan Nonprofit Leadership Institute Web site. Emerging Leaders is a six-month program designed to cultivate and support committed, educated, and well-mentored professionals who can rise to the challenge of nonprofit leadership. Executive Leadership Fellows is designed for newer nonprofit executives to address the basic tenets of effective leadership and governance. Applications are due in January 2005. For more information on either program, visit the MNLI Web site or contact Robin Grinnell at robin@mnaonline.org. The Michigan Nonprofit SuperConference will be held June 13, 14, and 15, 2005, at the Hyatt Regency in Dearborn. FEDERAL NEWS Independent Sector Fleshes Out Advisory Panel On November 1, Independent Sector (IS) announced the creation of an eight-member Expert Advisory Group that will advise the new Panel on the Nonprofit Sector, formed by IS at the request of the U.S. Senate Finance Committee. A week later, at its inaugural meeting, the Panel created five Work Groups to assist the Panel’s preparation of recommendations for Congress on improving nonprofit oversight. The Work Groups and their assigned topics are: Financial Accountability and Transparency – disclosure measures, such as reform of Form 990 and 990PF, audits and reviews, and electronic filing of tax returns. Governance and Fiduciary Responsibilities – conflict of interest policies, fundraising, and board size, composition, and compensation. Legal Framework – donor advised funds, investment rules, prevention of self-dealing and other conflicts of interest, and tax regulation. Oversight and Self-Regulation – enforcement and improvement of existing legal standards, and areas best enforced by self-regulation. Small Organizations – special concerns related to administrative expenses, board requirements, disclosure issues, financial audits and reporting, user fees, and supporting organizations. Visit the IS Web site for further information on the Expert Advisory Group or the Work Groups. Visit the MNA Web site for further information on MNA and the Panel on the Nonprofit Sector. IRS Examines Nonprofits for Political Participation Violations The Internal Revenue Service recently created a committee of career civil servants who are experts in the tax-exempt areas to review some sixty nonprofit organizations to determine whether they violated their tax-exempt 501(c)(3) statuses by participating or intervening in a political campaign. Charities, educational institutions, and religious organizations with tax-exempt status are not allowed to, “endorse any candidates, make donations to their campaigns, engage in fund raising, distribute statements, become involved in any other activities that may be beneficial or detrimental to any particular candidate, or encourage people to vote for or against a particular candidate on the basis of nonpartisan criteria.” Tax-exempt organizations that intervene in political activities could lose their tax-exempt status or be required to pay a tax. Visit the IRS Web site’s Newsroom for further information on the current investigations. IRS Revises Application for Exemption to Improve Nonprofit Oversight On November 1, the Internal Revenue Service released the revised Form 1023, Application for Exemption Under Section 501(c)(3), the application for charitable organizations seeking tax-exempt status. The revised form is purported to streamline the application process and help the IRS spot potential fraud. The new application is longer and requires more information from applicants, but is also supposed to be easier to use and require less follow-up from the IRS. Changes to the application were based on recommendations from tax-exempt organizations, the public, and a customer satisfaction survey conducted by the IRS. The revised Form 1023 and instructions are available on the IRS Web site. Nonprofits Challenge CFC Watch List Requirement On November 10, the American Civil Liberties Union (ACLU) filed a lawsuit in the U.S. District Court ( District of Columbia) against the Office of Personnel Management’s Combined Federal Campaign (CFC) requirement that all participating charities check their employees and expenditures against several government watch lists for terrorist activities. The CFC is an annual fund-raising drive by federal government employees that benefits nonprofit charities. The suit, sponsored by the ACLU and a coalition of nonprofits that oppose CFC guidelines, claims that the government did not follow correct procedures in instituting the policy, that the policy is vague and misleading, and that it violates the First and Fifth Amendments of the Constitution. A statement released by the ACLU claims that watch lists are not error-proof, don’t allow individuals to correct possible errors, and threaten employees’ privacy. For more information on the CFC, visit the OPM’s CFC Web site. Council on Foundations Offers Stewardship Principles The Council on Foundations ( COF) recently released new ethical guidelines for family and corporate charitable funds, partly in response to more intense scrutiny of federal and state regulators. Both “Stewardship Principles for Family Foundations” and “Stewardship Principles for Corporate Foundations” are available on COF’s Web site. IRS Seeks Applications for TE/GE Advisory Committee The Internal Revenue Service is now accepting applications for vacancies on the Advisory Committee on Tax Exempt and Government Entities (ACT), a venue for public input into critical tax administration areas. The available positions are: Employee Plans – two vacancies Exempt Organizations – two vacancies Federal, State, and Local Governments – one vacancy Tax Exempt Bonds – one vacancy Members of ACT are appointed by the secretary of the Treasury and serve two year terms. Visit the IRS Web site for more information on ACT and an application. Both the House and the Senate reconvened this week to finish a lame duck session. The Senate’s tentative 2005 legislative schedule is available on the Senate’s Web site. |
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