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Defend Michigan's Nonprofits: Stop the "SOS" Proposal

If you have not already been approached, you may be approached soon to sign a yellow petition for the “Stop OverSpending” (SOS) proposal. If enough signatures are collected this proposal would be on the ballot this November. Because of the negative impact this proposal would have on nonprofits, those we serve and the resources we protect, the Michigan Nonprofit Association urges you to not sign this petition and to educate others on the impact of this proposal.

WHAT IS “SOS”?

The proposal would put a rigid spending formula into the state’s constitution. This proposal is modeled on Colorado’s so-called “Taxpayers Bill of Rights” (TABOR) that was adopted in 1992 and was recently suspended due to the state’s deteriorating public services and the prospect of more cuts.

 “SOS” would limit growth in government spending to a strict formula of population plus inflation and would require voter approval to override. Essentially, government spending would be so limited that drastic cuts would be made to critical services relied on by all Michigan families.

Click here for a fact sheet on the "SOS" proposal

WHY WOULD “SOS,” OR MICHIGAN'S VERSION OF TABOR, BE WRONG FOR MICHIGAN?

This Michigan version of TABOR is already a proven failure in the only state to have adopted it (Colorado), where voters in November voted to suspend it for five years.

“SOS” would hurt economic development by forcing lawmakers to cut services that are essential for a competitive business environment including education, health care, transportation and public safety.

It won’t solve Michigan’s real problems, such as high unemployment rates and lagging economy. In fact, Colorado's job growth now lags far behind its neighboring states.

Click here for the most recent analysis of this proposal and its impact

WHY SHOULD WE BE CONCERNED?

Michigan voters are currently being asked to sign an initiative petition called “Stop OverSpending” (SOS).  The “SOS” Committee has until July 10 to file 317,757 signatures with the Secretary of State. Pending the Secretary of State’s confirmation that there are enough signatures, the question will be on the ballot in November.

IF GOVERNMENT IS FORCED TO CUT SERVICES WILL NONPROFITS BE ABLE TO FILL THE GAP?

No. Nonprofits partner with government to meet the needs of Michigan families. If government is no longer able to fulfill its role as a partner in providing these services, the nonprofit community would not be able to meet these needs alone.

CAN 501(C)(3) NONPROFITS OPPOSE/SUPPORT A BALLOT MEASURE?

WHAT’S WRONG WITH LIMITING SPENDING TO THE RATE OF INFLATION?

The goods that government buys increase in price far and above the rate of inflation. Unlike families who spend the biggest part of their budgets on things like rent, mortgage payments and groceries where the rate of inflation has been relatively low. But state government spends most of its money on health care and education where costs have been rising much faster than the general rate of inflation.

HOW HAS TABOR WORKED IN COLORADO?

It hasn’t. TABOR is a proven failure. The TABOR concept is wrong in theory and in practice and is a failure in the only state where it exists. Since Colorado enacted TABOR it has severely declined in the areas of economic development, education, industrial infrastructure, social services and health care.  During the past thirteen years under TABOR:

• The state university system is in crisis. State funding for higher education has been slashed by 21% over the past four years, and the University of Colorado has proposed a 26% tuition increase from last year’s level as a result.
• Colorado’s transportation infrastructure is in need of help, marked by “potholes, crumbling bridges and traffic gridlock.”
• Access to prenatal health care has dropped significantly. The percentage of women receiving adequate access to prenatal care has dropped from 23rd to 48th in the nation.
• Children’s health care has suffered. Colorado has gone from ranking 23rd in the nation to 48th in the nation for children receiving their full vaccinations.
• Colorado’s job growth rate lags behind neighboring states.

Frustrated by the condition of their state, Coloradoans successfully voted to suspend and fundamentally change TABOR. The charge to do so was led by a broad-based bi-partisan coalition of elected officials, business leaders, teachers, health care providers and firefighters.

Click here to view the video "The Real Story Behind Tabor" - a 13 minute video highlighting the impact of TABOR in Colorado and why other states should avoid a similar spending limit.

WHAT CAN YOU DO?

Take an official position in opposition to the proposal
Your organization could take a position specifically opposing the “Stop OverSpending” (SOS) proposal or your organization could take a position opposing this type of proposal. The following is a sample position:

"The <insert name of organization> opposes state spending limitation proposals that would hold state spending increases to no more than inflation plus population growth.”

Sign up and take action
Click here to indicate that your organization is willing to disseminate information, help co-sponsor meetings and be part of an email list.

Encourage others not to sign the “SOS” petition
Share information with your networks and encourage them not to sign the petition placing this proposal on the November ballot. It’s important that Michigan residents fully understand the consequences of the “SOS” proposal. The “SOS” Committee has until July 10 to file 317,757 signatures with the Secretary of State.

Provide a presentation to your board on this issue
This presentation could include sharing with your board the fact sheet on this issue, frequently asked questions, and a showing of the video “The Real Story Behind TABOR” which highlights the impact of TABOR in Colorado and the threat it poses in other states.

Include information in your newsletter or e-mail update
The information included could state your organization’s opposition to the proposal, or it could simply provide information regarding the potential impact of SOS in Michigan.

HOW WILL NONPROFITS BE IMPACTED BY "SOS"?

Decreased funding and increased need for services
Under TABOR, Colorado nonprofits saw a significant increase in the need for their services and a decline in funding from government. Many organizations were forced to make difficult cuts in their budgets, decrease programming and eliminate staff. Under “SOS,” Michigan nonprofits would face a similar dilemma. The state and Michigan’s nonprofit community have long been partners in providing health care, education, social services, culture and arts throughout the state. Although the need for the services of food banks, after-school activities, homeless shelters, health care facilities and more would most likely increase under “SOS,” the sector would be unable to fill the void left by decreased government services and funding.

Fundraising challenges
As Colorado decreased its funding of education and public safety, local communities enhanced their fundraising efforts to appeal to individual donors to help fund some of the programs left unfunded by government. The Michigan nonprofit community relies heavily on individual donations. However, there is a limited amount of expendable income that individuals are able to donate to support nonprofits on an annual basis. If individuals are faced with the choice of either giving money to their local school to supply their children with textbooks or to give that same amount of money to a local charity, the local charity might find its fundraising efforts falling short.

Public services at jeopardy
As either owners of property or as tenants, nonprofit organizations rely heavily on local municipalities to provide them with public services. Organizations would have difficulty attracting employees and protecting those that visit or utilize their facilities if trash was not collected on a regular basis, if there were pot holes that ruined visitors’ tires, or if they could not provide a safe place to work or visit because there weren’t enough police or emergency personnel to protect them.