State Legislation & Issues
From CMF's Weekly Download, June 13, 2016
In October our new state budget will go into effect. What does that mean for our state’s most urgent issues? The $54.9 billion state spending plan is getting attention from the social sector as we all work to help the people of Flint and the children in Detroit Public Schools.
Flint Water Crisis
We know $165 million more in aid will support the Flint water crisis but there’s still a long road of recovery ahead. State spending on Flint’s emergency rises to about $235 million under the legislation, which includes $114 million in immediate aid. About $25 million is slated for the installation of new service lines to connect the city’s water mains with homes and other buildings. Flint’s mayor Karen Weaver has said that the money for the pipe replacement is less than half of what is needed. So far, state funding for Flint has gone toward the criminal investigation, child care, emergency needs, and credits on water bills for affected residents. The Governor’s Commission for a 21st Century Infrastructure will spend the coming months looking for new and more sustainable ways to update the state’s aging infrastructure, including water infrastructure. Meanwhile, foundation, nonprofit and business leaders continue to step in to determine the best way to help the families of Flint. Tomorrow foundation and nonprofit leaders will speak to visiting business executives from around the state, as they gauge how the business community can help the city recover.
Detroit Public Schools
The education budget includes $72 million for Detroit Public Schools. Meanwhile, a $617 million bailout plan for the district narrowly passed. Lawmakers in support of the plan said it will pay off the district’s debt and provide transition costs when the district splits into two districts. A Detroit Education Commission to regulate charter schools in Detroit, which was highly contested, did not make it into the final bill package, and the district will return to an elected schoolboard, rather than state appointed, in January.
The Coalition for the Future of Detroit Schoolchildren, formed in late 2014, has led the way in seeking solutions for Detroit children. After the plan was announced, coalition leaders expressed disappointment with the legislation, maintaining it only provides “partial relief to a troubled Detroit schools landscape, and does little to correct the conditions that have led to the financial and academic crisis of Detroit Public Schools.” Tonya Allen, president and CEO of the Skillman Foundation and co-chair of the Coalition, expressed similar sentiment. “We’re tired and disappointed, but we also know the real work ahead requires us to stand up and pull together to get Detroit schoolchildren the education they need. We knew that coming in," Allen said. "That’s why the Coalition formed in the first place. We wish Lansing could’ve helped create a better and more comprehensive solution, but nonetheless, we’re going to make sure Detroit kids get the education they deserve.”
What else is in the budget?
A 1.9 percent funding boost for K-12 education
Expansion of dental coverage to 131,000 teens and young adults in Wayne, Oakland and Kent counties
Increased funding for Community Mental Health
We are hearing from the Michigan League for Public Policy (MLPP) on several aspects of the state budget. Gilda Jacobs, president and CEO of MLPP, expressed concern that funds intended to fix the Heat and Eat policy that reduced food assistance were not included in the approved budget. She also wrote “there was some good news in the final budget bills, including the expansion of Healthy Kids Dental, much-needed funding for Flint to address the ongoing water crisis and an expansion of the state’s child care eligibility from 121 percent of the federal poverty level to 125 percent of the federal poverty level.” Read more from the Michigan League for Public Policy.
Why are so Many Nonprofit Cases at the Michigan Tax Tribunal?
From CMF's Weekly Download, April 18, 2016
Across Michigan, nonprofits are being required to pay taxes on property due to local assessor's interpretations of charitable work.
Many nonprofits (foundations and social service providers alike) assume that 501c(3) status from the IRS automatically provides exemption from local property taxes. The reality is that ultimate judgment on property tax exemption in Michigan is in the hands of local assessors - and the local assessors are charged with interpreting what is often a subjective question: "What is a charitable institution?"
As a result, over the past two years the number of contested nonprofit property tax exemption cases has risen to more than 40 being considered by the Michigan Tax Tribunal. These cases cover all parts of Michigan and a wide diversity of nonprofits, ranging from childcare facilities to assisted living facilities and more.
Most charitable nonprofits do not budget for paying local property taxes, which is resulting in tax bills that are enough to sink an organization. Moreover, the subjective nature of interpretation from assessor to assessor poses bigger questions around clarifying decision making on both the nonprofit and assessor sides. For MNA members that own their own facilities or support nonprofits that own facilities, solving this question is a high priority. While at least three bills have been introduced in Lansing to help solve individual cases, MNA, with the assistance of CMF, has been developing legislation that will provide a comprehensive fix - clarity for both local nonprofits and assessors in making decision on applications for property tax exemption.
Legislation is expected to be introduced later this month with bi-partisan support. But legislation is only part of the solution. CMF and MNA will also be launching a toolkit to help nonprofits explain to local assessors the charitable services they are providing, as well as help inform assessors in evaluating property tax exemption applications.
Currently, local assessors utilize six broad criteria as defined by the Wexford Case, to evaluate property tax exemption.
Michigan Nonprofit Association supports the League of Women Voters Education Fund and the publication of the voters' guide. With the online voters guide you can enter your address to find your polling place, see the races on your ballot, compare candidates' positions side-by-side, and print out a "ballot" indicating your preferences as a reminder and take it with you to the polls on Election Day. There are also resources for military and overseas voters.
Bills we are tracking
Federal Legislation & Issues
Charities Helping Americans Regularly Throughout the Year Act (CHARITY Act S.2750)
Senators John Thune (R-SD) and Ron Wyden (D-OR) today introduced the "Charities Helping Americans Regularly Throughout the Year Act" (CHARITY Act), S.2750.
If enacted, the legislation would:
- Express the sense of the senate that "encouraging charitable giving should be a goal of tax reform," and that Congress should ensure that the value and scope of the federal charitable deduction "is not diminished
- Permit IRA rollovers into donor advised funds and add pay-out and other disclosures for DAFs
- Streamline the foundation excise tax by setting a fixed rate of one percent (unenacted portion of the America Gives More Act)
- Mandate electronic filing of IRS Form 990s, with a delayed effective date for smaller nonprofits with revenues of between $200,000 and $500,000
- Establish an adjustable Volunteer Mileage Rate pegged to rate for medical/moving purposes (currently 19 cents)
- Make a limited exception to the private foundation excess business holding tax for enterprises that donate all profits to charity.
U.S Department of Labor Finalizes New Overtime Rules
The U.S. Department of Labor (DOL) has spent the past year reviewing federal rules for when an employee is eligible for overtime compensation, and new guidelines have now been finalized.
Under the new rules—which will go into effect on December 1, 2016—a full-time, salaried employee earning less than $47,476 per year could now be eligible to receive overtime pay. DOL estimates that 4.2 million workers will be affected by this change.
The nonprofit sector will be affected by this development, and there are several resources available to help:
The White House prepared this video to help explain the change.The Department of Labor has issued Guidance for Non-Profit Organizations on Paying Overtime under the Fair Labor Standards Act (PDF). The National Council of Nonprofits has prepared a summary of the impact on nonprofits and is seeking your input on how this new rule will affect your institution.
Learn more about this issue during two webinars sponsored by our partners at Independent Sector:
Part 1: Questions About Compliance: Officials from DOL’s Wage and Hour Division will provide information on the new overtime statute and how it applies to the nonprofit sector
Part 2: Questions About Implementation: Key nonprofit leaders will provide information and best practices on the new rule.
H.R. 4281, the Charitable Giving Privacy Protection Act
MNA is supporting legislation introduced by Congressmen Keith Rothfus [PA-12] and Brian Higgins [NY-26] that will help protect nonprofits and encourage charitable giving by ensuring that nonprofits are never forced to collect social security numbers when soliciting or accepting donations. This simple, narrowly-crafted bill has been endorsed by groups like Habitat for Humanity and the National Council of Nonprofits, which represents more than 25,000 nonprofit organizations across the country. One-page summary.
Nonprofit Advocacy Matters
The National Council of Nonprofits provides MNA's members access to public policy, training, and education resources at the national level. Nonprofit Advocacy Matters is a bi-weekly newsletter on policy issues affecting the nonprofit sector.Click here to access the most recent issue of Nonprofit Advocacy Matters.