In This Week's Edition of Snapshot...
- Congress Rolls Out Ambitious 200-Day Plan
- President Trump Instates Regulatory Freeze
- International NGOs Face New Restrictions with U.S. Grant Dollars
- In the States: State of the State Addresses 2017
So, What’s Up with Tax Reform?
In the coming months, we will provide weekly updates with new developments in the tax reform process.
Congress Rolls Out Ambitious 200-Day Plan
Speaker Paul Ryan (R-WI) extended an official invitation to President Trump to address a joint session of Congress on February 20th. This invitation keeps with recent tradition, where a similar invitation was extended to former President Obama at the beginning of his tenure in 2009.
In other tax reform news, House and Senate Republicans are gathered in Philadelphia this week for a retreat to introduce and discuss the party’s ambitious 200-day plan for the new Congress. The plan includes rolling back regulations from the Obama administration, repealing and replacing the Affordable Care Act (often referred to as ACA or Obamacare), and overhauling the tax code.
According to Roll Call, “Republicans will plan to use the fiscal 2018 budget reconciliation process to overhaul the tax code by the end of July, members and aides said. [Chris] Collins (R-NY) said the goal was to get the tax code rewrite to the president’s desk before the August recess, but other members and aides were unclear whether the Senate would be able to adhere to that timeline.”
Additionally, Ways & Means Committee member Lynn Jenkins (R-KS) announced that she plans to retire at the end of this Congress in 2018.
For a quick summary of how some of the tax reform proposals would impact our sector, see this article in the Chronicle of Philanthropy.
President Trump Instates Regulatory Freeze
On the first day of his new Administration, President Trump issued an executive order to halt regulations from moving forward in the review process until the newly appointed head of the responsible agency has had time to review and approve the regulation to move forward.
Though questions remain about exactly what this review by the administration will entail, it could have significant implications on forthcoming regulations from the Department of Treasury and IRS—including those on donor advised funds, self-dealing, and international grantmaking.
International NGOs Face New Restrictions on US Grant Dollars
In another wave of executive action, President Trump issued an order that effectively reinstates and significantly expands what has been referred to as the “Mexico City Policy.”
Under previous Republican administrations, this policy prohibited the use of family planning aid distributed from USAID from being used by international NGOs that provide or “actively promote” abortions—including informational activities such as providing counseling information or referrals for abortion procedures.
The new action issued by President Trump expands this policy to prohibit all U.S. federal grant dollars (not just USAID) from going to international NGOs, unless they are certified in agreement to not “support or participate in the management of a program of coercive abortion or involuntary sterilization.”
Exclusive from our colleagues at the National Council of Nonprofits.
Exclusive from our Colleagues at the National Council of Nonprofits.
The advocacy action for the year is coming into clearer focus as governors set their agendas through State of the State addresses. Here are emerging Issues and trends that could affect the work of charitable nonprofits across the country.
- Taxes: Taxes top the list of main issues for governors during their annual speeches. Yet as more than half of the states are facing budget deficits, most of the policy proposals focused on tax cuts rather than increases. Some, including Governor Ricketts in Nebraska, propose major overhauls in property tax. Governor Cuomo in New York plans to work with local governments to expand property tax relief beyond a two-percent cap on increases. More than 650,000 lower-income Arkansans may receive income tax cuts totaling $50 million under Governor Hutchinson’s proposal, which also promises additional cuts in two years. In Maine, the Governor is calling on lawmakers to shift to a flat income tax by 2020, reduce the top individual tax and corporate rates, and eliminate the estate tax in 2018. Tennessee Governor Haslam’s IMPROVE Act would provide several cuts to franchise and excise taxes, resulting in $102 million in tax cuts for a state with a projected $2 billion budget surplus.
- Spending: Recognizing the realities of budget deficits, many governors are proposing additional spending cuts. Vermont Governor Scott is calling for tight limits on spending, while Maine Governor LePage goes further to propose a statutory limitation on spending. In addition to proposing spending cuts to many programs, New Mexico’s Governor is looking to tap accounts with unspent money to “endure this current budget crisis without raising taxes.” Missouri Governor Greitens announced spending cuts to state universities and transportation even though his overall spending plan is not expected until February. Conversely, Nebraska Governor Rickett’s budget seeks to increase spending by an annual average of 1.7 percent.
- Jobs/Employment: Another way governors are reducing costs is through reducing the state workforce. The Governors of Maine and Maryland are proposing to reduce state workforces by 500 and 400 positions, respectively, and North Dakota Governor Burgum suggests a ten percent cut in the number of state workers to “right-size government.” On the other hand, Wisconsin Governor Walker claims the state has more jobs than it can fill and is now shifting his priority from job creation to workforce development.
- ACA/Medicaid: Governors spoke to the uncertainty about the outcome of debates in Washington, DC, over the Affordable Care Act. Idaho Governor Otter is taking a wait-and-see approach on health policy, recognizing that the state impact from changes in the ACA are not yet predictable. Colorado’s Governor Hickenlooper it taking the position that “health care is a right not a privilege” and highlights that 94 percent of Coloradans are covered. Medicaid expansion and providing 640,000 low-income adults with health insurance is a top priority for Michigan Governor Snyder.
- Education: After years of declining support for public education, states may be changing direction. Governors from Arizona and Idaho are calling for increased funding for education and supporting teachers, with Idaho providing 63 percent of its proposed budget to public education. Indiana Governor Holcomb seeks to double the state’s investment in pre-kindergarten, while New York’s Cuomo proposes free public college tuition for some students.