In This Week's Edition of Snapshot…
- President Trump Declared National Emergency
- Rep. Davis Introduced Universal Charitable Giving Bill
- Rep. Clyburn Introduced Bill to Repeal Fringe Benefits
- Supreme Court Will Hear Case on Census Citizenship Question
- States Consider Preserving, Expanding Charitable Giving Incentives
- States Clarifying Spending Priorities
Last Thursday, Congress passed a bill to keep the Homeland Security, State, Agriculture and Commerce departments, along with other government agencies funded through Sept 30. President Trump signed the bipartisan bill, which included $1.38 billion for 55 miles of physical barriers along the U.S.-Mexico border, falling short of the $5.7 billion he had requested.
On Friday, with the shutdown averted , President Trump declared a national emergency over border security. This declaration would allow the President to bypass Congress by diverting $6.7 billion from military and other government accounts to pay for additional barriers along the southern border, The Wall Street Journal reported. On President’s Day, 16 states filed a federal lawsuit challenging the national emergency declaration.
Tomorrow, Democrats in the House plan to introduce legislation to terminate President Trump’s emergency declaration. Speaker Nancy Pelosi (D-CA) sent a letter on Wednesday to all Members of Congress asking them to cosponsor the Rep. Joaquin Castro (D-TX) privilege resolution on the declaration. If Democrats in the House put the measure up for a vote, it would pass easily, followed by an immediate vote on the Senate floor. This would likely force Republicans in both chambers to take a stand on the President’s executive power.
Last Thursday, Rep. Danny Davis (D-IL) introduced an universal charitable deduction bill, H.R. 1260. This legislation would enact a clean, uncapped, above-the-line charitable deduction—expanding the opportunity to claim the charitable deduction to the many taxpayers who claim the standard deduction. This bill takes a critical step towards mitigating the negative impacts of tax reform on charitable giving.
Last week, Majority Whip James Clyburn (D-SC) introduced the Tax Hike on Charities and Places of Worship Act, H.R.1223. This bill would repeal the unrelated income tax provision (UBIT) related to fringe benefits enacted during the 2017 tax overhaul. The provision requires tax-exempt organizations to pay 21 percent UBIT on the value of certain fringe benefits provided to employees—such as transportation benefits.
In a statement, Rep. Clyburn said, “Just as our country’s history is steeped in volunteerism and philanthropy to aid the less fortunate, so too is our tax code, giving tax-exempt status to organizations working to improve our communities... Congress must repeal this new tax, and we should do so without adding another dime to the debt or an additional burden on America’s working families.”
Last Friday, the Supreme Court announced it will take the case about Trump administration’s plan to add a citizenship question to the 2020 Census. The higher court decided to review a district court ruling issued last month by Judge Jesse Furman of the U.S. District Court of the Southern District of New York, who erred in prohibiting Secretary Wilbur Ross from including the question in the census. Arguments about the case will be heard during the second week of April, The Hill reported.
The Supreme Court is taking the case after Solicitor General Noel Francisco requested the court to review Judge Furman’s ruling. New York and 17 other states, along with 16 municipal governments and the U.S. Conference of Mayors, are fighting the inclusion of the question. They argued in court briefs that Furman’s decision was correctly decided but said if the justices think a review is warranted, then it should happen as soon as possible.
Exclusive from our colleagues at the National Council of Nonprofits.
Despite challenges at the federal and state levels, nonprofits and lawmakers in several states are working to preserve existing and promote new charitable giving incentives. Maryland and Minnesota have joined Kansas, New York, and Virginia in considering legislation to allow individuals to elect to itemize charitable contributions as deductions on their state tax filings regardless of whether they elected to itemize on their federal tax filings. Legislation in Arizona would establish a non-itemizer charitable deduction, retroactive to 2018. In Hawai`i, legislation has been introduced to decouple state law from the federal unrelated business income tax on nonprofit transportation benefits, and thus cancel an automatic tax hike for nonprofits. A bill in Pennsylvania would provide an inheritance tax exemption for transfers of property to or for the use of charitable purposes. The New York Assembly will consider legislation to grant a tax credit for volunteering 25 hours or more per year at certain charitable nonprofit organizations in the state.
Based on State of the State speeches and early legislative action, governors and legislators consider education and tax policy to be their top priorities this year. Governors in Georgia, Pennsylvania, and South Carolina want to bolster teacher salaries; California Governor Newsom and Colorado Governor Polis are focusing on early education. Iowa Governor Reynolds proposes using a $185 million budget surplus to increase government spending on education and other priorities.
Governors in Florida, Maryland, and South Carolina are looking to various tax cuts and additional tax reform, while key legislators in New Mexico and Utah are considering their own tax policy changes. Arkansas Governor Hutchinson recently signed into law his $97 million proposal to cut the top tax rate to 5.9 percent despite January revenues coming in 5 percent lower than a year ago. The three top Texas lawmakers – Governor, Lieutenant Governor, and House Speaker – agreed early to a 2.5 percent cap on property tax hikes by localities, including school districts, making increased education at the local level more difficult. Finally, many states will likely see boosts in rainy day funds and municipal spending this year.