In This Week's Edition of Snapshot...
- Federal Budget Talks Hitting Headwinds
- But Will Tax Extenders Make It by Year’s End
- Bi-Partisan Agreement in Senate Reached On Funding For Historically Black Colleges And Universities
- Way and Means Committee Continues Discussions About the Salt Cap
- Nonprofit Organizations Still Hoping for Relief From UBIT
- Exeutive and Regulatory News
- Happening in the States
Federal Budget Talks Hitting Headwinds
Top appropriators are struggling this week to cut through some of the difficult issues impeding a breakthrough on government funding. There is still some hope that Congress can clear all 12 spending bills before federal money dries up on Dec. 20. Border wall construction funding is still the main sticking point.
White House officials have long cautioned that President Trump might refuse to sign spending bills until a deal is struck to increase funding for the border wall in the Department of Homeland Security’s budget. If he does so, all federal agencies could be stuck with a spending patch through the end of the fiscal year. However, lawmakers appear to be wary of risking lapses and stopgaps for the agencies not covered under the first measures to make it into law, remembering the 35-day shutdown that began just before Christmas last year.
Inaction until next week will only increase the pressure on the appropriators to figure out the way forward.
But Will Tax Extenders Make It by Year’s End
Negotiations over a year-end tax package — which would potentially include tax extenders, tax law fixes, and the retirement security bill already passed by the House — aren't proceeding with any real vigor, according to various political reporters in Washington. While there is time for something to come together — the government funding deadline is still a bit over two weeks away -- Democrats and Republicans need to bridge their differences soon to get a tax bill on a year-end spending package. But in a sign of where things stand currently, lawmakers and lobbyists are already starting to float the idea that debate over current tax issues could get pushed back even further, into February or March.
The Senate passed a bipartisan deal on Thursday to revive expired funding for historically black colleges that also includes legislation to make it easier for families to apply for federal financial aid and income-based loan repayment programs. The legislation permanently reauthorizes more than $250 million in annual mandatory funding for HBCUs and other minority-serving institutions.
Senate Health, Education, Labor, and Pensions (HELP) Chairman Lamar Alexander (R-TN) expressed hope that the bill is something the House can accept and pass since he worked with House leaders on it. The measure needs the approval of both the Education and Labor Committee as well as the Ways and Means Committee in the House.
Democrats on the House Ways and Means Committee plan to mark up a bill next week that takes aim at the federal cap on state and local tax deductions (SALT) — though such legislation would have dim prospects in the Senate. The cap on state and local deductions was put in place by the Tax Cuts and Jobs Act, H.R. 1 (115). While there is support to scrap the provision totally, the Chair of the Committee Richard Neal (D-MA) cautioned that Democrats could just raise the cap temporarily.
PoliticoPro reported this week that the internal Democratic negotiations over that SALT measure have drifted in recent weeks away from a permanent repeal of the cap and toward more temporary relief. In any event, whatever SALT measure Democrats have looks likely to get a floor vote by year's end.
National associations representing a broad swath of American nonprofit organizations are still hoping for action before the end of the year for repeal of Internal Revenue Code Section 512(a)(7) – the 21-percent unrelated business income tax (UBIT) on transportation fringe benefits that tax-exempt organizations provide to employees. They continue to urge their members to contact Senate leadership, Majority Leader Sen. Mitch McConnell (R-KY) and Minority Leader Chuck Schumer (D-NY), to share the examples of how this tax impacts the nonprofit sector.
The tax has proved costly and excessively burdensome for charitable organizations because it unfairly diverts critical funds and resources normally dedicated to providing social and community services. Due to continued lack of clarity from Treasury, calculation of the tax is challenging for many first-time filers.
Repeal language could be included in several legislative vehicle before the end of the year, including in any forthcoming tax legislation, appropriations measure or continuing resolution. Also, multiple bipartisan bills have been introduced in both chambers, such as the Lessen Impediments from Taxes (LIFT) for Charities Act of 2019 (H.R. 1545 / S. 632) and the Preserve Charities and Houses of Worship Act of 2019 (S. 1282).
Department of Commerce
National Telecommunications and Information Administration National
The (NTIA) launched a new Minority Broadband Initiative (MBI) focused on solving broadband deployment challenges in vulnerable communities. The program seeks to ensure that Historically Black Colleges and Universities (HBCUs) can successfully advance broadband connectivity on their campuses and in their surrounding communities, enabling the participation of all Americans in the digital economy.
Bureau of Economic Analysis
The Bureau announced it will make available starting December 12 a new analytic tool showing the annual gross domestic product (GDP) for more than 3,000 counties across the nation. Users will be able to compare a county’s GDP growth and personal income with other counties, states, and the nation. The new information will complement currently available county incomes statistics.
The U.S. 2020 Census Bureau PSA Toolkit is available for stakeholders and partners to have the tools they need to engage their communities.
Appalachian Regional Commission
The ARC has a webpage that illustrates data and resources on how they are addressing the substance abuse crisis in Appalachia. Included are an overdose mapping tool, information on their investments in coal-impacted communities, and health disparities reports, among other informational items.
Department of Education
The Trump administration proposed Tuesday to break off the nearly $1.5 trillion federal student loan portfolio from the Education Department for management by a new independent federal agency.
Education Secretary Betsy DeVos pitched the proposal for federal student loans to be operated by "a stand-alone government corporation, run by a professional, expert and apolitical board of governors," instead of by the department's Office of Federal Student Aid.
But given the "chilly reception" from House Education and Labor Chairman Bobby Scott (D-Va.), it is likely to be a heavy lift in the coming legislative year. Congress would have to change the law in order to separate the Office of Federal Student Aid from the Education Department and make it a stand-alone entity.
Department of Agriculture
On Wednesday, the USDA announced it is finalizing its rulemaking about the conditions under which USDA would waive, when requested by States, the able-bodied adult without dependents (ABAWD) time limit in areas that have an unemployment rate of over 10 percent or a lack of sufficient jobs. The work requirement was initially enacted as part of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA). The new rule is set to take effect April 1,2020. About 750,000 individuals are likely to be dropped from eligibility. Administration officials say that the new rule will not affect children and their parents, those over 50 years of age, or people with disabilities or pregnant women.
Census 2020 Resources in the States Highlight Efforts to Count All Kids
Count All Kids announced new blogs highlighting actions in several states that can provide useful approaches to implement in other states as well. VOICES for Alabama’s Children highlights their Census count activities, including a statewide Count All Kids Committee; a new blog on New York highlights what state agencies are doing there; and a blog about how Connecticut was able to secure some funding for their state’s Complete Count Committee even at this late date.
Exclusive from our Colleagues at the National Council of Nonprofits
Census Spending Ramps Up
Twenty-six states have appropriated funds – nearly $350 million – to pay for outreach efforts in preparation for the 2020 Census. Most of that funding was allotted by California, which has appropriated $187 million, roughly $4.73 per resident. New York is a distant second with $60 million, or $3.07 per resident, provided to educate and promote completion of the census questionnaire as well as targeting efforts for hard-to-count communities. Meanwhile, five states – Florida, Louisiana, Nebraska, South Dakota, and Texas – have failed to even appoint an entity to organize statewide efforts to encourage people to participate in the census.
Data demonstrate that states and localities can suffer significant financial losses when undercounts occur. An updated report by George Washington University calculates $1.5 trillion in federal funding was distributed in 2017 using census-derived data. Federal funds disbursed through Medicare, Medicaid, Community Development Block Grants, Temporary Assistance for Needy Families (TANF), and the Supplemental Nutrition Assistance Program (SNAP, commonly referred to as food stamps) all rely on census data. The affected programs, funded based on census data, often impact the work of many foundations and charitable nonprofits. These include education (early childhood assistance, school breakfasts, Direct Student Loans, Pell Grants), social justice (Crime Victim Assistance, Social Services Block Grant, Homeland Security Grant Program), housing (Section 8 Housing Choice Vouchers, Public Housing Capital Fund, Public and Indian Housing), and workforce development (vocational rehab, community facilitation, WIOA youth and adult activities, Native American employment and training). Foundations and nonprofits in communities throughout the United States are engaging in census outreach efforts to ensure a fair, accurate, and complete count.
North Carolina Lawmakers Promote Disaster Relief
Last month, North Carolina enacted a law providing funding for ongoing hurricane recovery efforts in many parts of the state. One provision requires nonprofits receiving disaster relief and recovery funds from the state to also attempt to find other funding sources, including insurance policies, federal funds, and private donations, to cover their losses from these hurricanes. Additionally, the bill includes $250,000 in state funding per year for the statewide 2-1-1 system operated by the United Way of North Carolina and a $15 million grant to the Golden LEAF Foundation to provide grants to 501(c)(3) charitable nonprofits and local governments to repair, replace, construct, or improve infrastructure or equipment damaged by previous hurricanes or to improve infrastructure to prevent damage in future storms. The North Carolina Center for Nonprofits supported the bill and also helped lead efforts at the federal level to provide recommendations to Congress for disaster relief and recovery to support the work of charitable nonprofits.