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Legislative Activity: Operating Budget, Grant-in-Aid, and Charitable Tax Deduction

As we make our way through June, legislative activity becomes chaotic.  Bills tend to move with rapid pace between the House and the Senate, while financial decisions for the Budget bill, Bond bill and Grant-in-Aid are finalized.  With slightly more than 2 weeks left in legislative session, DANA is tracking several bills on behalf of the sector.

FY19 Budget Bill
The finalized budget bill, SB 235, was introduced on June 12, 2018.  Unlike our experience last year, this gives legislators plenty of time to review the bill.  This is a relief to everyone engaged in the process.

Grant-in-Aid Bill Update
The Grant-in-Aid bill has not yet been crafted.  The Joint Finance Committee members were given Grant-in-Aid applications to review last week.  JFC is scheduled to meet on June 26, 2018 and we anticipate Grant-in-Aid will be a topic of discussion as the FY 19 Budget bill has been finalized.  One possible reason for the delay is that DEFAC will meet on Monday, June 18, 2018 to review and confirm projected revenues for the year.  Given that Grant-in-Aid funds are still unresolved now is the time for us all to step up our advocacy engagement as a sector. Please take the time to call your legislator, and ask your constituents to call as well, to reinforce the need for the full reinstatement of Grant-in-Aid funds.

  • If you do not already know who your legislators are, please go here and use the Find My Legislator tool and type your address.  This will help you determine your Senator and Representative.  Please note that you could visit legislators that represent neighboring districts because you likely serve their constituents.
  • Contact your legislators via email or by phone.  You can call the main number and ask to speak to their legislative aide.
      • Senate Democratic Caucus: Wilmington Reception (302) 577-8744/Dover Reception (302) 744-4286
      • Senate Republican Caucus: Wilmington Office (302) 577-8714 / Dover Office (302) 744-4048
      • House Democratic Caucus:  Wilmington (302) 577-8476 / Dover (302) 744-4351 / Georgetown (302) 259-7108
      • House Republican Caucus: Wilmington Reception (302) 577-8723/Dover Reception (302) 744-4171/Georgetown Reception (302) 259-7111

Budget Smoothing Measure Introduced
Last week, HB 460, based on the Executive Summary by the Advisory Panel to DEFAC on Fiscal Controls and Budget Smoothing, was released.  Within the recommendations of the report there is an indication that there should be adjustments made to tax policy to eliminate itemized deductions, to include the charitable gift deduction.  While the federal tax reform changes to the standardized deductions disincentivizing charitable giving, our Delaware nonprofits need this to continue to raise funds. The elimination of deductions is not included in this legislation; however, we expect to see it come up next year.

Federal Update: The Johnson Amendment
Finally, while many of us are focused on the activity at the state level, there has been action on the Johnson Amendment at the federal level.  As a refresher, the Johnson Amendment restricts 501(c)(3) organizations from supporting or opposing  candidates for elected office.  This means that contributions made to nonprofits that are tax deductible may not be used to support campaigns.

We have noted that there was an attempt to include a rollback of the Johnson Amendment in the federal spending bill last year and now it has reappeared in the FSGG spending bill.  If you’d like more information, please take a look at our national affiliate, The National Council of Nonprofits Fact Sheet.

We will continue to monitor the developments within the legislature and continue to update through this blog and the DANA twitter feed.  Should you have specific questions please contact me at [email protected].