In the next several days the Delaware General Assembly will be making important decisions regarding sources of revenue increases, and levels of spending on education, health and human services, infrastructure, and economic impact drivers.  Passing a state budget with the sizeable budget gap will impact every nonprofit in the state.  There are several legislative actions that are being considered which can impact nonprofits:

• Minimum wage increase – consideration is being given to raise the minimum wage in increments to $10.25, with some discussion of moving the wage to $15.00.  DANA hears from its members that they support increasing the minimum wage to improve conditions for their clients and employees.  However, without increasing funding to pay for those higher wages, nonprofits would need to curtail services to offset the increased cost.  More deliberation will be held and we will let you know when the public hearing takes place.  We encourage you to share with your legislators the implications of this wage increase.

• State Charitable Gift Deduction – the proposed HB240 will eliminate itemized deductions, which would include the charitable gift deduction.  DANA learned that in other states which capped or eliminated the charitable gift deduction, donations declined – particularly with high wealth donors.  Charlie Vincent, President of Innovincent, drafted this analysis on the impact.  We urge our members to speak up about the implications of losing this incentive to give to charitable causes.  DANA has set up a draft letter which can be personalized and sent to your representative and senator. A hearing on HB 240 is scheduled for Wednesday, June 21st at 3:00 pm, and we encourage you to attend. If you wish to speak, please plan on no more than 2 minutes to get your message across.

• Budget Gap Closure – DEFAC, which provides the General Assembly projections on revenue increased its forecast from May.  This is good news, in that the budget gap for fiscal 2018 is slightly smaller.  Currently, around $80 million in expenditure reductions have been recommended by the Joint Finance Committee. And around $116 million in new revenue through corporate franchise tax has been passed. That leaves a little more than $200 million in either new revenue or expenditure cuts to decide on before June 30th.  There are several revenue solutions being proposed such as changes to the personal income tax, alcohol and tobacco/vape taxes.  Collectively though, if passed, DANA estimates an additional $100 million in expenditure cuts or additional revenue solutions will be required to close the budget gap.

With so much at stake, it is anticipated that our legislators will wrestle with how to close this through the night on June 30th.  Therefore, it is more important than ever to continue to speak up, share your concerns and aspirations regarding these issues.  And be aware of the implications to your clients, should funding to your services be reduced.