I always love the beginning of a new year and the endless possibilities it opens, particularly when we consider opportunities to enact new policies to support the nonprofit sector. On the afternoon of January 14th, the second half of General Assembly 150 opened and we now pick up where we left off in June 2019, while an election cycle awaits us all in the fall.
At the state level, we will focus on a few things. First, that Grant-in-Aid remains consistently funded. DANA is also focused on meaningful contract reform for nonprofit agencies and the related SB 105 regarding an increase to the minimum wage. There is a desire to raise the minimum wage over time to $15 per hour. While we want our nonprofits’ employees paid fairly, we have concerns over unintended consequences of this measure. This will increase the cost for nonprofits to provide services, subsequently impacting state contracts with many nonprofit service providers. In most cases, these contracts have not been renegotiated in a decade or more. In the fall, we conducted a survey to capture nonprofits’ feedback and that valuable data will inform our communication to policymakers.
Our federal landscape has seen some positive adjustments, as well as troubling issues for our nonprofit community. As many of you know, in 2017, the Tax Cuts and Jobs Act imposed a 21% unrelated business income tax on nonprofits for the expenses when providing transportation fringe benefits to their employees. One year later, the IRS provided guidance on how to calculate the specific tax on parking costs and transit or bus passes. Due to the efforts of our partners at the National Council of Nonprofits, in December 2019, Congress repealed the tax on nonprofit transportation benefits and an effort is underway to help nonprofits recoup the taxes already paid. For more information about this important initiative, please review this article by the National Council of Nonprofits.
Second, of significant concern for the nonprofit sector is proposed regulation changes to the Community Reinvestment Act. The Community Reinvestment Act of 1977 dictates that banks help meet the credit needs of the communities where they are physically located, specifically to serve low-to-moderate income neighborhoods. The federal government is proposing changes to the regulation claiming it will make the “regulatory framework more objective, transparent, consistent, and easy to understand.” However, the proposed regulations may decrease public accountability, while expanding the types of activities that would count as a CRA investment. This could result in less investment into low-to-moderate income communities Comments on the regulation changes are being accepted until March 9th, and may be submitted here.
As always, the team at DANA appreciates the engagement of our members as we move into legislative session! I’m hoping I see you all participating in our Annual Budget Update Webinar on February 3rd, and our Sub-Sector Advocacy opportunities throughout Legislative Session.
If you have questions or would like to discuss policy initiatives that will impact the nonprofit sector please reach out to me at [email protected].