Policy Update & Call to Action

Policy Update & Call to Action: Inform Our State's Senators, Charitable Giving Incentives Matter to Nonprofits      On June 27, Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Orrin Hatch (R-UT) sent a  letter informing senators that the Committee will start consideration of a tax reform package with a "blank slate," meaning that it contains no deductions or credits, so Senators will have to fight to get their favored tax provisions re-inserted into the bill that is being drafted. The Committee leaders stressed that the legislation they are drafting on a bi-partisan basis will restore only those deductions, exclusions, credits, and other tax expenditures that: Help grow the economy Make tax laws fairer Effectively promote other policy objectives They've asked Senators to submit recommendations for provisions that meet these standards by July 26.    We are hearing that Senators are responding to the request for input with mixed views. Some may be submitting a list of priority tax provisions; others will likely provide a set of guiding principles for the Committee to follow; and still others apparently are refusing to send in anything out of fear that their submission will be made public. Virtually every lobbyist and interest group is clamoring for the attention of Finance Committee leaders, members, and staff. Some efforts to get their attention include submitting a sign-on letter and sending letters making the case for tax provision that affect their operations. NYCON has also taken steps in writing a letter to submit to the Senate Finance Committee for this "Blank Slate." We encourage members and nonprofits statewide to write your own letters to inform the Senate Finance Committee. Please feel free to use our letter as a template to model your own or weigh in as constituentsabout your work and the importance of the charitable giving incentive to your ability to solve problems in their communities share your stories with the National Council of Nonprofits Your stories will help us make clear to federal policy makers that the charitable giving incentive is unique from other tax deductions and credits and must be preserved in tax reform As always, thank you for your continued involvement with NYCON and for the tremendous work you are doing to make our communities strong and vibrant places to live and work. We truly appreciate your dedication and commitment. If you have any questions about this or any other public policy issue, please feel free to contact me. We look forward to working with you on these important issues.              Sincerely,               Doug Sauer, CEO             New York Council of Nonprofits, Inc.    The Charitable Giving Incentive   Federal tax law currently encourages individuals to give to charitable organizations whose missions they support by providing an itemized deduction. Policymakers in Washington are focusing on how to reduce the federal budget deficit through spending cuts, entitlement reforms, and changes to the tax code. The President, Senators, Representatives, bi-partisan commissions, and think tanks have all put forward plans to address these issues, and many propose changing the charitable giving incentive in one way or another. No one knows the true impact that any of these proposals will have on the ability of charitable nonprofits to raise the resources needed to provide the programs and services that fulfill their missions. It is imperative that Congress make no changes to the charitable deduction that threatens the ability of nonprofit organizations to serve those most in need and to continue to strengthen our communities. Proud Member of  the National Council of Nonprofits

Broker News

Patient-Centered Outcomes Research Tax Update

The Patient-Centered Outcomes Research Tax, also known as the Comparative Effectiveness Research Fee, is a fee paid to the government to fund Patient-Centered Outcomes Research Institute (PCORI) research. One of the main goals of the Patient Protection and Affordable Care Act (PPACA) is to foster a healthier population through improvements to the health care system.
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W-2 Reporting Requirement for Employers Update

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Did You Know...You Can Get Dedicated Client Consulting Through the New Blue Honors Program?

If your agency qualifies for the Blue Honors program, you will be eligible to utilize Excellus BlueCross BlueShield's Information Connection. Information Connection is an online tool that allows brokers to pull specific information, whether it be by book of business or individual groups.
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Creditable Drug Coverage and Medicare Part D – What It Means to Employer Groups

Creditable coverage is non-Medicare Part D prescription drug coverage that is at least as good as (i.e., pays, on average, as much as or more than) standard Medicare Part D prescription drug coverage. When a person becomes eligible for Medicare Part D, they must maintain creditable drug coverage, and not have a break in coverage for 63 or more days.
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Excellus BCBS Awards Hospitals $26 Million for Quality Improvements

Fifty-four upstate New York hospitals and health centers last year earned $26 million in quality improvement incentive payments from Excellus BlueCross BlueShield as part of their Hospital Performance Incentive Program (HPIP). In the past nine years, quality performance incentives from Excellus BCBS have exceeded $145 million.
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Neighbors Helping Neighbors Build Healthier Communities – Learn More About Our Service to the Community

Neighbors Helping Neighbors Build Healthier Communities - 2012 Annual Report of Caring tells how we collaborate with other nonprofits, providers and government and civic agencies to make a difference where we work and live.
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N.Y. cities seek revenue sources other than property taxes

ALBANY — If Syracuse raises property taxes 1 percent, the city would get about $300,000 in revenue. Its pension bill is rising by $15 million next year.

If the city of Rochester raised property taxes to its constitutional limit, it would bring in $32 million in additional revenue. That would only be enough to cover the city’s budget deficit for next year.

While much of the focus of upstate cities’ financial problems have been on rising costs for pensions and health care, they are dealing with just as many problems on the revenue side of their ledgers.

“There has been a fundamental change in these places,” Rochester Mayor Thomas Richards said. “That fundamental change means that we just can no longer generate enough revenue to pay our expenses.”

Property taxes and state aid are cities’ main revenue sources. But a dwindling manufacturing sector, a glut of vacant properties and growing poverty have made property taxes a less reliable foundation for their budgets.

“Either with abandoned properties or tax-exempt properties, you can get just so much out of the folks who are still able to pay taxes,” Comptroller Thomas DiNapoli said.

Yonkers, which has property values four times higher than the average of other upstate New York cities, has also struggled with revenue. Property values declined 24 percent from 2008 to 2011 in Yonkers, a report Tuesday from DiNapoli found.

Yonkers Mayor Mike Spano said last month that the city’s sales-tax revenue has increased in recent years, and there is some positive economic development. But it hasn’t made up for growing costs. He wants a state task force to look at cities’ problems.

“We still need to address the core issues that are facing cities,” he said after a budget hearing in Albany. “They will not be able to tax their way, cut their way nor borrow their way out of their issues. There needs to be a new matrix put in place.”

Last month, Moody’s Investors Services downgraded Binghamton’s credit rating and said it could take further steps against the city, citing its fiscal woes and diminishing tax base.

Comptroller Thomas P. DiNapoli's Weekly News

Comptroller Thomas P. DiNapoli's Weekly News

DiNapoli: Municipalities Should Ensure Background Checks For Youth Program Workers

Local governments could do more to conduct background checks on individuals working in municipal youth program services, according to an audit released Friday by New York State Comptroller Thomas P. DiNapoli.

DiNapoli Approves Terms of $3.14 Billion Tappan Zee Bridge Contract

State Comptroller Thomas P. DiNapoli last Friday announced he has approved a $3.14 billion contract between the state Thruway Authority and Tappan Zee Constructors to design and build the new Tappan Zee bridge.

Officers of Albany Nanotech Complex Safeguarding Public Funds

Fuller Road Management Corp., the not for profit corporation that runs the State University at Albany’s College of Nanoscale Science and Engineering, is fulfilling its duties to support and provide appropriate internal controls over operations and activities, and promoted an ethical business climate at the multi–billion dollar facility, according to a report released Friday by State Comptroller Thomas P. DiNapoli.

DiNapoli: State Tax Revenues Up, But Still Lag Projections

Tax collections through December totaling $46.4 billion were $48.3 million below the state’s latest estimates and $685.3 million below initial estimates in April. Higher than anticipated personal income tax collections in December likely reflect income paid before federal tax increases take effect in 2013 for high income taxpayers, New York State Comptroller Thomas P. DiNapoli said last week in releasing the December cash report.

Comptroller DiNapoli Releases Municipal Audits

New York State Comptroller Thomas P. DiNapoli Thursday announced his office completed audits of:
the City of Beacon; the Midway Fire District; the Niagara Falls Housing Authority; the Orleans County; the Town of Otto; and, the Village of Spring Valley.

Fiscal Cliff Campaign Update

Countdown to Tax Hikes: 22 Days

Countdown to Arbitrary Spending Cuts (sequestration): 24 Days

Need to Know: (action items in this message)

In this message we’re sharing several media ideas and tools that have been developed and utilized within the network. Please take a look, take action today, and tell us what you’re doing (so that everyone will benefit).

I. Big Picture

The media are reporting that momentum is building for Republicans to agree to a tax-rate increase of some level for upper-income taxpayers, which is President Obama’s top priority. There is also growing speculation that Democratic opposition is lessening on some entitlement reforms, such as raising the age for Medicare eligibility from 65 to 67, and changing the index used for calculating inflation for Social Security payments. The oft-quoted mantra for congressional negotiations is that “nothing is agreed to until everything is agreed to,” so no details are close to being final.

Yesterday, Senators Schumer (D-NY) and Menendez (D-NJ) introduced the “Hurricane Sandy and National Disaster Tax Relief Act” that, among other things, lifts the current cap on charitable giving (50 percent of Adjusted Gross Income) for qualified disaster contributions. Once again, policymakers are relying on incentives for giving to alleviate suffering and expedite recovery in their communities.

Tomorrow (Wednesday, 12/12 @ 3:30 – 4:30 Eastern), BoardSource is hosting a webinar on “The Fiscal Cliff’s Twin Threats Against the Work of Charities,” during which we will be sharing our message about how two parts of the fiscal cliff threaten to create massive new burdens on nonprofits and even more work for board leaders. By making funding cuts without reducing the underlying human needs, the demand on nonprofits will increase whilethe resources for providing needed services will decrease. Capping or limiting the value of charitable deductions will further reduce the ability of charitable organizations to meet the increasing need for services. You can share this with your board members and others so they join more than 350 already signed up to learn why they should raise voices. 

Register now to learn more about these potentially devastating threats and what each of us can do NOW to voice our views.  

Also tomorrow (Wednesday, 12/12 @ 1:00-2:00 pm Eastern), several national nonprofits are hosting a conference call on the charitable giving incentive. Speakers include Fr. Larry Snyder of Catholic Charities USA, Diana Aviv of Independent Sector, and Rand Wentworth of the Land Trust Alliance, among others. The call-in number is  712-432-7300: access code 57668#.

II. Network Status Update (Let Tammie Smith know what you’ve done lately)

• Letter to Congressional Delegations: 16 (of 42 State Associations/Nonprofit Allies)
• Action Alerts: 34 (of 42 State Associations/Nonprofit Allies)

• Number of Alerts: 44 (10 State Associations/Nonprofit Allies have sent 2 action alerts)
• NOTE: If you want us to send an Action Alert for you, we can. Just let us know.

• Media Outreach: 7 State Associations/Nonprofit Allies (13 contacts)

• Social Media: 17 Facebook postings

III. Good Ideas

As powerful as our individual stories are, letters and phone calls to policymakers alone will not carry the day. We need the help, engagement, and attention of the news media in the home towns of the elected officials. We offer the following ideas from around the network with the goal of getting rank-and-file Senators and Representatives to tell their leaders: “I’m taking a lot of heat back home; you’ve got to prevent these arbitrary cuts and refuse to cap or limit the charitable deduction””

• Targeted Joint Statements: Last week, leaders of 11 Catholic human service agencies in the Cincinnati area issued a joint statement calling on federal leaders to protect the poor and vulnerable there and abroad in fiscal cliff negotiations. The Cincinnati Enquirer picked up the story and informed all of Speaker John Boehner’s constituents of the potential local impact of the automatic cuts if he doesn’t reach a deal to avert the fiscal cliff.

• Footnote to this story: Our colleague Beth Bowsky, who lives in Cincinnati, had previously shared with the Enquirer the network’s media statement and other materials, perhaps helping to lay the groundwork for the reporter’s interest prior to his receiving the local story from the Archdiocese.

• Media Statements: Several State Association leaders have issued comments to the press or talked with reporters as they prepare stories. The National Council of Nonprofits issued a Media Statementlast week – intentionally designed as a background piece rather than the usual news release. The Statement provides a summary of the broader context, all designed to garner the attention of editors for the issues presented.
• Editorial Board Meetings: Jim White, the new Executive Director for the Nonprofit Association of Oregon, participated in an editorial board meeting at the largest newspaper in the state along with two other nonprofit leaders. They addressed the questions raised, and, through excellent pre-meeting planning, covered all of the key points they wanted to make – using facts, stories, and obvious passion for the community.
• Divvying Up the State: Yes, we want every State Association to be seen as the leader on this issue in the state; but we all know that the local angle is usually the first interest for editorial boards. TheNorth Carolina Center for Nonprofits solved this problem by preparing and sharing materials for their geographically diverse board members to submit to their local news outlets. This week, the Center is following up with any uncovered media markets to ensure that the whole state is covered.
• Tools You Can Use: By all means, take the materials we’ve prepared and modify them for maximum impact in your state: Infographic, Media Statement, Myths vs. Realities, other resources.
• Share: Help us develop the best array of ideas and tools for getting the news media across the country to focus on the impact in communities of the arbitrary cuts and proposals to cap or limit charitable deductions. Share with us and your colleagues the press statements, op-eds, talking points, quotes, etc., that you have developed for media contacts in your states.

IV. Why We’re Fighting

We have received powerful comments from nonprofits throughout the country who have gone to the GiveVoice.org website. Here is a sampling (permission given for naming organizations):

• “We are a nonprofit organization who helps those with cancer at no cost to them or their families.  We rely on fundraisers and donations to stay open with an all-volunteer staff. We are the only organization offering the programs and services in the Tri-State area we live in. We rely on the current charitable giving incentives so we may continue to help those who are newly diagnosed or going through treatments.” We Care Cancer Support Inc., Bullhead, Arizona
• “Soroptimist International of the Central Jersey Coast services the hardest hit area of Storm Sandy. Many of our members have lost homes. Our neighbors are suffering devastating loss of homes, income, and emotional and physical needs. We must have our contributions so we can carry on our work to help women and girls in our community. We help the local women's shelter, girl scout's camp, sexual abuse rape victims, and the local children's hospital. We also give gifts for girl's who volunteer in our community and give scholarships to women rejoining the work force. Without the incentive to donate, our work will be over. Soroptimist International of the Central Jersey Coast, Lakewood, New Jersey

UPMC Among Nonprofits Eager to Avoid Paying Property Taxes

An interesting article about a major nonprofit (UPMC) who is making a rare move in order to avoid paying property taxes. Click on the link below to read this article and learn more about what types of deals other nonprofits are making. 

 

 

View Article Here

 

State of the City: Budget Focus for 2012 Will Impact Nonprofits

Mayor Dick Miller had a stark message in his State of the City address delivered Tuesday night that mentioned possible layoffs for city workers and targeting nonprofits to raise revenue. A summary article in The Daily Star is available here.

The full State of the City speech is available here.

Here is the section of the speech addressing nonprofits:
The Council won’t have many options. It will either have to reduce essential services with related layoffs, or generate additional revenue either through cooperative efforts with the City’s not-for-profit entities or consolidation with the Town and sales tax preemption. There are other ideas: a commuter tax, renegotiation of the City share of County sales tax revenue, or a sales tax increase. These are unpopular concepts, but I would not be acting responsibly if I did not call attention to problems that won’t simply go away, or to potential solutions that must be considered in order to deal with them. With a property tax cap in place, and fees adjusted to rates in comparable communities, the City has virtually no options to generate revenue that don’t involve the cooperation of other entities from the New York State and County legislatures to the local not-for-profit community. We have pushed out the day of reckoning, but it will be upon us nonetheless. The City will face tough choices. Those who care about its condition will have to decide how important it is to them to maintain services in public works, fire, and police at current levels. Our situation is a difficult one, but it is straightforward.

Spending Cuts, Filing Information, and More from Nonprofit Advocacy Matters

Cuts, Cuts and more Cuts
The National Council of Nonprofits reported in their newsletter, "Nonprofit Advocacy Matters", that Spending cuts were the consistent theme throughout Washington last week as the President, during his State of the Union address Tuesday night, called for a five-year freeze in non-defense discretionary spending. Also on Tuesday, the House adopted a resolution capping spending for the current fiscal year at or below the levels provided in fiscal 2008. This limit is expected to produce budget cuts this year of $55 billion to $60 billion. In addition, the recommendations of the Republican Study Committee to cut $2.5 trillion in spending over the next 10 years were incorporated in the proposed Spending Reduction Act. Among many items, that bill would block spending for the Corporation for Public Broadcasting, the National Endowment for the Arts, National Endowment for the Humanities, and for national service programs. The legislation is not expected to be brought up in the House, but it does provide a roadmap for the areas that are being targeted for reductions in the future.

Federal Regulations and Job Creation
Federal regulations are frequently criticized for frustrating job creation, and the President and House Republicans are taking steps to identify key problem areas. On January 18, President Obama signed an executive order on Improving Regulation and Regulatory Review calling for "a government wide review" of federal rules and regulations to remove those "that stifle job creation and make our economy less competitive." The order was accompanied by an op-ed by the President published in the Wall Street Journal. In the House, Oversight and Government Reform Chairman Darrell Issa (R-CA) has created a website asking employers to identify government regulations and practices that either help or inhibit job creation. The website asks for responses to the questions: "Where does Washington help, and where does it hurt?" The National Council wants to know your ideas about particular rules or regulations that need improving.

Form 1099 Filing Requirements
There is strong momentum for repeal of the new tax-reporting requirement in the health care law that, starting in 2012, will require nonprofits and for-profit businesses to report aggregate payments to vendors in excess of $600 for goods and other property. A bill introduced last week by Sen. Mike Johanns (R-NE), S.18, has bipartisan support and is paid for by rescinding prior appropriations. A second proposal introduced by Finance Committee Chairman Max Baucus (D-MT) and Majority Leader Harry Reid (D-NV), S.72, has no offsets. A House bill, H.R.4, has broad bipartisan support. President Obama expressed support for repeal of the requirement during his State of the Union address.

How Will the New Tax Law Affect Your Nonprofit, Your Employees, and the People You Serve?

Yesterday Congress passed the $857 billion tax package negotiated by President Obama and congressional Republicans. President Obama is expected to sign the legislation today.

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act (H.R. 4853) has numerous components of interest and concern to nonprofits – as employers and as mission-based organizations involved in local communities. This list presents portions of interest to most nonprofits, nonprofit employees, and the people they serve:

• Tax Rates Maintained: All of the individual tax rates put in effect in 2001 and 2003 are maintained through 2012, including those for upper-income tax brackets. Most immediately, this means that nonprofit and other employers will not have to adjust employee withholdings for income taxes.
• Individual Payroll Taxes Reduced: Employees receive a two percent reduction in the Social Security tax they pay. For 2011, nonprofit and other employers will need to reduce the individual's share of payroll withholding from 6.2 percent to 4.2 percent. To illustrate what this change means, an individual earning $50,000 will see $1,000 in tax savings.
• Estate Tax: The bill restores and reduces the federal estate tax at a rate of 35 percent and increases the exemption level to $5 million, two changes that many fear will eliminate previous incentives for the wealthy to give.
• Charitable Giving Incentives: The IRA rollover and other expired charitable giving incentives (promoting donations of food, land, computers, and books) are restored for the remainder of 2010 and through the end of 2011, which should help promote giving.
• Unemployment Benefits: The legislation extends the enhanced program of 99-weeks of unemployment benefits through 2011. This allowance may prevent additional strain that would have hit many nonprofits that provide services to those with no income.
• Alternative Minimum Tax: Middle-income taxpayers will not be subject to the alternative minimum tax in 2010 and 2011 because the bill renews a "patch" that limits the application of the AMT to approximately four million upper-income individuals. Without this patch, many taxpayers would have seen an automatic increase in their tax rates.

The following link will take readers to a 12-page summary that provides greater detail about the bill, including provisions that might be of interest to particular nonprofits (e.g., those providing child care, adoption assistance, certain education): Summary of the Reid-McConnell Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010.

Also, the IRS just released instructions to help employers implement the 2011 cut in payroll taxes, along with new income-tax withholding tables that employers will use during 2011. See Notice 1036.

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Nonprofits Have Big Role in State

As Governor-Elect Andrew Cuomo and legislators shape their plans for New York next year, they should pay close attention to the state's vibrant not-for-profit sector, as it is the standard-bearer for innovation and service to the state and its people. The 80,000 not-for-profit organizations in the state play crucial roles: leading efforts to prevent or cure disease, alleviate poverty, advance education, address environmental and social concerns, and ennoble through culture.

New York's robust charitable sector, including such powerhouses as Columbia University, Sloan-Kettering, the Red Cross, the Ford Foundation and Lincoln Center, as well as community-based organizations, such as local drug-prevention programs, small community theaters and religion-based charities, help fuel the state's economy, generating over $150 billion in revenue annually and employing hundreds of thousands of New Yorkers. Second in size only to the government as an employer in the city, the nonprofit sector provides more jobs than the financial and insurance industries combined.

Working together, state government and nonprofits can help maintain our state's primacy as innovator, incubator and magnet for investment. Here's how.

* Adjust taxes to encourage more giving. For example, reward taxpayers for increases in year-over-year charitable giving and incentivize artists to donate their work to charity auctions in support of good causes.

* Promote regulatory, administrative and legislative reforms that make it easier to start and operate nonprofits, especially in high-tech, medical research and green industries.

* Encourage and facilitate partnering among nonprofits and between them and for-profit businesses. For instance, provide a clearinghouse so that environmental groups can pair up with green-tech businesses or so arts-in-education organizations can collaborate with founders of charter schools.

* Incentivize nonprofits to hire recent college graduates to fill needed roles while they learn important lessons about professional development and social responsibility.

* Rearrange state budgets with existing charitable resources in mind. For example, recalibrate school aid and Medicaid expenditures so that public spending on students, the elderly and the disabled complements and stimulates private nonprofit resources and support.

* Safeguard against encroachments on sales- or property-tax -exemptions, which would hurt already-stretched hospitals, elder-care facilities and YMCAs.

* Promote visibility for worthy nonprofits by providing voluntary check-offs on state tax forms.

* Include nonprofit destinations in the state's promotion of tourism and convention activity.

* Make nonprofits part of New York's federal lobbying strategy.

The public's trust in state government may be at a low ebb, but public support for nonprofits endures. By recommitting himself to the well-being of our valuable nonprofit institutions, Mr. Cuomo can take important steps toward reclaiming the state's role as a national beacon and perpetuate its highest ideals.

by Lesley Freidman Rosenthal, for original article click here.

Mayor: City should avoid PILOT deals

The Daily Star reported that Mayor Dick Miller is not recommending PILOT agreements with the city's large nonprofit entities.

Slightly more than half of the real property value in the city is owned by property tax exempt nonprofits, particularly Hartwick College, the State University College at Oneonta and A.O. Fox Memorial Hospital.

Earlier this year, Miller said Payment in Lieu of Taxes agreements could be one way to help alleviate projected budget deficits.

But in a recent memo to aldermen, Miller said nonprofit organizations are as strapped for cash as the city and the city should look at other arrangements with the institutions.

"Clearly, the city benefits from the presence of many not-for-profits, ranging from two large colleges, one public and one private, the Fox Hospital, the YMCA, the Boys and Girls Club, Opportunities for Otsego and a wide range of other service-providing organizations and churches," Miller said.

But he said the city bears most of the burden for providing services for the institutions.

"It doesn't even out in the sense that the employees of the hospital and the colleges do not all live in the city," Miller said. "The costs of having these institutions here are born by the city almost exclusively, and the economic benefit is a regional one."

Not-for-profit institutions own 51 percent of the real property value in the city.

Read more here.

Payment in lieu of taxes for nonprofits on the radar for Oneonta

The Daily Star related in a recent article that the city of Oneonta will run a $2 million deficit by 2012 and exhaust its reserve funds by 2013 with the current trend.

A number of proposed cost cutting ideas and reductions are being discussed, but the city is also looking at ways to increase revenue. One such idea mentioned was payment-in-lieu of taxes agreements for nonprofit entities.

Focus on this area is growing across the region, and nonprofits clearly need to make this issue a priority and work to address it. Have ideas on next steps or suggestions for action? Share them here or e-mail us.