February 2018 Public Policy Update: Halfway Through the Legislative Session; Federal Budget Drama; State of the Nonprofit Sector Survey

February 13, 2018

It’s already mid-February and there have been many state and federal public policy developments relevant to the nonprofit sector. Below are key issues for your nonprofit organization to be aware of:

State of the Nonprofit Sector Survey

Join us in taking and promoting the State of the Nonprofit Sector survey, conducted by the Nonprofit Finance Fund. The survey is the largest national sampling of nonprofit organizations and the data collected outline the overall health and challenges for the nonprofit community. The survey is a powerful platform for nonprofits large and small, urban and rural, across sub-sectors and geographies, and its findings are widely used and cited by nonprofit leaders and boards, funders, advocates, policy advisors, media, researchers, and many others. The survey closes on February 21. Make sure your voice is counted by taking a few minutes today to complete the survey and share it with other nonprofits!


February 27 Legislative Reception in Olympia

In partnership with the United Ways of the Pacific Northwest, Philanthropy Northwest, and the Washington State Community Action Partnership, Washington Nonprofits is proud to announce the 5th annual Nonprofit Legislative Reception. This is a great opportunity to meet state legislators, nonprofit leaders, and special guests. Click here to learn more and register before registration closes on February 20.


March 14 Public Policy Advisory Call

Please join us at noon on March 14 for our Public Policy Advisory Call. We will discuss current policy issues impacting the nonprofit sector, both nationally and in Washington State. Additional information, including the call’s agenda, will be posted and shared in advance of the call. Click here to register.


State Policy

Washington State Legislature Reaches Halfway Point

Washington State’s Legislature has reached the halfway point of this year’s 60-day legislative session. Thousands of bills were introduced this year, however, only a limited number made it past the cutoff deadlines to advance through the legislative process. A diagram of the cutoff deadlines is available here and the full list of bills that made it past the cutoff deadlines is available here. The Seattle Times noted that this year’s session has been exceptionally quick and action-packed because the Democrats regained control of the State Senate, making it easier for the party to pass its legislative agenda. One major legislative accomplishment thus far is the passage of the long-delayed FY 2017-2018 capital budget. Governor Inslee signed the bill into law in late January.


Washington Nonprofits has identified three key bills relevant to the nonprofit sector that were introduced this session. Below is a summary of our actions on the bills:

SB 5991– Increasing transparency of contributions by creating the Washington state DISCLOSE act of 2018

Washington Nonprofits is currently watching SB 5991 as it makes its way through the legislature. Under the bill, all types of nonprofits that spend above $10,000 on ballot measure advocacy would be subject to the same donor disclosure requirements as traditional political committees (such as PACs). The disclosure requirements would also apply to all types of nonprofit organizations that provide $10,000 to a 501(c)(4) or PAC for ballot measure advocacy and to 501(c)(4) organizations that provide $10,000 to PACs for political spending. SB 5991’s disclosure requirements mean that the nonprofit would have to disclose its top ten donors above $10,000, as well as any donors above $100,000, if it engages in the spending described above. The disclosure would apply to any donor to the organization that meets the giving threshold, regardless of whether the money was earmarked for a specific purpose.

Washington Nonprofits discussed the proposed legislation during our January 9th public policy call. We have also been sharing information with nonprofits throughout the state that engage in ballot measure work. We strongly encourage your organization to reach out to Senator Andy Billig — SB 5991’s prime sponsor — to convey your view on the bill if you engage in ballot measure activities.

When the House and Senate held their initial hearings on the bills, Washington Nonprofits conducted rapid response activities to provide important follow up information to the committees regarding nonprofits and ballot measures. Click here to download our rapid response materials.

We decided that the best course of action is for Washington Nonprofits to be neutral on the bill and focus on ensuring that the legislation is clear and influencing its potential implementation. Currently, there are limited resources available from the Public Disclosure Commission regarding nonprofit ballot measure advocacy. The materials that are available do not speak directly to nonprofits and are complex in their descriptions of compliance requirements. Because of this, Washington Nonprofits encouraged Senator Andy Billig and Representative Mike Pelliciotti (the sponsors of the Senate and House bills) to modify the legislation so that nonprofit-specific compliance materials are produced. Washington Nonprofits’ Director of Public Policy and Advocacy David Streeter conveyed our message during his testimony about the bill during a hearing on February 7. Click below to watch Streeter’s testimony.

The bill is scheduled for a follow up executive session in the House State Government, Elections, and Information Technology Committee. The committee is likely to vote on an amendment that would raise the reporting threshold in the bill from $10,000 to $25,000, which Washington Nonprofits supports. We will continue to provide updates about the bill as it progresses.


HB 2986– Concerning Fees Collected by the Secretary of State

This legislation would more than double the annual corporate filing fee paid by nonprofit organizations by adding an $11 processing fee to the current $10 filing fee paid by nonprofits to the Secretary of State’s office. This would result in approximately $660,000 being diverted from human services, arts, environmental conservation, education, and other critical community services across the state. Washington Nonprofits opposes this bill and sent Representative Kristine Lytton, Representative Zack Hudgins, and Representative Sharon Wylie — HB 2986’s prime sponsors — a letter conveying opposition to the bill as currently written. The bill is eligible to be considered past the initial legislative cutoff deadlines because the bill impacts the implementation of the state budget. We will continue to provide updates on this legislation as we learn more and if it becomes scheduled for action.


HB 2853– Providing a retail sales and use tax exemption for qualified donations to the Washington excellence fund

This bill was crafted in response to the new federal tax laws and represents an attempt by legislators to offer a tax benefit to taxpayers who now have their state and local tax deduction (SALT) amount capped by the new federal laws. According to the bill summary, “The Washington Excellence Fund is created and will fund the State Need Grant program. A person who makes a donation to the Washington Excellence Fund will receive a state retail sales or use tax exemption in an amount equal to the monetary donation amount. This state retail sales or use tax exemption may be used to reduce a person’s state retail sales or use tax on purchases of taxable goods or services valued at over $150,000.”

Washington Nonprofits sent Representative Jeff Morris — HB 2853’s prime sponsor — a letter conveying concerns about the bill. Washington Nonprofits Executive Director Laura Pierce wrote:

“In brief, this legislation would set a precedent in which Washington’s state government provides a state tax benefit for making donations to a state-sanctioned charitable entity as a means to reduce the burden caused by the SALT cap on certain taxpayers. We feel that this may have the potential to create future confusion over what constitutes a charitable gift in our state. Additionally, we have learned through discussion with our partners in the National Council of Nonprofits network that such maneuvers to circumvent the SALT cap may not withstand legal scrutiny as well as likely Internal Revenue Service regulations and congressional actions. Therefore, we feel that the issue merits additional study and dialogue while the IRS continues to issue implementation guidance on the new tax laws. (Click here to download the full letter)”

The bill ultimately did not pass out of committee before the cutoff deadline, which means that it is dead for this session. However, the bill itself or similar bills could emerge next session as Washington State adjusts to the new federal tax laws.


Presidents’ Day Weekend Town Hall Events

Attending town hall events is a great way for your organization to connect with elected officials and share your concerns. During Presidents’ Day weekend, legislators will be holding town hall events around the state. Click here to view a list of town hall events compiled and updated by the League of Women Voters.


Federal Policy

Federal Government Shuts Down Overnight; President Trump Releases 2019 Budget

January and February have seen significant action regarding federal spending and budgeting priorities. Last week, the federal government shut down overnight after failing to pass a continuing funding resolution. Shortly after the shutdown, the House and Senate agreed to a new two-year agreement that will allow $300 billion in new federal spending over two years and keep the government funded until March 23. According to The Hill:

“The bill will fund the government until March 23, which will give lawmakers time to write an omnibus spending bill for the rest of the fiscal year and break the pattern of gridlock that has led to five temporary funding patches since September. The deal also includes a number of other priorities for both parties, including nearly $90 billion for disaster relief, $6 billion to address the opioid crisis, a four-year extension of the Children’s Health Insurance Program and more than $7 billion for community health centers. The deal, however, did not include a fix for the Deferred Action for Childhood Arrivals (DACA) program, setting up an immigration fight in days to come.”

The National Council of Nonprofits wrote in its analysis of the agreement available here:

  • Defense and Nondefense Discretionary Spending: One of the most contentious issues preventing congressional negotiators from reaching an agreement on spending levels was the question of whether and how much defense spending would be increased, and whether nondefense programs, typically those that provide human services – often by hiring nonprofits to provide those services, would be reduced in equal amount or also increased. The BBA boosts defense and nondefense discretionary spending caps by $296 billion over two years: $165 billion for defense, and $131 billion for nondefense.
  • Spending Decisions: The BBA approves immediately spending $90 billion in additional emergency funds for communities affected by hurricanes and sometimes 2017 wildfires. It also sets aside $20 billion for infrastructure, about one-tenth of what President Trump is calling on Congress to appropriate over the next decade.
  • Healthcare Programs: After more than a four-month delay, Congress reauthorized the Community Health Center Fund for four years, averting the closure of some of the health centers that collectively serve more than 27 million mostly low-income individuals. The BBA also extends to 10 years the federal funding reauthorization for the Children’s Health Insurance Program, which covers 9 million low-income children and pregnant women. Further, the law reauthorizes for five years a federal program that provides home visiting services to at-risk mothers-to-be and new moms. The law provides $6 billion to address the opioid crisis. It also repeals the Affordable Care Act cuts to Medicaid Disproportionate Share Hospital payments for two years, and doubles the amount of funding available for Child Care Development Block Grants, used to help subsidize care for low-income working parents
  • Tax-Law Changes: The new law restores or extends about 30 business and individual tax provisions, collectively known as “extenders.” None applies to charitable nonprofits. The BBA also fixes a glitch in the 2017 tax law provision that imposes the 1.4 percent excise tax on nonprofit college/university endowment investment returns. The Senate Parliamentarian ruled in December that language carving out Kentucky’s Berea College violated the Senate procedural provision known as the Byrd Rule. Another provision in the BBA exempts Newman’s Own Foundation from the private foundation excess business holding tax.
  • Immigration: The budget law doesn’t include legislative language that resolves the status of Dreamers under the Deferred Action for Childhood Arrivals program, but the Senate is scheduled to open the debate this week. Senate Majority Leader McConnell (R-KY) had promised Senate Minority Leader Schumer (D-NY) floor action on immigration legislation in return for voting to reopen the federal government on January 22. Speaker Ryan (R-WI) has not committed to taking action on the measure.

The overnight shutdown occurred days before President Donald Trump released his FY 2019 spending proposal. According to NPR:

“President Trump released his 2019 budget proposal Monday calling for increased spending on the military, border security and the opioid crisis. But the White House blueprint has already been overtaken by events. The two-year budget deal passed by Congress last week boosts spending for both the military and domestic programs by nearly $300 billion over the next two years, complicating White House efforts to reorder federal priorities.”

The National Council of Nonprofits published a detailed analysis of the budget proposal available here, excerpts of which are below:

  • Health and Social Programs: The President’s budget proposes a two-part approach to repealing and replacing the Affordable Care Act: “enactment of legislation modeled closely after the Graham-Cassidy-Heller-Johnson (GCHJ) bill” considered last year, and enactment of unspecified “additional reforms to help set government healthcare spending on a sustainable fiscal path that leads to higher value spending.” The plan also calls for major cuts to Medicare of $554 billion over ten years, and reductions to Medicaid of $250 billion over the same period. Plus, the White House is proposing to reduce funding for the Supplemental Nutrition Assistance Program (SNAP or food stamps) by $214 billion over the next decade. The draft budget suggests expanding work requirements in the SNAP and Temporary Assistance for Needy Families (TANF) programs.
  • Programs Eliminated: The President is urging through his budget that Congress abolish at least 22 existing programs, including the Corporation for National and Community Service, the Corporation for Public Broadcasting, the Institute of Museum and Library Services, the National Endowment for the Arts, the National Endowment for the Humanities, the Legal Services Corporation, National Wildlife Refuge Fund, and the Global Climate Change Initiative.
  • Education: The Administration once again calls on Congress to eliminate the Public Service Loan Forgiveness Program, which enables nonprofit employees to erase their student loan debt after 10 years. …
  • Impact of the 2017 Tax Law: The budget blueprint projects that tax receipts will be $314 billion lower in 2018 than it forecast last year and almost $400 billion lower in 2019. The budget documents further project that tax receipts will be $200 billion lower in 2027 than originally expected, acknowledging that the 2017 tax law will not pay for itself, as had been promised by proponents when the legislation was being debated in December.

Importantly, The Hill noted in its reporting on the budget proposal, “Like other presidential budgets, Trump’s blueprint will almost certainly not become law. But it still highlights the White House’s priorities in an election year that looks to be dominated by debates about infrastructure, immigration and the nation’s economic health.” Washington Nonprofits will continue to provide updates on the federal funding landscape as Congress and the Trump Administration continue to work toward a formal federal budget.


Potential U.S. Census Question on Citizenship

According to an article from ProPublica on December 29, 2017, the U.S. Department of Justice has asked U.S. Commerce Secretary Wilbur Ross and the Census Bureau to include a question in the 2020 Census about citizenship status. This effort creates unnecessary fear across the country among immigrant communities and will deeply limit participation by those communities. Washington Nonprofits is strongly opposed to the addition of such a question for several reasons, including that such a question could end up depressing the census count. If a citizenship query did depress responses, as experts have predicted, it could have serious ramifications for the distribution of federal resources as well as the data available for nonprofits and governments to address community needs. Click here to download the letter that was sent to Senator Maria Cantwell (D-WA), Senator Patty Murray (D-WA), Representative Jaime Herrera Beutler (R-WA), Representative Derek Kilmer (D-WA), Representative Cathy McMorris Rodgers (R-WA), and Representative Dan Newhouse (D-WA).


Share Your Thoughts with Representative Suzan DelBene

Representative Suzan DelBene (D-WA) is conducting a one-question survey on economic issues for her constituents. If your nonprofit is based in her district or serves its constituents, be sure to participate. Click here to take the survey.


February Advocacy Tip

February Advocacy Tip: Start Making Your Voter Engagement Plan for 2018

A significant, yet underutilized, activity to build your organization’s advocacy capacity and support the individuals you serve is to conduct nonpartisan voter engagement activities. Nonprofit organizations are fully permitted to conduct nonpartisan voter engagement and “get out the vote” activities during elections. In certain circumstances, some agencies may even be required to do so. There are many reasons for wanting to make voter engagement a piece of your organization’s work. First and foremost, voting is a critical way for your organization and its constituents to engage in our civic process. But from an advocacy capacity perspective, conducting nonpartisan voter engagement will help raise your profile with elected officials for one simple reason: elected officials pay attention to voters. If your organization is actively mobilizing people to participate in elections in a nonpartisan manner, it shows that your organization plays a key role in your community and makes it more likely that an elected official will pay attention to your organization’s work and policy requests. To get started with voter engagement, check out the resources available from Nonprofit Vote, including its series of upcoming webinars.

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