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

Syracuse: Governor Cuomo's Tax-Free NY First of its Kind in US, Economists Say

Gov. Andrew Cuomo's Tax-Free NY first of its kind in U.S., economists say

Economists are saying that Gov. Andrew Cuomo's new Tax-Free NY program is the first of its kind in the country. Cuomo is shown here in Syracuse Wednesday visiting Upstate Medical's Weiskotten Hall. (Stephen D. Cannerelli | scannerelli@syracuse.com)

Print

By Glenn Coin | gcoin@syracuse.com 
Follow on Twitter
on May 26, 2013 at 7:55 AM, updated May 26, 2013 at 10:24 AM

Email

Once again, New York is charting new territory on tax breaks.
And that's not necessarily good news, say economists from both the right and left.
Several national economists say they've never heard of a plan like Gov. Andrew Cuomo's Tax-Free NY, announced last week. The program would give complete state and property tax breaks to businesses that open on or next to college campuses. It would even give their employees breaks on their state income tax.
"It doesn't exist in any other state," said Scott Drenkard, an economist with the pro-business Tax Foundation in Washington, D.C. "I don't know of tax-free zones like this that remove income tax from certain employees."
"I have not heard of anything like this before," said John Yinger, a professor of local public finance at The Maxwell School at Syracuse University.
For different reasons, Drenkard and Yinger both dislike the Tax-Free NY program, which would give qualifying businesses that move onto SUNY campuses a free ride - no property taxes, no corporate taxes, no sales taxes and no income taxes for their workers.
Drenkard said such targeted tax breaks make the tax system unfair and ultimately hurts, not helps, businesses.
"Carving out special tax breaks for certain favored businesses is destructive to the economic playing field," Drenkard said. "A much better option in the long run is to go with broader tax bases and as low a tax rate as you can make while still maintaining necessary government services."
The right-leaning Empire Center in Albany criticized the program for similar reasons.
Yinger says virtually all the research he has seen, and that he and his students have conducted, on targeted tax breaks shows they simply don't work -- especially those that hope to attract businesses in from other states.
"In New York we have a dizzying array of tax breaks with no evidence they help, and now here's a new version," said Yinger, who teaches courses in public budgeting and researches the effect of taxes upon behavior. "I think it would be just be another source of inequity in our tax system and would do nothing to help promote economic development. You'd do much better improving our schools and infrastructure than giving tax breaks to businesses who would be in the state anyway."
The state's new minimum wage tax credit program, also the first of its kind, was also criticized by economists for some of the same reasons the tax-free program is. That tax credit subsidizes the wages of teen-age students as New York's minimum wage rises over the next several years.
Under Cuomo's tax-free proposal, a business's tax-free status would last a decade. Workers would go five years without paying state income taxes. After that, their first $200,000 of income would be free of state income taxes.
Yinger said the income tax break for workers "looks particularly unpromising" as an economic development tool. He said that does little to help businesses -- other than allowing them to pay their employees less.
If passed by the New York State Legislature, the plan would put a total of 120 million square feet across the state into tax-free zones. That's equal to all the office space in Buffalo, Rochester and Syracuse combined, the governor said.
"It's big, it's bold," Cuomo told the editorial board of The Post-Standard and Syracuse Media Group. "I think it could make a major difference.
Cuomo said the program would have almost no cost to taxpayers because the majority of land in the program is not subject to property taxes. Plus, he said, these would be jobs that New York has been losing in recent years.
"This is a job you don't have now," Cuomo said. "And, just because the person doesn't pay income tax, doesn't mean there's not a revenue enhancement to that person getting a job in the state," adding the worker might buy a house, generate real estate fees, sales taxes and other spending in the community.
Cuomo's plan has received positive reviews from local business and economic development officials, like Rob Simpson, president of CenterState CEO, a nonprofit business development group.
"Turning those campuses . . . into economic engines and anchors for startup activities, I think it's a really important economic strategy,'' Simpson said."The tax free zones really offer a significant benefit to startup businesses that are coming out of these schools.''
Unshackle Upstate, a pro-business group, said it supports Cuomo's tax-free idea and hopes it mirrors the partnership between SUNY Albany's College of Nanoscale Science and Engineering and private companies.
"Governor Cuomo's Tax-Free NY plan will attract new businesses and much needed jobs to the Upstate region and also help end the brain drain that's plagued our communities for years," the group said in a prepared statement.
Locally, Sen. David Valesky, D-Oneida, and Assemblyman Al Stirpe, D-Cicero, also issued statements in support.
Still, some economists think giving property tax breaks to businesses makes it even harder for struggling cities to thrive.
"It seems like a positively bad idea for the mayors of the cities where the tax-free incentives will be implemented," said Kim Reuben, an economist with the liberal Urban Institute who recently attended a meeting with Syracuse Mayor Stephanie Miner about the problems of cities. "The limits on property taxes will be very tough for mayors in college towns like Syracuse who already face a limited property tax base, increasing pension costs as set by the state and property tax caps imposed by the state."

Contact Glenn Coin at gcoin@syracuse.com or 315-470-3251.

Staff writers Tim Knauss, Teri Weaver and Michelle Breidenbach contributed to this report.

(Source: syracuse.com)

Nonprofits here say 24 agencies save taxpayers $200 million

By Jay Tokasz

Would you invest $1 to save $11?

That’s the return rate for tax dollars spent on a variety of services provided by area nonprofit agencies, according to a new study by a local group of nonprofit executives.

The study by the Agency Executives Association examined programs at two dozen area agencies to come up with its government savings estimates.

Some of the savings occur in Medicare and Medicaid from programs that prevent hospitalizations or nursing home placements.

Taxpayers also save through services that reduce the number of kids who end up in juvenile detention and that move people from welfare into jobs.

For example, Meals on Wheels for Western New York serves meals to about 3,400 clients each year with a program budget of $4.4 million and a network of more than 1,500 volunteers.

The agency estimates that about 20 percent of those clients are able to remain in their own homes because they receive daily meals. Otherwise, those 680 clients would require nursing home care at an estimated $100,000 per year per client. That amounts to annual savings of $68 million from just one agency’s work, the study found.

Despite such data, Meals on Wheels is in jeopardy of losing funds due to the federal budget sequester that took effect in March, a scenario that ultimately would cost taxpayers more money. Many nonprofit agencies also are facing possible funding reductions in the state budget.

“The need has been growing every year,” said Tara A. Ellis, president and chief executive officer of Meals on Wheels.

In 2012, the agency distributed 5.3 percent more meals than in 2011, said Ellis.

“But the funding stayed flat, so if we were a business we would have lost money,” she said.

The agency filled its $350,000 funding gap by appealing to corporate donors.

But what would have happened had Meals on Wheels simply cut off services? Would some clients have ended up in nursing homes?

“The message we want to get out is there needs to be some smart policymaking here to invest in programs that save tax dollars,” said Jerry Bartone, executive director of Community Concern of Western New York and chairman of the Agency Executive Association’s leadership forum.

The AEA, an affiliate of the United Way of Buffalo & Erie County, represents 142 nonprofit agencies.

Looking at programs run by 24 area agencies, the study found that taxpayers save an estimated $200 million per year.

Some other nonprofits in the report included: the American Red Cross, Camp Good Days and Special Times, Compass House, Crisis Services, Goodwill Industries, Habitat for Humanity and Jewish Family Services.

Jewish Family Services’ refugee resettlement program, which costs $333,812 for 150 refugees, is estimated to save the government $2.5 million. Compass House provides shelter for 307 young people at a cost of $520,590, saving an estimated $10.9 million – the expense of housing those youth in a detention facility for a year.

The programs represent a broad cross section of services provided by an estimated 6,000 nonprofit organizations. Nearly 300 of those agencies operate with revenues of more than $1 million, generating a local economic impact of $2.7 billion.

“The whole intent was not to produce a definitive study on the issue. The whole intent was to begin the discussion,” said Paul C. Atkinson, chief executive officer and president of Consumer Credit Counseling Service of Buffalo and president of the AEA.

“We’ve just kind of scratched the surface of a lot of not-for-profits.”

The AEA hopes to meet with elected officials, foundations and other community members about its study.

Erie County legislators have not yet received a copy of the study and have not yet had a chance to review it. The county is asked to fund a lot of the agencies analyzed in the study.

Bartone and Atkinson said they were not advocating to increase funding for all nonprofit programs or to stop all cuts.

Atkinson acknowledged – as many funders have argued in the past – that the area probably has too many nonprofit organizations.

But an appropriate discussion should be held to determine adequate funding levels and to find agencies and programs that can deliver services most effectively and efficiently, he said.

Elected officials, added Bartone, “need to understand where to make investments and where to make cuts that benefit both taxpayers and the people who uses these services.”

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.
Read more >>

W-2 Reporting Requirement for Employers Update

The Patient Protection and Affordable Care Act (PPACA) contains a requirement for employers to report the cost of health coverage under an employer sponsored group health plan on an employees' W-2 form. The cost includes both the cost paid by the employer and contributions from the employee.
Read more >>

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.
Read more >>

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.
Read more >>

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.
Read more >>

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.
Read more >>

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

City of Syracuse Pushes Fees/Tax for Nonprofits

The Syracuse Post-Standard featured a recent article about the City of Syracuse's financial challenges and plans to address it. This includes fees/PILOTs for nonprofits:

Eyeing nonprofits

The city boosted property taxes 5.4 percent in 2010, but property taxes account for less than 12 percent of city revenues — $33 million out of a budget of $284 million.

Just over half of the city is exempt from taxes.

“When 50 percent of your property is off the tax rolls, using property tax to fund your services as a city doesn’t make sense,” Miner said.

Many tax-exempt parcels are owned by government agencies. But about one-sixth of city property — $1.2 billion worth — is owned by private, tax-exempt institutions such as universities, hospitals and churches, assessor David Clifford said.

Miner and members of the council want those nonprofit institutions to pay a share of the city’s costs.

“If you use snowplows, you should have to pay for snowplows,” Miner said. “If you use police services and fire services, you should have to pay for that.”

Last year, Miner persuaded Syracuse University to make $500,000-a-year voluntary payments for city services, saying she hoped to persuade other nonprofits to do the same. But thus far there are no other takers.

“We’re having discussions,” Miner said, not specifying with whom. “Nobody has banged on my door with a million dollars.”

City leaders will push the issue this year.

Common Councilor Pat Hogan said tax-exempt institutions should pay a fee for city services based on the number of employees they have, a rough proxy for how much they depend on city services.

If they won’t contribute voluntarily, Hogan said he is prepared to propose a city income tax. Hogan said he envisions allowing city property owners to deduct their city income tax from their property tax.

He floated a similar idea during negotiations with Onondaga County over sharing sales tax revenue, but dropped it when the county agreed to the city’s terms.

“The large nonprofits have to start paying their fair share,” Hogan said. “Or we’ll bring back the commuter tax.”

Read more here.