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

Vestal refuses tax exemption on new UHS clinic, case headed to court

United Health Services Hospitals Inc. and the Town of Vestal are likely headed for a showdown in court after officials refused to grant the nonprofit a tax exemption on an $8.48 million property assessment for its new hospital clinic and the land it sits on.

 

UHSH contends it can use its nonprofit status for a tax exemption on not just the 77,600-square-foot facility it built and owns at 4417 Vestal Parkway East, but also the land it leases from a private corporation.

 

The town, however, dismissed the request for the tax exemption in May, saying: “Your complaint has been dismissed because of your (or your representatives) willful neglect or refusal to attend this board’s hearings or to be examined concerning your complaint or to answer questions relevant to your complaint.”

 

If the exemption is granted, the town, Broome County and the Vestal Central School District stand to lose tax revenue from the property. Just how much remains to be seen.

 

The private corporation, FGR Vestal LLC, with principal members George and Ronald Akel, previously paid property taxes on the parcel.

 

In May, while construction of the new hospital clinic was still underway, the building, improvements on the land, and the land itself, were valued at $8.48 million based on the tax roll filed for the 2012-13 fiscal year.

 

Before the facility was built, the land was assessed at $2.42 million, and FGR paid the $36,702 tax bill on the parcel, reflecting the 2011-12 fiscal year. FGR also paid the $49,437 school tax bill to the Vestal school district for the same fiscal year.

 

UHSH, which is administered by parent organization United Health Services Inc., or UHS, said lost tax revenue would be offset by the new hospital clinic creating other economic benefits for the town.

 

Vestal Town Attorney David Berger did not return requests seeking comment. Town Supervisor John Schaffer and Town Assessor Mark Minoia declined to comment, citing potential litigation.

 

After town officials dismissed the tax exemption request, UHSH began pursuing a legal challenge in Broome County Supreme Court, according to court documents filed July 27.

“It is very concerning to us that the Town of Vestal is choosing to question our tax-exempt status, while scores of other not-for-profit agencies in the town also are tax-exempt,” Matthew Salanger, president and CEO of UHS, said in a statement.

“We expect that the new UHS Vestal, with its appealing design, range of services and central location, will attract many people from outside the area to Vestal, where they will purchase goods and services and contribute substantial dollars to the local economy,” he added.

With the 2012-13 fiscal year tax exemption dispute unresolved, UHS, on Oct. 2, paid the $180,255 school tax bill that is based upon the disputed $8.48 million property assessment.

The town and county tax rates for the 2012-13 fiscal year haven’t been finalized.

'A unique situation'

During initial interviews for this report, attorneys for UHSH said court proceedings have been adjourned until November while they negotiate with town officials to try to reach a settlement.

In follow-up interviews, attorneys said UHSH plans to leave it up to the courts to decide.

“Is the property partially exempt, wholly exempt or, as it currently stands, not exempt at all,” said Paul Sheppard, an attorney of the firm Hinman, Howard & Kattell, representing UHSH in the case.

“This is a unique situation in that (UHSH) possesses the building that is on the property,” said Jeffery Alexander, a vice president and general counsel for UHS.

He said this means the leased land becomes an “integral” part of the not-for-profit health care services and is thus warranted a tax exemption based on New York State tax laws.

 

Alexander was asked to provide examples of other lease agreements where the nonprofit owns a building, but leases the land it sits on.

 

“UHS has many tenant leases, but none parallel the Vestal situation,” he said, noting other legal precedents could not be found by the nonprofits’ outside legal counsel.

 

In March 2010, UHSH began a 25-year lease with FGR for the property where the hospital clinic was built for about $30 million, according to UHS. The lease permits UHSH to renew for another 50 years.

 

Read more here.

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

Boston's PILOT Efforts Create Issues for Nonprofits Across US

Tim Delaney, President & CEO, National Council of Nonprofits, posted to Huffington Post about the recent issue of PILOTS in Boston.

As he relates: Leaders of nonprofit organizations across America were stunned by reports this week in the Boston Globe and NPR's Marketplace that the City of Boston would turn its back on the nonprofit cultural, educational, and health care institutions that have played such vital roles in making that city great.

What stunned nonprofit leaders nationwide is that Boston sent letters essentially mandating that various nonprofits make "Payments-In-Lieu-Of-Taxes" (PILOTs) to the city based on the value of their property, even though Massachusetts law -- like the law in all 50 states -- prohibits local governments from taxing nonprofit property. What in turn shocked nonprofit leaders is how Boston intends to enforce its supposedly "voluntary" PILOT program: with a Scarlet-letter campaign designed to coerce compliance with the city's demand for "voluntary" payments.

Boston has concocted an Orwellian program that uses euphemisms -- such as "PILOTs" instead of "property taxes" and "voluntary" instead of "coerced" -- apparently attempting to hide what is really happening to evade what the law prohibits. The city, knowing the courts would strike down as an illegal act any attempt to directly impose property taxes on charitable nonprofits, invented a program to coerce "voluntary" Payments-In-Lieu-Of-Taxes. But slapping on a misleading label to cover a bad act does not render it any more acceptable; a payment based on property value is still a tax.

To enforce its legally unenforceable program, Boston has threatened to paint a Scarlet letter of shame on every nonprofit that does not comply with the city's demands for payments. Such coercion to obtain what the Commonwealth's law prohibits is outrageous and threatens everyone; who's next, when Boston -- or any government -- wants something the law prohibits?

The city's program also disregards unique aspects of nonprofit law, thus putting coerced nonprofits at risk of running afoul of the Massachusetts Attorney General, who has jurisdiction to oversee that funds donated to nonprofits are used as donors intend. By demanding that nonprofits pay the city 25 percent of their property's tax value, the city is whipsawing nonprofits, putting them in a lose-lose dilemma: either undergo the city's shameful public branding, or cave in to the city's demands to pay, only to have the Massachusetts Attorney General come after the nonprofit if donors complain that they gave their money for purposes other than transfers to the city treasury.

In trying to balance its budget on the backs of people served by charities and those who donate to them, Boston has disregarded not only the law, but also fiscal reality. The recession already has stretched nonprofits too far financially as demands for their services have skyrocketed while their revenues have nosedived, with corporate contributions declining, foundation grants down, and governments delaying payments and not paying full costs on legally-binding contracts. According to the IRS, even individual giving has sagged by 20 percent. Read more here.

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.

Report on tax-exempt property in Binghamton clears up misconceptions

The Press & Sun-Bulletin discussed a report that examined the number of properties in Binghamton that are tax exempt. Although the headline may seem to imply some kind of a problem, the article is a fair and balanced perspective. As the article relates:

About a third of the assessed property value in the city is exempt from taxes.

That's according to a recent report compiled by the city's assessor, Scott Snyder.
Total exemptions in 2011 are valued at $625,642,280 or 33.8 percent of a total assessed value of about $1.8 billion in city property, Snyder said.

That leaves a total taxable property value in Binghamton of about $1.2 billion.
Exemptions include churches, hospitals, nonprofits, schools and government buildings. In addition, the city gives property tax breaks for veterans, the disabled and low-income elderly.

Take away the exemptions for veterans, the disabled and low-income seniors, the percentage of total property tax exemptions drops to about 29 percent, Snyder said.
None of that is unique to Binghamton or other upstate cities that serve as county seats.

"The numbers for the City of Binghamton are at or below the other levels I've seen," Snyder said.

Of about 3,600 total property tax exemptions granted, 900 are for low-income elderly and about 1,700 are for veterans.

The city's exemption report is the first of its kind in recent years, said Teri Rennia, a Democrat who has represented the city's 3rd District since January 2006.

What makes it useful is it spells out just how much property is exempt. Over the years, anecdotal accounts have put that amount as high as 50 percent.
Snyder's report dispels any potential exaggerations, Rennia said.

"We've been trying to tell people this information for years. (Property tax exemptions) are not the source of our problems," Rennia said. "I'm glad the numbers are there to back it up." Read more here.

Nonprofit Resources Regarding the Oct. 15 Deadline

Time is running out for small nonprofits facing loss of tax-exempt status because they have not filed Form 990-N or Form 990-EZ for three consecutive years. The deadline for the IRS's one-time filing relief program is October 15, 2010. After that, nonprofits that are required to file a 990 and whose filings are at least three years in arrears will automatically lose their exemptions. To regain tax-exempt status, they will have to apply to the IRS all over again, a process that can take several months and requires payment of fees. To help you make sense of the rules and regulations surrounding this program, GuideStar is offering you a few resources:

• GuideStar Resource Center: includes articles and links to keep you updated in this ongoing process.
• IRS Communications Toolkit: includes facts outlining the situation, a list of organizations IRS records show are at risk, a YouTube video, and a widget for posting on Web sites.
• Guide Star Charity Check: includes information on exemption status of organizations and is updated as more information from the IRS becomes available.
  

States Look at Revoking Nonprofits Tax Exemptions

The NY Times reported that faced with steep declines in tax revenue, an increasing number of states and localities are considering eliminating various tax exemptions for nonprofit groups.

A bill before the Hawaii Legislature, for instance, would require charities to pay a 1 percent tax, and Kansas is considering making them subject to sales taxes.

Revoking the nonprofit organizations’ exemptions from property taxes is also under scrutiny in several counties in Kansas, as well as in Pennsylvania.

And last fall, Minneapolis made charities subject to the fees it charges businesses and residents for streetlights in hope of gaining an additional $155,000, an exercise Jon Pratt, executive director of the Minnesota Council of Nonprofits, describes as “looking under the sofa cushions.”

In most cases, churches would be exempt from the tax measures, but all other nonprofit groups, including private schools and colleges, would be affected.

City and state officials say they have no choice.

“We’re having to look at the public services nonprofits use and how we can adequately cover those costs,” said Matt Greller, executive director of the Indiana Association of Cities and Towns. “We can’t give them away for free any longer.”

Nonprofit groups say the moves to wring revenue out of them are shortsighted and will produce cutbacks in critical services that governments rely on them to provide, like mental health and emergency foster care services.

“Nonprofits are really hurting in this economy,” said Tim Delaney, chief executive of the National Council of Nonprofits, a trade association. “Their revenues are down, too, and demand for the services they provide, services that government expects them to provide, is way up.” Read more here.

A Wild 2010 Ahead, Too

The National Council of Nonprofits, the national umbrella of the NY Council of Nonprofits, offered the following information about 2010 challenges.

"Governments in Crisis"
The Chronicle of Philanthropy just published its forecast of the Top 10 issues nonprofits will face in 2010. So what does the Chronicle see as the nonprofit sector's most pressing issue? "Governments in Crisis." The Chronicle identified the following trends behind this top issue: state spending cuts, the end to stimulus money, and county and local budget crunches, all of which add up to "more cash-strapped local [and state] governments may try to seek money from nonprofit groups." The article quotes the President of the National Council of Nonprofits, who advised: "Leaders of nonprofits must get engaged in the policy process because this problem is not going away."

New Tool: Treasure Trove of Data
To help make their policy arguments, nonprofit leaders should become familiar with a fresh report issued by the Congressional Research Service, entitled "An Overview of the Nonprofit and Charitable Sector" (R40919; November 17, 2009). This new report contains a variety of gems that nonprofits can use to help state and local policy makers, journalists, grantmakers, and the general public have a better understanding of the nonprofit sector, including:

• The "significant" role nonprofits play in the U.S. economy: "the charitable sector is larger than the construction industry" and "larger than the finance and insurance and real estate industries combined. [page14]
• Nonprofit organizations actually pay many taxes. For instance, "tax-exempt organizations are subject to tax on income from business activities unrelated to their exempt purpose. … Additionally, tax-exempt organizations must generally pay the same employment taxes (i.e., withhold income and payroll taxes of their employees) as for-profit employers." [page 3]
• Sector-wide, private contributions (from individuals, corporations, and foundation) account for only 12% of nonprofit revenues, with earned income/payments for services (49%) and government grants and contracts (29%) being much larger. [page 17]
• "Another major pressure on nonprofits during the recession has been the decline in support by governments (primarily state governments), including delays in payments. A recent survey of nonprofit organizations found that 35% have experienced a loss in government support while 37% reported experiencing delays in government payments." [page 30]
• "[N]onprofits continue to feel the pressures of increased demands for their services coupled with decreasing revenue. More than a third of nonprofits have had to cut operations." [page 34]
• "Overall … it appears that governments, particularly state governments, may be contributing to the financial difficulties of nonprofit organizations, even to the point of not paying for contracted services." [age 35]
• "In the recent economic crisis, states reduced funding to nonprofit … organizations and in some cases were delinquent on payments. … If there were a spotlight on states' behaviors, especially states not making their contract payments on time, they might be less willing to address their short-term cash-flow problems in this manner." [page 54]

Binghamton mayoral candidates offer different belt-tightening solutions

The Press & Sun-Bulletin reported that Democrat Matthew T. Ryan, Republican Rich David and Independence Party candidate Douglas Walter Drazen all agree on one thing: The city is going to continue to face serious financial issues no matter who is elected mayor.

One reason is costs outside of the city's control, such as the economic recession and rising pension costs. But belt-tightening is needed, they said.
Their approaches differ.

Nonprofits are one area of focus. Douglas Walter Drazen's campaign has stressed the need for nonprofit organizations to pay a greater share of the cost of city government. If elected, his administration would aggressively pursue having nonprofit property owners make voluntary payments in lieu of taxes. Read more about other candidate viewpoints.

Drazen plans to 'aggressively pursue' voluntary nonprofit payments

The Press & Sun-Bulletin reported that mayoral candidate Douglas Walter Drazen plans to use to generate revenue from nonprofit, tax-exempt organizations.

"Additionally, unlike the current administration, and its predecessor, which made a half-hearted effort in 2004 known as the 'Fair Share Program,' my administration will aggressively pursue voluntary payments from 'nonprofit' property owners," said Drazen, who also proposes selling Ely Park golf course. "Metro-Interfaith, which operates elderly housing in Binghamton, makes such a payment every year, and would be a good model to follow."

Drazen said he will hold weekly press conferences praising groups such as Metro-Interfaith and shaming those who don't pay.

He also proposed stopping garbage pickup for nonprofits and asking city council to enact a local law, pursuant to New York State Real Property Tax Law 420-b, which allows local taxation of certain "nonprofits."

Republican candidate Rich David also embraces the idea of reinstituting the "Fair Share Program" started by former mayor Richard A. Bucci, for whom David worked.

David said the Bucci administration set the ground work, but current Mayor Matthew Ryan didn't continue pursuing the program.

Ryan, a Democrat, said he doesn't think "Fair Share Program" is a good idea.
"I find that hard to believe he really believes he is going to shame people into giving money," said Ryan. "These groups don't deserve shame. If it wasn't for these not-for-profits some of the most vulnerable would be even more vulnerable."

In 2008, Ryan's office identified $58.2 million in tax-exempt property. Of those properties: 44.2 percent are government and 17 percent are religious organizations. Altogether, the city determined 31.6 percent of its properties in 2008 were tax exempt.

"Even if you are going to tax some of these groups the money is minimal," said Ryan.

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