November 16, 2017; Wisconsin Public Radio
At the risk of getting granular in the face of two tax proposals, coming from the House and the Senate, that are overall a very bad deal for the majority of Americans, this newswire looks at just one element of one of those proposals to make a point: There are some supports to facilitate your advocacy on these measures, so use them well. In another newswire today, Michael Wyland describes what the process will look like going forward and how to weigh in.
All month, NPQ has been highlighting various components of H.R. 1, the House Tax Reform Bill currently being discussed in Congress. Even putting aside the juxtaposition of permanent tax cuts for corporations and temporary tax cuts for regular folk, and the measures that would gut the ACA, there is a basket of unwelcome provisions specifically for nonprofits. From reduced incentives for charitable giving to an all-out repeal of the oh-so-important Johnson Amendment, there are numerous inclusions that, if passed, would severely limit nonprofit operations, as we know it.
Here’s just one in the financial realm: H.R. 1 includes a provision that would eliminate tax-exempt, private activity bonds. For entities that deal in serious capital projects, like schools, hospitals, and affordable housing organizations, this would take a reasonable financing vehicle right off the table. Losing this exemption would make borrowing for these projects considerably more expensive and thereby limit the amount of development in these areas.
The cost of borrowing for nonprofit groups could increase by as much as 25 to 35 percent, said Dennis Reilly, executive director of the Wisconsin Health and Educational Facilities Authority. Reilly said current law allows them to borrow money at lower interest rates.
Rolf Wegenke, president of the Wisconsin Association of Independent Colleges and Universities, acknowledges these greater costs would only get passed on to the end user, in their case, already-strapped and debt-ridden college students. “It would add to the cost of borrowing, which adds to the cost of going to college,” said Wegenke. “Private colleges are not supported by the taxpayers. So we’re dependent on money we can raise privately and everything just got more expensive for us. We literally have no choice but to pass that on.”
The promulgation of so many serious assaults on nonprofit exemptions, compensation, and independent governance has resulted in the national sector associations standing side-by-side in protest. Independent Sector, the Council on Foundations, and the National Council of Nonprofits have come together in united opposition to H.R. 1.
To stay up-to-date and to monitor the actions of both bodies of the U.S. Congress, keep a close watch on the National Council of Nonprofits’ spreadsheet detailing the House and Senate positions in their respective tax bills. Nonprofits need to be arguing that to build a better house, we need all the tools in the toolbox!—Jeannie Fox