April 15, 2012; Source: MSNBC
What will a Romney presidency mean for the nonprofit sector? There is no one hard and fast answer, but Mitt Romney made some comments about his post-election intentions, should he win in November, which should be of interest to nonprofits in the housing and community development arena.
At a supposedly closed-door fundraiser in Palm Beach, Fla., former Massachusetts Gov. Romney suggested that he might eliminate the Department of Housing and Urban Development (HUD), though unlike other Republican presidential candidates, he seems interested in keeping the Department of Education to be used as a tool by his administration to counterbalance teachers’ unions.
Nonprofits and government agencies sometimes develop symbiotic relationships. The nonprofits get used to working with a specific agency’s structure and procedures, and the agency gets used to a constituency of nonprofits that know the business. For nonprofit community development corporations, nonprofit housing development groups, and others, the elimination of HUD could be a game-changing element in the U.S. nonprofit sector.
Romney did float a couple of other ideas that might make some nonprofits shudder. He suggested that he would tinker with tax deductions such as the mortgage interest deduction (eliminating the inclusion of second homes) and the deduction for state and local taxes (eliminating it entirely), but he didn’t mention, according to the MSNBC report, the charitable deduction. Romney’s willingness to parse the deductions is in contrast to President Obama’s proposed cap, which would apply to all deductions by higher income taxpayers.
Romney thought these were private remarks made to the intended donors of his new “Victory Fund,” the vehicle his supporters are creating to advance his candidacy against Obama. As a result, we might assume that there is a bit more candor here than in his stump speech. If so, the charitable deduction doesn’t appear to be in any immediate danger in a tax reform agenda to be pursued by a would-be President Romney, but the Department of Housing and Urban Development would seem to be in big time trouble.—Rick Cohen