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In this week's issue...
This week’s edition opens with some slightly good economic news (a small state revenue surplus) and some bad economic news (another report of a decline in charitable giving). We also share information about a recent congressional hearing on adding a citizenship question to the Census and on potential nonprofit issues in the upcoming state legislative session. We know that many readers are anxious to hear details about the forthcoming U.S. Department of Labor overtime rule. The final rule still hasn’t been published (at least at the time this email was sent), but we promise to share details and analysis as quickly as possible.
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North Carolina Has Small Revenue Surplus Heading into 2024 Short Session
This week, economists at the NC General Assembly and NC Office of State Budget and Management released an updated forecast for state revenue. For the current fiscal year (which ends on July 1, 2024), the economists anticipate that actual revenue will be about $413 million higher than was projected in last year’s state budget, and for FY2024-25, they expect the state to have a $1 billion revenue surplus. This means that state legislators will have some flexibility to make additional investments of state funds as they consider adjustments to the state budget for FY2024-25 when they begin the 2024 short session next Wednesday. Legislators could use extra revenue for a variety of purposes, including:
- Easing the “child care cliff” that is expected when temporary expanded federal funding for child care ends on July 1. Without significant additional state funding this year, the current shortage of affordable, accessible, high-quality child care – which affects nonprofits as both employers and service providers – could get much worse.
- Providing more earmarked appropriations to nonprofits and local governments. Typically, earmarks in the budget go primarily to nonprofits in influential legislators’ districts and don’t have an application process. Last year’s state budget included more than $1.5 million in direct appropriations to more than 600 nonprofits.
- Accelerating state income tax rate cuts that are already scheduled to reduce the tax rate from 4.75% this year to 2.49% by the end of the decade. Further tax rate cuts could ultimately lead to budget cuts for nonprofits later this decade and into the 2030s.
- Providing additional funding for the Opportunity Scholarship program, which provides vouchers that families can use to cover tuition to (mostly nonprofit) private schools. Nearly 72,000 families applied for the significantly expanded voucher program this year, and thousands are expected to be on the waiting list unless legislators provide more funding for scholarships for the 2024-25 school year.
During the short session, legislators also can take action on a variety of other bills that passed either the House or Senate in 2023 or that affect state taxes or spending. Among the bills eligible for consideration are legislation to exempt nonprofits from paying sales tax on their purchases and to modernize the NC Nonprofit Corporation Act. In a recent NC Health News story, two influential legislators suggested they are considering changes to laws related to hospitals’ property tax exemption and sales tax refunds. Legislation affecting nonprofit hospitals could ultimately have implications for all 501(c)(3) nonprofits. And legislators could revisit other legislation affecting nonprofits this spring, such as a 2022 bill (that was ultimately vetoed) that would have created a controversial donor privacy law in North Carolina.
The Center will continue to advocate on nonprofits’ behalf on these and other issues, and we will keep you posted with any developments and/or opportunities for your nonprofit to take action.
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New Report Includes More Bad News About Charitable Giving
Last week, the Fundraising Effectiveness Project released its data on charitable giving during the fourth quarter of 2023, and it’s bad news. Among other things, the report found a 2.8% decline in total giving in 2023 compared to 2022, as well as a 3.4% drop in the number of donors. The report highlights the need for Congress to establish a universal charitable deduction that would help offset recent reductions in individual philanthropy by encouraging people to give more generously to nonprofits.
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Register for Nonprofit Policy Conversations
This spring, the Center is hosting a series of Nonprofit Policy Conversations around the state to bring together nonprofit leaders and local elected officials (mostly state legislators) to discuss public policy issues that are important to charitable nonprofits and the people and communities they serve. At each Conversation, the Center provides a briefing on nonprofit sector trends and potential public policy solutions and challenges for nonprofits in 2024 and beyond. Register now for Conversations scheduled for:
- Today (Friday, April 19) from 1:00-3:00 p.m. at UNCW Truist Hall in Wilmington in partnership with QENO
- Friday, April 26 from 10:00 a.m.-12:00 noon at Triangle Community Foundation in Research Triangle Park. Note: Space is limited; register soon.
- Friday, May 17 from 1:30-3:30 p.m. at Pitt County Council on Aging in Greenville in partnership with Heart for ENC
- Monday, May 20 from 10:00 a.m.-12:00 noon at Foundation For The Carolinas in Charlotte
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U.S. House Committee Explores Adding Citizenship Question to Census
Last week, the U.S. House Committee on Oversight and Accountability held a markup on the Equal Representation Act (H.R. 7109), which would require the 2030 Census and future censuses to include a question on citizenship and immigration status. Specifically, the question would require the respondent to indicate whether each member of the household is: “(A) a citizen of the United States; (B) a national of the United States but not a citizen of the United States; (C) an alien lawfully residing in the United States; or (D) an alien unlawfully residing in the United States.” The information would be disaggregated for each state, which would then be used to exclude noncitizens from reapportionment. Excluding residents who are not citizens from apportionment could affect the number of members of Congress from North Carolina and other states.
The Center and other nonprofits have expressed concerns about a possible citizenship question on the Census since its inclusion would lead to a significant undercount, particularly in Latino communities. In 2019, the National Council of Nonprofits submitted an amicus brief in opposition to a previous attempt to include a citizenship question on the 2020 Census, which would have led to an inaccurate count and undermined the ability of nonprofits to provide services to their communities.
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More Than 400,000 North Carolinians Have Health Coverage Through Medicaid Expansion
According to the NC Department of Health and Human Services (DHHS), more than 400,000 North Carolinians have enrolled in health care through Medicaid expansion since it became available in December, with about 1,000 more people enrolling every day. DHHS estimates that more than 200,000 additional North Carolinians may be eligible for coverage under Medicaid expansion. Almost all potential Medicaid expansion enrollees receive services from nonprofits, so it is important for nonprofit organizations to spread the word about Medicaid expansion eligibility and the application process.
The DHHS website includes basic information on eligibility for Medicaid coverage, details of costs and coverage, and free materials to help nonprofits provide clear and accurate information about Medicaid and Medicaid expansion to their clients and communities. Please share this information widely, especially with clients who may now be eligible to apply.
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First Quarter Lobbying Reports Due Today
Nonprofits that are registered as lobbyist principals (and their staff or contractors who were registered as lobbyists) must file their first quarterly reports of 2024 with the Secretary of State Lobbying Compliance Division by today (April 19). All reports must be filed electronically. To help your organization understand the basics of state lobbying laws affecting nonprofits, check out the Center's summary of NC lobbying laws for nonprofits.
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