December 19, 2019
Federal Budget News
Later this week, Congress is expected to finish its work for the year and it will include some significant results that matter to NYS Council members and the people they serve. Government funding is currently slated to run out on Dec. 20. A vote on the spending bill has not yet occurred, but it is expected to pass this week to avert a shutdown.
Below is a summary of changes to the Tax on Nonprofit Transportation Benefits, and the CCBHC Program. Also below you’ll find a brief summary and links to the Consolidated Appropriations Bills.
Other agreements of note include an extension of a collection of expired tax breaks, and bills to fund the federal government through the 2020 fiscal year that started on October 1, 2019. All of these provisions are being wrapped up into two appropriations bills, nicknamed Mini-bus #1 and Mini-bus #2
OASAS SOR Grant recipients should be sure to see the note at the bottom of this communication!
TAX ON NONPROFIT TRANSPORTATION BENEFITS
First, legislation that repeals the tax on nonprofit transportation benefits passed the House of Representatives this afternoon as part of a large bill that also includes hundreds of billions of dollars in funding for several federal departments and a package of other tax provisions (H.R. 1865). The 2017 tax law imposed an unrelated business income tax of 21 percent on the expenses nonprofits incur for providing employee benefits like subway and bus passes and employee parking. The House-passed provision, if approved by the Senate and signed by the President, would repeal the tax retroactively, thus treating the liability as if it never happened.
For nearly two years, members of the NYS Council alongside nonprofits across the country have called, written letters, emailed, tweeted, and traveled to DC to explain the harmful consequences on the tax on nonprofit transportation benefits. In the early hours of Tuesday, December 17, the House Rules Committee posted a 58-page package of amendments to H.R. 1865, one of the two large appropriations bills. The provision of greatest interest to most charitable nonprofits, houses of worship, and foundations was the very last one, Section 302. Meaning that it’s the last item on the last bill likely to be enacted in 2019.
Operations Note: Once enacted, nonprofits that paid the benefits-related unrelated business income tax will be entitled to a refund of the taxes paid, but not the administrative and accounting expenses incurred in calculating it. While filing amended tax returns is the normal way to claim refunds, the IRS may be convinced to develop an alternative or streamlined approach in the near future.
Congress released draft legislative text of a deal to keep the government funded for the remainder of FY 2020. Packaged with the spending bill were a number of short-term health care program extenders, including an extension of the 8-state CCBHC demonstration for an additional five months, to May 22, 2020. The bill also provides a $50 million increase to SAMHSA’s CCBHC Expansion Grants, bringing the total allocation for CCBHC grants to $200 million.
Although the proposed 2-year extension and 11-state expansion of the program were not included, the latest deal is still an important sign of progress. There remains significant bipartisan support for a longer-term extension and expansion. It has been packaged with other health care program extensions, with the expectation that spending on these policies must be offset by cuts elsewhere. Unfortunately, Congress has not yet reached agreement on the offset, meaning that the whole package of extenders has been pushed to May to give negotiators time to work out a deal. We will stay in touch about additional opportunities for advocacy!
Meanwhile, as CCBHC Expansion Grantees enter into the final year of their grants, we are pleased to see funding for these grants increased. The National Council continues to advocate for current grantees’ funding to continue beyond two years so that no CCBHC will experience a funding cliff.
FUNDING THE GOVERNMENT
Certainly not the least of Congress’ achievements this week will be the passage of all 12 appropriations bills that fund the federal government in two separate bipartisan measures. In total, the two bills spend $1.4 trillion in fiscal year 2020, providing $49 billion in extra funding across the government. Passage of these bills before Friday, December 20 will avert a federal government shutdown due to the expiration of a short-term funding bill.
- R. 1158, The Consolidated Appropriations Act, 2020: The first bill funds the federal Departments of Commerce, Defense, Homeland Security, Justice, Treasury, and general government operations. See division-by-division analysis. Price tag: $860 billion
- R. 1865, The Further Consolidated Appropriations Act, 2020: The second bill provides appropriations for the remaining federal departments and programs. The legislation contains numerous spending hikes of interest to charitable organizations, including an increase of $3.5 million for AmeriCorps, $5 million more for the emergency Food and Shelter Program, and a $7 million increase for the Volunteer Income Tax Assistance (VITA) program, to highlight a few. H.R. 1865, as amended also includes the tax measures discussed above, as well as several other policy changes, such as an increase in the minimum age for purchasing tobacco products. See division-by-division analysis. Price tag: $540 billion.
These bills have passed the House and are expected to be enacted by the end of the week. But many intervening events, including caustic partisanship, can still interfere with these expectations.
In the federal appropriations agreement, the report language for the State Opioid Response (SOR) Grants has clarified that the SOR grants can be used to prevent and treat addiction to stimulants in addition to opioid response:
“$1,500,000,000 shall be for State Opioid Response Grants for carrying out activities pertaining to opioids and stimulants undertaken by the State agency responsible for administering the substance abuse prevention and treatment block grant under subpart II of part B of title XIX of the PHS Act”
This clarity and flexibility will allow states an opportunity to better respond to the challenges facing their communities.