Policy Update: Debt limit, Federal Grants, and State Legislative Wrap-Ups

Nonprofit Connect works to keep Members updated on policy changes that affect nonprofits through Policy Updates. These messages provide brief information on what is going on in the federal government and policy that may be of interest to the nonprofit community.
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Default on Federal Debt Could Mean Increased Demand for Nonprofits
The debt ceiling is the Congressional limit on the amount of debt the federal government can amass. Unless the debt ceiling is raised again, Treasury Secretary Yellen has indicated the government could run out of money to pay back its debt as soon as June 1. If the President and House Republicans cannot reach a deal and the government defaults on its debts, that could lead to a government shutdown of essential services – driving people to nonprofits for those services instead – and potential delays in grant and contract payments to nonprofit vendors. While the House is moving forward on spending bills, the Senate has paused until the debt ceiling negotiations are complete.
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Congress Considers Making Federal Grants More Accessible
On May 2nd, the Senate Homeland Security and Governmental Affairs Committee held a hearing related to reforming federal grants toward increased transparency, efficiency, and accessibility, especially for underserved communities. Testimony relayed the challenges organizations face in applying for funding, and offered suggestions for improvement such as increasing flexibility, adding clarity around grant expectations, and launching a helpline for assistance before and after receiving awards. More hearings may occur on this topic, leading to legislation with solutions. One bill that has already been introduced that includes some grant improvement efforts is HR 3245, the Nonprofit Stakeholders Engaging and Advancing Together Act of 2023.
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Missouri Legislative Update
The Missouri legislative session wrapped up on May 13th. Two major bills that passed particularly impact individuals who are transgender - one bars transgender athletes from playing on sports teams that align with their gender identity, and another prevents minors from accessing gender-affirming care. These statutes will subset after four years. The General Assembly passed pieces of legislation that make it illegal to text and drive, that incentivizes movie production in the state, that extends Medicaid coverage for new mothers, and that makes reduction in benefits more gradual when income increases. In the budget, $2.8 billion goes to expanding I-70 to three lanes throughout, and childcare subsidies were expanded; a surplus led to the largest budget in state history. Conflict within the Republican party left some issues on the table, like sports betting, education policy, a corporate tax cut, and an attempt to increase the percent of the vote needed to change the state constitution.
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Kansas Legislative Update
Veto session occurred at the end of April. Prior to the break, the legislature passed a tax bill that included zero state sales tax on food starting January 1, 2024, but the bill was vetoed because the Governor does not believe the included flat tax is fiscally responsible. The legislature tried, but failed, to override this veto. Governor Kelly had also vetoed three anti-abortion bills, five anti-transgender bills (though one banning transgender athletes from women’s sports has already been overridden), and a bill that would eliminate the grace period for mail ballots to arrive and be counted. The legislature overrode an abortion bill, so now healthcare providers will face criminal punishment if they do not exercise the same care for an infant delivered during an abortion as they would for a live birth. They also overrode a bill increasing the work and job training requirements for older Kansans to quality for food assistance. The “women’s bill of rights” legislation and a bill related to inmate gender separation – laws that define an individual’s sex as their biological sex at birth – were both overridden. The legislature also passed an education funding bill that fully funds K-12 education.
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Read more: From the National Council of Nonprofits: Nonprofit Champion May 15, 2023

This post was written by Kristen Wood, Nonprofit Connect's Advocacy Contributor.
Kristen is an avid participant in Kansas City’s nonprofit community and a self-proclaimed ‘lifetime learner’. In addition to working for Goodwill of Western Missouri & Eastern Kansas, she enjoys following nonprofit policy issues.

Advocacy, Public Policy

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