Policy Update: The American Rescue Plan & President Biden's Next Budget
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 federal government and policy that may be of interest to the nonprofit community.
Cities, Counties, and States are Considering How to Spend American Rescue Plan Act Funds
The American Rescue Plan Act allocated $350 billion for state and local fiscal recovery. Cities, counties, and states have flexibility in how to spend their funds and on what to spend their funds. Aid for nonprofit organizations is one of many eligible uses; nonprofit organizations might consider contacting their elected officials to communicate needs of their organizations and their communities.
Learn more.
Missouri Cancelled its Unemployment Relief Programs
Governor Parson announced the state will end participation in all federal pandemic-related unemployment insurance programs effective June 12th at 11:59pm. This includes the Emergency Unemployment Relief for Governmental Entities and Nonprofit Organizations, which provided federal funding for 50% of benefits paid by reimbursing employers.
Learn more.
Both Kansas and Missouri State Legislatures Ended their 2022 Sessions
Missouri’s state legislative session ended on May 14th, 2021. Notably, the General Assembly failed to fund voter approved Medicaid Expansion, but did establish a prescription drug monitoring program, limit police chokeholds, and approve Missouri to collect more tax revenue from online retailers. Also of note for nonprofits who drive, is a 2.5 cent-per-gallon tax hike starting in October. This will come with an option for Missouri drivers to apply for a refund, if receipts are supplied.
Learn more (Missouri).
In its state legislative session, Kansas passed a tax reform bill, overhauled the state’s emergency management code, and modernized its unemployment insurance. However, it failed to expand Medicaid. Members of the Senate also failed in their effort to limit the ability of employers to require immunizations, but did succeed in their push to ban vaccine passports.
Learn more (Kansas).
President Biden Released his FY22 Budget Request
The president’s proposal includes $6 trillion of federal spending, including a 16% increase in domestic spending and changes in several tax laws. Presidential budgets are not binding on Congress or the administration; they are a statement of the president’s priorities and aspirations. One of the key omissions, not in the bill, was a proposal to limit the value of itemized deductions, including charitable contributions, to 28%. This is a win for the charitable community that has opposed the proposal since it was included in President Obama’s first budget request in 2009.
Learn more.
- Major Spending Increases proposed:
- Department of Education (41% increase)
- Department of Health & Human Services (23% increase).
- IRS (10% increase)
- Tax Policy Changes proposed:
- Hike in corporate tax rate to 28% (up from 21%)
- Request for numerous clean energy tax credits
- Increase the top marginal individual tax rate to 39.6% for individuals earning more than $453,000 and couples earning more than $509,000
- Tax long-term capital gains on adjusted gross income of more than $1 million at the 37% tax rate
- Recognize the increase in value of appreciated property at time of donation or death and make immediately taxable, with exceptions for family-owned and -operated businesses
Last week, Senate Republicans proposed a $928 billion infrastructure package called the Republican Roadmap. One suggestion for paying for it is to repurpose funding from previous COVID-19 relief packages. This is the latest counteroffer to President Biden’s American Jobs Plan, a set of infrastructure proposals that would cost $2.2 trillion, originally published in March. Whether policymakers take the bipartisan path or the partisan path on the President’s top agenda item will determine which, if any, of the nonprofit policy priorities can be attached and enacted this year. Further, how any infrastructure bill will be financed could affect other nonprofit priorities.
Learn more.
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.
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