Nonprofits lobby for fair tax hikes to avoid drastic cuts

Rep. Paul Marquart, DFL-Dilworth, and Sen. Tarryl Clark, DFL-St. Cloud, face a barrage of questions at a Minnesota Council of Nonprofits rally Thursday.
MinnPost photo by Scott Russell
Rep. Paul Marquart, DFL-Dilworth, and Sen. Tarryl Clark, DFL-St. Cloud, face a barrage of questions at a Minnesota Council of Nonprofits rally Thursday.

Mary Jo Schifsky runs Store to Door, a St. Paul nonprofit that provides affordable grocery shopping and prescription delivery service for aging or disabled adults in the Twin Cities. She and a lot of her nonprofit peers are worried. Her program depends on competitive state grants. She has been told — and this comes as no surprise given the economy — that there will be less money for the program next time around.

Store to Door helps people stay in their homes and out of nursing homes. “Our little old ladies don’t have options,” Schifsky said. “If we can’t get their groceries, the state has to find a house for them.”

Schifsky was one of 200 nonprofit leaders who gathered at the Capitol on Thursday as part of the Minnesota Council of Nonprofits‘ Day at the Capitol. This year, MCN has a two-part agenda. First, make sure that the state doesn’t try to solve its $4.8-billion-and-growing deficit through cuts and accounting shifts alone. Fair tax increases have to be part of the fix, its leaders said. They also are pushing a bill to ensure that nonprofits keep the property tax exemption they have had for years.

Cuts are inevitable. Recent news reports tell the story. For instance, the Star Tribune reported on Thursday that downtown Minneapolis’ top 20 businesses cut 3,355 jobs or nearly 7 percent of the downtown work force last year. If the state’s blue chip companies are being hit, nonprofits expect to get hit as well. The question is how much.

“Like every nonprofit, we’re sweating bullets,” said Catherine Perrault, director of business development for Crisis Connection, a crisis counseling service.

MCN’s Day-at-the-Capitol events included morning briefings at the Best Western Kelly Inn, a noon rotunda rally and one-on-one afternoon meetings with senators and representatives. The goal was 100 meetings with 100 legislators. Many nonprofits are prepared to make the cost- saving argument: If the state doesn’t fund their programs it should expect costs to shift to other budgets — more Medical Assistance costs, more emergency shelter costs or more nursing home costs.

Marcia Avner, MCN’s public policy director, encouraged participants to make their appeals local. Speaking during the morning session, she said that raising taxes would likely require overriding a governor’s veto. And the only way to do it is to make sure that Republican and Democratic legislators across the state understand the impact of deep cuts on their own districts — and how important it is to mitigate those cuts with new revenue.

“There is a great deal of hope that there are people who will understand that if they lose a key facility in their district, the economic harm — the personal harm — to individuals in their district will be extraordinary,” she said. “And they will vote their district.”

Property tax exemption
Not that many months ago, MCN’s hot topic was property taxes. A late 2007 Minnesota Supreme Court ruling seemed to threaten some nonprofit property tax exemptions. MCN scrambled in the 2008 session to get a moratorium on changes. And that moratorium bought time.

Now it has draft legislation and bill authors for a proposed fix. Assistant Majority Leader Sen. Tarryl Clark, DFL-St. Cloud, and Rep. Paul Marquart, DFL-Dilworth, will carry it. According to Marquart’s brief comments in the rotunda, MCN, the Minnesota Department of Revenue and assessors are all on the same page. Nonprofits will undoubtedly have to work to get it passed, but given the economic troubles the property tax bill seems a lesser challenge than raising revenue.

Nonprofits are not only worried about losing direct funding from the state. They are worried about the ripple effects from other state budget decisions, such as cuts to local government aid (LGA), which hit cities and counties. That will cut contracts nonprofits have with local units of government.

Where’s our stimulus?
There was some buzz about the federal stimulus package and what it might mean for nonprofits’ ability to maintain services as the demand grows.

Catherine Jordan, president and chief executive officer of AchieveMpls, said in an interview that a recent version of the stimulus package cut funding for summer youth jobs programs. AchieveMpls runs STEP-UP, a summer youth jobs program. “We are lobbying to get it back in,” she said.

Jon Pratt, MCN executive director, said stimulus funding could help some nonprofit programs, such as weatherization or early childhood.

“But I think the main story is you want successful economic recovery, as opposed to focusing on these smaller pieces,” he said. “We need the economy to recover.”

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