VT Legislature & Federal Policy Update

In Vermont, Senate Appropriations voted their amended budget out of committee last Friday, an indicator that the session is now in its final weeks. Here are some quick updates on VT bills and issues we’ve been following, but since things are likely to change quickly, use VT Digger’s Bill Tracker to monitor bills’ movement towards the finish line.

And…scroll down for federal policy updates on nonprofit priorities from National Council. **If you haven’t already, make sure to read and sign the nonprofit community letter!**

VT Nonprofit Legislative Highlights

  • Senate Appropriations has proposed increased funding for community-based mental health agencies, raising reimbursement rates by 1% from the House-passed budget to 8%. Better, but still not the 10% being sought.
    • If your nonprofit provides contracted/state grant funded government services, Common Good VT wants to hear from you! Email [email protected] if you’re interested in strategizing with others from across the state to advocate for increased funding.
  • Senate Appropriations increased total spending for “Investments in Vermont’s Economy, Workforce (includes H. 703) and Communities” from the House version, including appropriations for H. 703, the Workforce bill; H. 159, the Omnibus Economic Development bill; and H. 624, the arts and culture recovery bill. Even so, nonprofit priorities have seen cuts.
    • At this point, all three bills (H. 703, H. 159 & H. 624) are still moving separately, but H. 159 now includes a placeholder appropriation for workforce initiatives and a $5M carveout for the creative sector under the VEDA forgivable loan program.
    • H. 159 was cut back by Senate Appropriations, with implications for nonprofits. The VEDA forgivable loan program was cut back by about $2M, and the Capital Investment grant Program was cut entirely. The $16.5M for a COVID-19-Related Paid Leave Grant Program still remains.
  • Senate Finance plans to cut back the child tax credit package by at least $12M from the House’s $49.7M. Read more here.
  • The House Committee on General, Housing and Military Affairs has made changes to two housing related bills – S. 226 & S. 210. Read more here, but one significant change is that the builder subsidy (for when it costs more to build a home than it will be appraised for) can be passed on to a nonprofit if it will protect the home’s affordability.

Federal Policy Updates

From National Council:

Nonprofit policy priorities, articulated in the nonprofit community letter, focus on nonprofit-specific policy solutions that would provide disaster relief, address nonprofit workforce shortages, and promote volunteerism to aid our communities. The specific relief nonprofits seek includes restoration and improvement of the universal charitable deduction, renewal and enhancements to the Employee Retention Tax Credit, and better tax treatment of volunteers who drive on behalf of charitable organizations. So, where do things stand? Here’s a quick recap:

  • Restored Giving Incentives: Support has slowly, but steadily been growing for the principal bill to restore and improve the universal charitable deduction that was first enacted under the CARES Act in 2022 but that expired at the end of 2021. Both the Senate and House versions of the Universal Giving Pandemic Response and Recovery ActS. 618/H.R. 1704 enjoy sponsors from both sides of the political aisle.
  • Employee Retention Tax Credit: Responding to concerns from nonprofits and for-profit businesses, 80 Representatives from both parties sent a letter to IRS Commissioner Rettig urging him to expedite processing of claims by employers for the Employee Retention Tax Credit. The letter, led by Reps. Levin (D-MI) and Miller (R-WV), states, “The IRS must do all it can to ensure that ERTC claims are processed as quickly as possible, and those payments are sent out immediately.” On the legislative front, sponsorship of the bill to restore the ERTC for the fourth quarter of 2021, H.R. 6161 and S. 3625, continues to gain bipartisan supporters.
  • Child Care: This month, more than 100 Senators and Representatives sent a letter to President Biden urging his administration to address the on-going child care crisis and “realize his vision for a better America by investing in the child care sector.” The signers, all Democrats, are calling for urgent passage of the President’s plan to reduce child care costs for families down to 7 percent of their annual income, provide universal pre-K to all 3- and 4-year-olds, and invest in the early childhood workforce and its infrastructure. The call for action by the Members of Congress is in alignment with the nonprofit coalition’s letter to the Hill, which states: “As employers and, in many cases, child care providers, charitable nonprofits are deeply concerned that the lack of child care and equitable wages are impediments to all; as one expert said on a recent Federal Reserve webinar, ‘There is no recovery of the economy without child care.’”
  • Student Loan Relief is seen as a vital policy solution to curbing the nonprofit workforce shortage. In response to intensive lobbying from the nonprofit and government sectors, the Department of Education announced that it is overhauling the Public Service Loan Forgiveness (PSLF) program to provide a path to relief for more borrowers working at nonprofits and other public service positions. The Department also recently announced extending “the pause on student loan repayment, interest, and collections through August 31, 2022” by placing federal loan borrowers in forbearance with 0% interest rates. Learn more by watching the recent Accessing Public Service Loan Forgiveness webinar.
  • Volunteer Drivers: Nonprofits point to high gas prices and poor tax incentives as two reasons volunteerism has not returned to pre-pandemic levels at many organizations. As a partial solution, Rep. Stauber (R-MN) introduced the Volunteer Driver Tax Appreciation Act of 2022 (H.R. 7432), a bill that would raise the volunteer mileage rate (fixed in statute 25 years ago at 14 cents/mile) to the standard business rate (currently 58.5 cents/mile) for volunteers who drive their vehicles on behalf of charitable nonprofits to transport property or individuals. In his news release, Rep. Stauber explained, “By increasing the mileage rate for volunteer drivers and lessening the burden for them, more people will be donating their time to help their fellow community members.