AFP Chicago Government Relations Update


October 2013
Submitted by Krista Ravenscraft

FEDERAL

House Approves Cutting Nearly $40 Billion From SNAP Votes of Illinois representatives split according to party:  On September 19, the U.S. House by a close vote of 217-210 approved their version of a measure which would reduce SNAP benefits by nearly $40 billion over a ten-year period.  Should the Senate approve the equivalent of the “Nutrition Reform and Work Opportunity Act ,” at least 3.8 million individuals will lose food benefits the first year alone.  An average of 2.8 million will lose benefits annually for the subsequent nine years.   In addition, approximately 55,000 jobs will be lost the first year.  Source:  The Congressional Budget Office (non-partisan).

This measure also removes governors’ discretion to waive enrollment requirements for their state’s applicants.  It adds the requirement that all recipients undergo periodic drug testing, as well as accumulate work hours, in order to remain eligible.

In response, Robert Greenstein, President/Founder of the Center on Budget and Policy Priorities, issued a statement: 

                 “...By cutting food assistance for at least 3.8 million low-income people in the coming

                  year – including some of the very poorest Americans, many children and senior citizens,

                  and even veterans (170,000 projected) – this cruel, if not heartless legislation could

                  jeopardize a vital stepping stone to many families who are still struggling to find work,

                  or who depend on low-wage jobs. 

                  “   As the nation slowly climbs out of the deepest recession in decades –with 22 million

                  people still unemployed or underemployed – millions of families rely on SNAP to help

                  feed their children…”

 

He pointed out that recipients were already preparing for an across-the-board cut in November which would reduce their “modest” benefits to less than $1.40 per person per meal.  Twenty-two million children, nine million seniors, and substantial numbers of  people with disabilities will be affected. Greenstein rued the loss of the decades-long nonpartisan commitment to reducing “hunger and hardship.” 

Progress Illinois (19 Sept. 2013).  U.S. House votes to cut SNAP by nearly $40 billion. http://progressillinois.com/news/content/2013/09/19.   See also, Hinz, Greg (19 Sept. 2013). Area congressmen blow it on food stamp vote.  Blog.  Crains Chicago Business. http://chicagobusiness.com/article/20130920/BLOGS02/130929990.

Other projected results of the bill if it becomes law include 210,000 school children losing free lunches (Congressional Budget Office).  Small businesses will also be harmed, since SNAP generated $9 in economic activity for each $5 in spending (2011 data).

In 2011, SNAP lifted 4.7million persons out of poverty, including 2.1 million children.  The following year, 14.5% of all American households still struggled with hunger (25% of African-American households and 23% of Hispanic households).   CAP Action War Room (20 Sept. 2013).  Infographic by Center for American Progress and Half in Ten (Educational Fund Graphic).  Found in, The Progressive Report (20 Sep. 2013).  Reverse Robin Hood.  http://thinkprogress.org/progress-report/reverse-robin-hood.

The vote, characterized by The New York Times’ Editorial Board as “an act of supreme indifference” by House Republicans, followed by two weeks the report of the Agriculture Department that 17.6 million households did not have enough to eat at some time in 2012 because of a lack of financial resources.

Two days earlier, the U.S. Census Bureau had reported that 15% of Americans (46.5 million people) were living in poverty.  The middle class was also struggling despite a reduction in the unemployment rate to 7.8 percent in 2012 from a 9.1% high in 2011.  Median household income remained the same, indicating that a weak economy still existed (ordinarily in a healthy economy, income would rise as unemployment fell).  The decline in the jobless rate was not due to new hiring but instead to a shrinking work force the employed working for years without raises and the unemployed when hired ending up in jobs paying less than previous jobs.

The decline in the jobless rate is also artificially low because of “doubling up,” in which 10.1 million adults age 25-34 who are not in school live with parents or others who are not spouses or partners. If they lived on their own, 43% would fall below the poverty line, $11,945 for someone under 65 in 2012.

From 2000-2012, the median income in working-age households headed by someone under age 65 fell by almost $7,500 (2012 dollars), a 11.6% decline.  The New York Times Editorial Board (19 Sept . 2013).

Another insult to the poor.  The New York Times.  http://nytimes.com/2013/09/20/opinion.

Various Republican congressmen have cited the Bible as justification for their actions, which include adding a work requirement for SNAP recipients.  Congressman Stephen Fincher responded to a Democratic critic with the paraphrase, “The one who is unwilling to work shall not eat.”  This response fails to consider that the average SNAP recipient may actually be a member of the rapidly increasing “working poor.”  As an example, Florida in October 2012 had 1.9 million households receiving food stamps, but 500,000 of them had earned income (9,090 of them received their paychecks from WalMart).  These people work but still can’t feed themselves without food stamps and still pay for rent, medicine, and other expenses.  Recipients say that as a result of previous benefit reductions, benefits only last about two weeks.

A recent audit report by the Department of Agriculture Inspector General found that, contrary to Republican beliefs that food stamps was a wasteful program, it was the farm subsidy program that overspent, by $14.6 million in 2012.  In contrast, SNAP and other hunger alleviation programs had not overpaid any benefits in the form of high-dollar distributions (Congressman Fincher himself received $3.5 million in federal farm subsidies between 1999 and 2012).  Cohen, Rick (11 Sept. 2013). Food stamps facing scheduled cut plus attacks in Congress.  Nonprofit Quarterly.   http://nonprofitquarterly.org/policysocial-context/22885.

The day after the SNAP vote, House Republicans successfully sponsored a stopgap spending bill that would eliminate funding for Obamacare, ten days before the government was set to run out of money (October 1), and a few weeks before the U.S. risked defaulting on federal debt for the first time.  This was the 42nd vote sponsored by Republicans to eliminate President Obama’s health-care law.  Future actions proposed by House Republican leaders include a bill raising the statutory borrowing limit, delaying the implementation of Obamacare by one year, and a variety of other provisions including binding instructions to the IRS to overhaul the tax code, and mandatory construction of the controversial Keystone oil pipeline.  New York Times (20 Sept. 2013).House passes spending bill, setting up showdown with Senate.  NYTimes.com. http://mail.aol.com/38065-111/aol-6/en-us/mail.

Judge Ginsberg First S.C. Justice to Officiate at Same-Sex Wedding:     On August 19, Supreme Court Justice Ruth Bader Ginsberg married a same-sex male couple at the Kennedy Center for the Performing Arts, joining her friend Michael Kaiser, Kennedy Center President, and John Roberts, a government economist.  Kaiser asked Judge Ginsberg to marry them, later explaining, “I think that everything that’s going on that makes same-sex marriage possible and visible helps to encourageothers and to make the issue seem less of an issue, to make it just more part of life.” Judge Ginsberg presides at same-sex wedding (21 Aug. 2013).  ABC News.  The Note. http://abcnews.go.com/blogs/politics/2013/08/21.

Sequestration’s Effects on Housing and Homelessness:    The U.S. Department of Housing and Urban Development (HUD) is attempting to obviate the most severe effects of sequestration cuts by Issuing $103 million in emergency funds to struggling housing authorities across the U.S.  Said amount is less than one percent of the total allocated to housing programs in 2013, and will cover only a fraction of the shortfall.  HUD officials estimate that they will eventually have to remove 100,000 people from housing and shelter programs, one-sixth of today’s homeless population. 

This will partially reverse the 17% reduction nationally in homelessness achieved between 2005 and 2012.  The director of an Iowa city housing department predicted that housing authorities throughout the country would find themselves “in dire straits” as a result of cuts.  “(T)hey have no correlation with the demand for rental assistance, which is only increasing.  The elderly, the disabled, and the very poor… don’t have a lot of alternatives.  This is it.”  Nonprofit Advocacy Matters (9 Sept. 2013).

Sequestration spotlight:  Impact on housing and homelessness.  National Council of Nonprofits. http://mail.aol.com/38023-111/aol-6/en-us/mail. The Wealth Gap Has Widened Since 1993:  Since 2009, 95% of the increase gained by Americans has gone to the top 1%.  George W. Bush’s recovery sent 65% of the benefits to the top 1%, while Bill Clinton’s total was 45%.  For 2012, the income share possessed by the top 1% was 50.4%.  They also bore more of the losses under President Bush than they have under President Obama. 

From 1993 to 2012, the “Clinton Expansion,” the average income real growth was 7.9%. The real income growth of the top 1% was 86.1%, while the rest shared a 6.6% growth.  Under the 2002-2007 “Bush Expansion,” the average income growth was 16.1%, 61.8% going to the top 1%, and 6.8% to everyone else.  In the 2009-2012 “Great Recession Recovery,” average income real  growth was 6.0%, with the top 1% drawing a 31.4% increase and the bottom 99% having increased growth by only 0.4%.  The portion of the increase claimed by the top 1% was 95%.  McCambridge, Ruth (12 Sept. 2013).  A table about this so-called recovery that should make you very angry.  Nonprofit Quarterly.  http://nonprofitquarterly.org/policysocial-context/22890.

In a related story, Forbes’ annual list of the 400 richest people in the U.S. shows that their cumulative wealth has increased by 15% since 2012, from $1.7 trillion to $2 trillion.  This is the largest combined wealth ever for the list, with the average person having a net worth of $5 billion ($4.2 billion in 2012).

The same day that the Forbes list appeared, the U.S. Census Bureau released its annual report on poverty, health insurance and earnings, showing 15% of citizens below the poverty line, and the average income down by 8.3% since 2007.  Households making more than approximately $191,000/year (20%) had recovered most of their losses from the recession, doing as well in 2012 as they had done pre-recession.  The bottom 80% is making significantly less than before the recession.  McCambridge, Ruth (18 Sept. 2013).  Forbes’ Top 400 get much richer in the face of lingering poverty.  Nonprofit Quarterly, from The New York Times.  http://nonprofitquarterly.org/policysocial-context/22922.

Agency Affirms Permissible Nonprofit Political Activity Limits:   The Congressional Research Service (CRS), aka “Congress’ think tank,” is a public nonpartisan political research organization within the Library of Congress, primarily working on behalf of members of Congress, their committees and staff.

Its report, “501(c)(3)s and Campaign Activity, Analysis Under Tax and Campaign Finance Laws,” points out that 501(c)(3) organizations are “absolutely prohibited from participating in campaign activity under the Internal Revenue Code (IRC).”  They are permitted, however, to engage in nonpartisan political activities (such as distributing voter guides and conducting get-out-the-vote drives) which do not either support or oppose a candidate.  Nonprofit organizations may take positions on policy issues so long as they refrain from endorsing or opposing any particular candidates.  Determining whether an activity violates the IRC prohibition depends on the facts and circumstances of each case.  In general, 501(c)(3)s are prohibited from engaging in the type of activities regulated by the Federal Election Campaign  Act (FECA).

Nonprofit attention to political activity increased as a result of the 2010 Supreme Court case Citizens Unite v. FECA.  This decision invalidated several long-standing FECA prohibitions regarding corporate and labor union campaign treasury spending.  The CRS writers state that that case does not significantly affect the political activities of 501(c)(3)s since they are still subject to the prohibition in the Internal Revenue Code.  Kaplan, Larry (10 Sept. 2013).  Permissible nonprofit political activities summarized by CRS.  Nonprofit Quarterly.  http://nonprofitquarterly.org/policysocial-context/22897.          

ILLINOIS

Poverty News:   The Social IMPACT Research Center’s annual Report on Illinois Poverty issued in September, revealing  that nearly one-third (33 1/3 %) of Illinoisans are living at or near the poverty level (22% are children).  This represents a 3.1% increase since 2007.  Seven percent live in extreme poverty, below half of the poverty line ($11,511 for a family of four in 2011, with $23,021 being the 2011 poverty level).  County-level data is available on the linked website (www.ilpovertyreport.org).  Source:  Social IMPACT analysis of data  from the U.S. Census Bureau’s 2011 American Community Survey, 1-year estimates.

The organization Wider Opportunities for Women (WOW) issued a May 2013 report analyzing all 50 states and D.C. for their success in promoting economic security, defined as involving the elements of income, job quality, education and training, savings and assets, and security supports.  Security Supports provide for stability in the absence of good jobs, effective education systems, and responsive labor markets, reducing family costs for health, safety, and stability.  It gave Illinois an overall economic security grade of C, ranking it at number 15 among the states.  Roth, Debra (21 May 2013).  The economic security scorecard.  Wider Opportunities for Women.  http://wowonline.org (pdf).      

Gov. Quinn Signs Legislation Protecting Renters During Foreclosures:  On August 21, Governor Pat Quinn signed into law legislation that will protect renters if the property they live in goes into foreclosure.  Buyers of multifamily properties in foreclosure must allow tenants to stay in their units until their leases are over or up to a minimum of 90 days.  In signing the law, Gov. Quinn said the law was designed to protect renters from sudden, forced moves  which can be disruptive as well as costly.   Source:  Associated Press (22 Aug. 2013).

Illinois Below Average on Health Care for the Poor:   A recent report by the Commonwealth Fund found that based on 30 health indicators, Illinois ranks 36th among the states in its delivery of health care services to its low-income residents ($47,000 annual income for a family of four).As an example, an additional 200,000 LI Illinois residents would get such recommended care as mammograms and flu shots if Illinois was a top-performing state.  Crain’s Chicago Business  (18 Sept. 2013).  Illinois lags on health care for poor:  Report.  http://chicagobusiness.com/article/20130918/NEWS03/13091.

States Face Second Round of Sequester Cuts If Congress Fails to Make a Budget Deal:   Unless Congress is able to reach an agreement on the budget before October 1, another round of state budget cuts will occur.  The areas to be affected range from Meals on Wheels to Head Start (Federal Funds Information for States, or FFIS, a Washington group helping states manage their federal funds).  The federal budget allocates an average of 30% of state revenues, primarily in the form of grants, making it the largest single source of funds for many states.  Future sequestration could affect about three-fourths of these grant programs.   Preliminary estimates are that sequestration cuts to start October 1 would reduce domestic federal spending by $4.2 billion for the 2014 fiscal year, which is less than the $4.6 billion FY2013 cuts.  However, since states have already approved their FY2014 budgets, these cuts will require more scrambling to make adjustments, especially since much of their money is tied to federal grant-making. Areas to be cut include public housing assistance, money for schools with low-income students, food inspection, scientific research grants, and environmental protection programs. Povich, Elaine (21 Aug. 2013).  States brace for new round of sequester cuts.  Pew Charitable Trusts, State and Consumer Initiatives.  http://pewstates.org/projects/stateline/headlines.

CHICAGO/COOK COUNTY

Chicago African and LGBT Activists Protest U.S. Senate Immigration Bill:  Back in June, the Senate struck two provisions from an immigration bill which had allowed Africans and foreign-born gay spouses to enter the U.S.  (the Uniting American Families Act, or UAFA, and the diversity visa lottery program respectively).  These two groups have joined forces to advocate that the deleted provisions be restored.  Although the Defense of Marriage Act (DOMA) defining marriage as between a man and a woman was defeated, only 13 states now allow same-sex marriages, making it more difficult for a gay U.S. citizen to sponsor his/her partner for immigration.

Africans have been one of the fastest-growing immigrant groups in the U.S. over the past decade.   Most have entered the U.S. under the diversity visa program, claiming nearly half of the decade’s 55,000 slots for permanent residency.  Before 1965 and the creation of the diversity visa program (established in 1990), Africans could only come here as students. The Congressional Black Caucus is also concerned about the Senate bill’s effect on Caribbean Immigration.  The bill has since stalled in the U.S. House.  Lynch, La Risa (3rd Sept. 2013). Activists strategize after Senate immigration reform bill alienates Blacks, LGBT community. Progress  Illinois.  http://progressillinois.com/quick-hits/content/2013/09/03.       

Options Reduced for Mayor Budget:   Chicago Mayor Rahm Emanuel’s attempt to pull the Chicago budget out of the red it fell into during his predecessor Richard M. Daley’s term has fewer alternatives as a result of recent financial developments.  First, his chief financial officer Lois Scott is distracted by the departure of former Comptroller Amer Ahmad, indicted in Ohio for accepting kickbacks to steer work.  Scott has been implicated in recommending him for the job although she had financial dealings with him, and possibly in his associate’s big increase in City insurance business.

Pension reform in Springfield has made little progress in months, although Chicago faces a $700 million annual hike in police and fire pension payments in 2015 if the law isn’t changed. The likelihood of a change favorable to Chicago may have motivated Moody’s Investor Service to downgrade its bond rating by two levels and warn of possible additional downgrades in the future.

The deal to privatize Midway Airport has fallen through, not surprisingly since the City Insisted on such favorable terms that all but one investment group dropped out.  An offer may not have been accepted anyway by the City Council, loathe to duplicate the parking meter contract fiasco.   The anticipated millions in revenue from Midway are no longer available for infrastructure improvements or concessions by employee unions on pensions.  Hinz, Greg (11 Sept. 2013).  Financial wolves growling at Mayor Emanuel. Blog. Crain’s Chicago Business. http://chicagobusiness.com/article/20130911/BLOGS02/1309.

Poverty Shift:  Suburban Poverty Doubles in Past Decade to Half of the Chicago Area:  The Social IMPACT Research Center’s annual poverty report also revealed that from 1990 to 2011, the poor in Chicago’s suburbs increased from one-third to one-half of the Chicago region total, doubling in the past decade.  The number of poor in Chicago, however, has largely remained the same. Median household income in the suburbs dropped by 14% during this period, Chicago’s by  12%. Suburbia’s share of foreign-born residents nearly doubled, nearly tripling for native-born Latinos.  Declining wages and living standards in the suburbs led to a 26% increase in the poverty level of native-born whites, while the Chicago increase was only 16%. How poor we are – Chicago and the suburbs (05 Sept. 2013).  Chicago is the World.  Blog.  [email protected] Social IMPACT Research Center’s report:  http://heartlandalliance.org/research/annual-poverty-report.


September 2013
Submitted by Krista Ravenscraft

Federal

Farm Bill Contains Second Controversial Provision with King Amendment: Another largely partisan issue beyond food stamp (SNAP) benefits which is delaying passage of the 2013 Farm Bill is the King Amendment, officially known as the “Protect Interstate Commerce Act.” Introduced by Congressman Steve King (R-IA), it would nullify any state laws promoting the welfare of farm animals as an undue burden on large-scale meat producers (so-called “factory farms”) selling in multiple states. Chemical corporation Monsanto is simultaneously lobbying its Congressional allies to propose similar legislation that would nullify or preempt any state laws requiring labeling of its GMOs (genetically manufacturer organisms). Illinois has passed legislation that would be nullified by the King Amendment. OCA calls on Congress to reject the King amendment and any other Farm Bill riders that would preempt state GMO labeling laws (17 May 2013). Press release. Organic Consumers Association. http://organicconsumers.org/articles/article_27543.cfm

Federal policy analysts have concluded that the King Amendment is written so broadly and so ambiguously that its passage could prohibit or preempt any state GMO labeling, animal protection, or food safety law. They see this proposal as a natural extension of the “ag gag” law, the 2005 Animal Enterprise Terrorism Act drafted by the conservative American Legislative Exchange Council (ALEC). Originally submitted to legislators in response to such events as the release of an undercover PETA video showing inhumane treatment of pigs at the Iowa MowMar pork processing facility and the destruction of testing labs by more radical animal welfare organizations, it made such actions a felony. For a history of “ag gag,” see Genoway, Ted (July/Aug. 2013). Gagged by
Big Ag. http://www.motherjones.com/environment/2013/06.

The initial draft prohibited entering “an animal or research facility to take pictures by  photograph, video camera, or other means,” while the final version spoke more generally of “damaging or interfering with the operations of an animal enterprise.” This was later interpreted as providing for the prosecution of such mainstream organizations as The Humane Society. When Congress considered the proposal, it passed the Senate unanimously, and the sole holdout in the House was Rep. Dennis Kucinich (D-OR), who warned that it would “have a chilling effect on the exercise of the constitutional rights of protest.” 

The King Amendment was not included in the Senate’s version of the Farm Bill. Although  nearly 200 members of Congress representing both parties have signed letters expressing their opposition of the provision, there is concern that some positions will change if it otherwise prevents the bill’s passage. Greenstein, Nicole (17 Aug. 2013). King Farm Bill amendment angers animal advocates. Blog. Time Magazine. http://swampland.time.com/2013/08/17

President Obama’s Recent Housing Speech More Relevant to Millennials Than They Think: Today’s young adults, currently preoccupied with finding employment and paying off student loans, may not have listened to President Obama’s August 6 speech on his ideas about homeownership and housing finance reform, viewing it as personally irrelevant. Housing finance reform, however, will have serious long-term impact on Millennials, particularly in the matters of wealth accumulation, apartment rentals, and potentially, discrimination. 

From 2008, the middle of the recession, to 2011, home ownership by young adults fell by 12 percent, to its lowest in at least forty years. As late-end Boomers are well aware, more than thirty-three percent of Millennials (21.6 million of them) are living at home, the highest rate in more than forty years. Reasons include declining employment, huge student-loan debt, inadequate housing inventory, buying competition with investors, and late marriage. The result is lower home ownership rates than those of their parents. Delayed homeownership can be voluntary, living with parents in order to save money or renting in order to keep job mobility; or involuntary, due to poor employment prospects or lack of a down payment.

Whatever the reason, the decision has major implications for their future accumulation of wealth and achievement of financial security, home ownership being an investment with significant impact on one’s standard of living and well-being. When a person pays down his/her mortgage principal through monthly payments, it becomes a long-term savings strategy by which successful homeowners can accumulate wealth. This is particularly important for Millennials, who may be the first generation to have less overall wealth than their parents.

In addition, home ownership increases community stability, homeowners being more likely to vote in local elections and to be involved in community activities. Home equity allows families to make other investments, such as investing in their children’s educations. U.S. economic policy makes homeownership the basis of increasing wealth, with federal housing subsidies concentrating on homeowners.

New legislation under consideration in Congress will transform mortgage financing, de-emphasizing the role of Fannie Mae and Freddie Mac in order to prevent the recurrence of the 2007 financial collapse. Multiple proposals on the table will have direct effects on how easy it will be for Millennials to purchase homes. A new mortgage financing system will determine credit cost and availability, down payment size, and the amount of debt a buyer can carry, all important issues to Millennials saddled with unprecedented student debt. In addition, it will determine whether they will have access to the same 30-year fixed-rate mortgages that were available to their parents. Congressional action will have major effects on when Millennials can buy homes, where they afford to live, and how much lifetime wealth they accumulate.

Millennials as the renter generation are transforming the housing industry. Thousands are gravitating toward apartments, temporary multifamily residences, in metropolitan areas. According to a recent survey, 77 percent of Millennials prefer an “essential” home to a “luxury” one, which may represent a generational shift in housing preferences. They are also more mobile than their parents. Though a majority would like to own a home at some point, 63% in a recent survey stated that they were planning to move in the next five years, with 40% expecting to live in an apartment. Thirty-five percent of today’s Americans are renters, the highest rate since 1995, and the number is expected to increase in the future.

The availability of affordable rental housing, however, is also tied to the housing finance system. Comprehensive housing finance reform will ensure the availability of affordable options. Without government regulation of mortgages, more than one-third of renting families whose median income of $31,000 barely qualifies them as middle class will see rents increase and the supply of affordable apartments decrease. Government involvement in ensuring the continued availability of rental units will be necessary where more than half of all renters live in buildings financed by single families. Diversity among Millennials, the highest in generations so far, also makes them more susceptible to discriminatory housing policies. For the first time in U.S. history, minority groups make up nearly half of Americans under age 5. They will be disproportionately affected by proposals to require higher down payments, necessitating the accumulation of savings for decades although they are otherwise creditworthy. Black and Latino borrowers would be the ones most affected by this, as they were  by subprime lending schemes. They were also most affected by the drop in conventional mortgage lending after the financial crisis: from 2005-2009, lending to Whites dropped by 67%, while lending to Africans and Hispanics dropped by 85%. The extent of this discrimination shows the importance of community banks, which ensure the availability of adequate financial services to mostly minority clients.

Millennials, therefore, whether they have current plans for home ownership or to become renters, have a significant stake in the politics of housing reform. Kaushal, Jessica (14 Aug. 2013). Why President Obama’s housing speech matters to young people. Center for American Progress. http://americanprogress.org/issues/housing/news/2013/08/14.

The Battle Over Obamacare: Just before Congress headed home for a five-week summer recess,  House Republicans voted for the 40th time to repeal Obamacare, an effort which again failed and will not receive more favorable reception in the Democratic-controlled Senate. This version was entitled the Keep the IRS Off Your Health Care Act of 2013, which sought to block the IRS from enforcing the provisions assigned to it under the act (for example, distributing the tax credits that individuals and small businesses will use to defray health insurance costs). The sponsor of the bill, Rep. Tom Price (R-GA), sought to take advantage of the recent IRS scandal over targeting Tea Party groups applying for nonprofit status with extra scrutiny, although evidence revealed that progressive groups also received the same treatment.

House Majority Leader Eric Cantor (R-VA) stated, “We care about the health and well-being of the American people, which is why this bill is coming to the floor. ..(R)ecently, we’ve learned that the IRS has been abusing its power by targeting and punishing American citizens for their political beliefs… This kind of government abuse must stop. The last thing we should do now is to allow the IRS to play such a central role in our health care.” Rep. Lloyd Doggett (D-TX) responded, “They have one alternative
to Obamacare. It’s called NothingCare.” He and other House Democrats criticized the Republicans for spending valuable time and money on the vote and its 39 precedents. Terkel, Amanda (2 Aug. 2013). House GOP votes to repeal Obamacare for 40th time. Politics. Huffington Post.

A group of Republican Senators are trying a different approach, with a campaign to defund Obamacare by blocking any government funding bill that includes funds going toward its Implementation. Congress needs to pass a federal funding bill by September 30 or else several parts of the government may shut down. A number of conservatives have joined this campaign, but many Republicans, skeptical of the idea’s effectiveness and concerned about being associated with a government shutdown, have dismissed it as a gimmick. Sen. Richard Butt (R-NC) has called it the “dumbest idea” he has ever heard, while Sen. John McCain (R-AZ) warns against more shutdown “shenanigans.” Sen. Tom Coburn (R-OK) went so far as to ask the nonpartisan Congressional Research Service to prepare a report on whether a government shutdown would stop the Implementation of Obamacare. Its conclusion? It wouldn’t change much. Condon, Stephanie (1 Aug. 2013). Can the GOP ever really stop Obamacare? CBS News.
http://www.cbsnews.com/8301-250_162-57596451.

Additional Cuts Beyond the Sequester Proposed by House Republicans: House Republicans are demanding additional program cuts in order to prevent government shutdown. Among the proposed cuts: Education grants for the poor, 16% cut; Department of Labor, 13% cut; Community Development Block Grants, almost 50% cut; Amtrak, nearly one-third cut; EPA clean water grants, 83% cut; and the National Endowment for the Arts and the Humanities, 50% cut.
Sabotage! (26 July 2013). The Progress Report. Center for American Progress Action Fund.

Senator Rand Paul Says He Doesn’t Believe Polls Have Barred Blacks From Voting: On Wednesday August 14, Sen. Rand Paul (R-KY), considered a major prospect for the Republican presidential nomination in 2016, told the non-partisan Louisville Forum that he didn’t believe “there is any particular evidence of polls barring African-Americans from voting.” Paul, a Tea Party supporter, has a long history of opposition to civil rights laws. His opinion runs contrary to details of the 2012 elections, where black and Hispanic voters waited nearly twice as long to cast ballots as white voters, and Florida voting lines of up to six hours led an estimated 201,000 to become frustrated and leave the polls (Governor Rick Scott had signed a bill reducing early voter hours). Post-election, one Republican official conceded that early voting was cut on the Sunday before Election Day because ‘that’s a big day when the black churches organize themselves.” Although proponents of voter ID laws claim that they are necessary to prevent voter fraud at the polls, a recent survey found that just 0.0023 percent of votes are the product of in-person fraud. Conservative estimates suggest that 2-3% of legitimate voters will be turned away by a voter ID law, these being disproportionately African-American.
Paul admitted during his initial race for the U.S. Senate that he opposes the Civil Rights Act of 1964, which bans employment discrimination and segregated facilities. He called denying African- Americans their equal rights as “…the hard part about believing about freedom.” Millhiser, Ian (14 Aug. 2013). Rand Paul: ‘I don’t think there is any particular evidence’ of black voters being prevented from voting. ThinkProgress.  

Detroit’s Bankruptcy Filing May Be Only the Beginning: City pension obligations, based on promises relying on overly optimistic assumptions in good times, have become unaffordable after nationwide financial collapses. Yet it is unclear whether bankruptcy provides a solution to municipal pension problems: no city has ever reduced its pension obligations in bankruptcy without pensioner consent. Municipal bankruptcy has been a possibility since the 1930s, but  pension-driven bankruptcies are a recent phenomenon. Few of the government entities filing for bankruptcies have even been municipalities, primarily including sewer, water, and hospital districts with a few county fairs, NYC Off-Track Betting, and the Las Vegas Monorail thrown in. Filing cities are generally small towns which have suffered economic disaster for other reasons: the town treasurer absconding with a million dollars, the city tax on strip clubs found to be an unconstitutional violation of freedom of expression, or the state closing the illegal speed trap the town was running on the interstate highway. Not even the largest and most famous municipal bankruptcy cases have been resolved on the pension issue. Other municipalities in financial trouble over pension obligations will be closely observing the Detroit case, which will require resolution of the issue whether pensions can be cut in bankruptcy, and whether state laws protecting those pension obligations will be honored. If it is found that municipal pensions can be cut in bankruptcy, other cities will be considering bankruptcy as a possibility, with some using its threat as negotiating leverage to get concessions from pensioners and current employees. Chicago is one such city, which suffered an unheard-of three-notch downgrade on its
municipal debt in July. It is looking for ways to handle its debt without raising taxes, a politically unpopular action. So far it has tried to sell off various public assets, a questionable strategy, offering for example
its parking meter revenues for the next 75 years. Levitin, Adam (12 Aug. 2013). Don’t take my pension!: The looming public worker nightmare. Salon magazine

Acceleration of PRI Funding Process Proposed in House: Rep. Cory Gardner (R-CO) has introduced legislation aimed at accelerating economic development, including job creation, in urban and rural
areas This bill, entitled the Philanthropic Facility Act, will streamline the IRS approval process for determining eligible low-profit businesses that qualify as PRIs (Program-Related Investments) in which foundations and other charitable entities can invest. It will also provide that such foundation investments will be included in its required annual payout.

The Act already has bilateral support, its co-sponsor being Rep. Jared Polis (D-CO). Polis has stated that it would “encourage and increase investment in education and renewable energy without any cost to the taxpayers. Simplifying partnerships between nonprofit foundations and for-profit investors, the …Act will stimulate economic growth and support socially responsible businesses that are committed to charitable work.” New charity giving legislation in the federal hopper (26 Aug. 2013). National Council of Nonprofits.

ILLINOIS

Governor Quinn Stops Legislative Salaries Until They Pass Pension Reform: Meanwhile in Illinois, the crisis over funding state pension obligations has compelled Governor Quinn to withhold legislators’ salaries after his designated committee failed to come up with a solution within the stated deadline. This resulted in quick bipartisan action by Illinois House Speaker Michael Madigan and Senate President John Cullerton, who were able to move past their differences on the pension
Issue to file a lawsuit against Quinn. Oral arguments will be held September 18, after legislators have missed a second paycheck. Quinn used his line-item veto to accomplish the action, saying, “This is an emergency. This is a crisis. This requires the full attention of those who were elected to the General Assembly.”

The lawsuit alleges that Quinn’s action was unconstitutional, violating the Illinois Constitution provision that prohibits “changes” in legislators’ salaries during their term. Some legal pundits have supported Quinn’s authority to act, distinguishing “changes” from withholding altogether. Public polls have indicated that a majority of Illinois residents support Quinn’s action. Wojciechowski, Charlie (18 Aug. 2013). Judge sets September arguments in lawmaker pay suit. NBC.  For an outsider’s perspective on the court case and Illinois financial problems, see, No play, no pay: A tussle across three branches of government (10 Aug. 2013). The Economist (from print edition). 

Illinois Food Stamp Benefits Will Be Cut by $220 Million This Fall: Two million Illinois residents
relying on food stamps (Supplemental Nutrition Assistance Program, or SNAP) will see their benefits cut beginning October 31 due to the ending of a temporary increase, part of the 2009 American Reinvestment and Recovery Act. For example, a family of three will see a $29 monthly deduction, $319 from November to the end of the federal fiscal year in September 2014. A family of four will lose $36 per month.

The cuts will affect more than 47 million Americans, including 22 million children. They will reduce the $80 billion annual program by $5 billion in 2014. As a result, the average 2014 benefit will provide less than $1.40 per person per meal. Source: Voices for Illinois Children.

In Cook County, the one million people expected to be enrolled in 2014 will see their collective benefits reduced by nearly $111 million over the federal fiscal year. The 69,000 people expected to be enrolled in DuPage County will have their collective benefits reduced by more than $7 million.

Gaylord Gieseke, President of Voices for Illinois Children, says that this is the first time SNAP has had a benefit reduction affecting all participants. “Given the fact that benefits are already inadequate for many families, these cuts will be particularly painful.”

House Republicans will consider a bill after the August recess that would reduce SNAP benefits by $40 billion over 10 years, doubling the amount proposed in the original 2013 Farm Bill which was passed without SNAP funding on July 11. The additional $20 billion reduction will mostly  come from removing up to 4 million people from the program, including childless adults ages 18-50 who are unable to find at least a part-time job after receiving three months’ benefits. Fortino,  Ellyn (14 August 2013). Illinois SNAP recipients to see benefits cut by $220 million this fall. Progress Illinois

Illinois Officials Brag About Misspending Only $52 Million in SNAP Benefits for FY2012: Although they couldn’t say how many families received too much and how many too little as part of its $52 million misspends in FY2012, Illinois officials were nevertheless proud of the figure. Since then, the U.S. Department of Agriculture, which sends SNAP dollars to the states, has reported that Illinois’ error rate in spending the $3 billion allotted last year was 1.74 percent, with 1.24 percent being overspent. This represents overpayments of $36.9 million, with the balance of $14.9 million representing underpayments. The two million people receiving benefits in Illinois represent 16% of the population. State Rep. JoAnn Osmond (R-Gurnee), Republican spokesman for the Human Services Committee in the Illinois House, expressed her disappointment with these numbers. “Let’s make sure that when we are paying (the beneficiaries), we’re paying them for the right purpose and to the right people,” she said. Illinois’ error rate was so low last year compared to other states’, however, that it drew a $4 million bonus from the federal government. Yount, Benjamin (13 Aug. 2013). Illinois’ food stamp errors: Mostly overspending. Blog. Illinois Watchdog.

Gov. Quinn Signs Law Mandating Changes to Sex Ed: On August 16, Gov. Quinn signed legislation which sets a new sex-education standard for Illinois 6th-12th graders, going beyond abstinence-only instruction. School systems offering sex education are encouraged to adopt curricula which is  “comprehensive, medically accurate and age-appropriate,” focusing on sexually-transmitted diseases,contraception, and unintended pregnancies. Parents who object to the amended instruction have
the power to withhold their children from the class. The bill was opposed by Republicans and backed by Planned Parenthood of Illinois and the ACLU of Illinois. It will take effect January 1, 2014. A 2008 study revealed that 93% of Illinois public school districts were offering sex education, with approximately 65% stressing contraception and STD awareness.

In 2011, 15-19 year-olds made up 35% of Illinois chlamydia cases and slightly fewer (33%) of state gonorrhea cases. In 2010, this age group had the 27th highest teen birth rate nationally (Source: U.S. Department of Health and Human Services’ Office of Adolescent Health). McKinney, Dave (17 Aug. 2013). New sex-ed goes beyond abstinence. Print edition. Chicago Sun-Times; Changes to Illinois’ sex ed teaching requirements may have little effect (13 Aug. 2013). Progress Illinois

CHICAGO

Cardinal George Yanks Catholic Funding from Illinois Immigration Groups Supporting Same-Sex Marriage: The Catholic Campaign for Human Development (CCHD) in late July took back funding it had distributed to the Illinois Coalition for Immigrant and Refugee Rights (ICIRR) based on Cardinal George’s decision to only fund organizations that “respect the teachings of the Catholic faith.” ICRR member organizations, which vary in their focus and constitution, could retain funding if they dropped their association; at least one organization, the United African Organization, declined to do so. The Catholic Church’s $1 million grant to ICRR last year was intended to help mobilize Catholics to support comprehensive Immigration reform, seen as pursuant to its mission to support the poor and vulnerable. CCHD also cut off homeless groups and other charities which support marriage equality. As many as 130 organizations benefiting from the ICIRR grant stand to lose funding. Lee, Esther (5 Aug. 2013). Chicago cardinal pulls funding from immigration groups supporting same-sex marriage. ThinkProgress

Chicago Teachers Criticize Layoffs, Declare Them to Be Part of Long-Term School Board Strategy: The late-July layoff of 2,113 school staff, including approximately 1,000 union teachers, brought the summer’s total to almost 3,000 personnel (more than 1,500 teachers). Some received notice via email. On July 24, teachers, parents and community members marched outside Chicago Board of Education headquarters to protest the combined effect of the layoffs, other public school funding cuts, and the closing of 50 schools. The recent City offer to contribute $33.5 million in Tax Increment Financing (TIF) subsidies toward the construction of DePaul University’s lakefront basketball arena also came under attack. TIFs divert funds that would otherwise go to public institutions such as schools and parks. Rosalie Mancera, a CPS parent and a teacher in Pilsen who has 35 years’ experience, pointed out that DePaul is a private university with an endowment. “We’re taking away money from our children
and cutting back on languages, arts, creating bare-bones programs so that our students won’t even be qualified to go to places like DePaul University,” she said. Although no schools in Pilsen closed, Mancera believes that surviving schools “might as well have closed” because of significant budget cuts that are forcing principals to make tough choices about how to spend the remaining funds. “I feel bad for the principals,” Mancera said. “They’re suffering as much as us. They need to decide whether they hire back teachers, or buy books or toilet paper.” 

CPS officials largely blame the $600 million in teacher pension liabilities for necessitating the cuts. They point to more than $100 million in cuts they made to the central office budget, although some claim that it is still top-heavy. Parents and teachers blame Mayor Rahm Emmanuel and his hand-picked school board for the layoffs, budget cuts, and school closings, calling for his ouster. Teachers aide Patrick Butcher agrees
that Emmanuel has to go: “He’s trying to put all the money in charter schools and break the union.” They also are renewing calls for an elected school board. “Every one of them have connections to banks or for-profit education,” Mancera said. “What are we saying with this? The board could say, ‘Stop, we can’t conscientiously do this.’ But they won’t.” Lydersen, Kari (24 July 2013). Chicago teachers protest layoffs, chanting ‘Emmanuel has got to go!’ In These Times magazine.

Protestors Send Message to Emmanuel: Return Our TIF Funds So They Can Replace School Budget Cuts: In an August 18 protest in Logan Square, demonstrators demanded that Mayor Emmanuel designate surplus TIF funding for their intended public benefit, specifically, that they replace CPS budget cuts. The more than 100 parents, teachers, and community members participating were urged to call the Mayor’s office to make their demand, as soon as possible because of the looming August 26 school opening date. Alonso Zaragoza, a community member of Kelvyn Park High’s Local School Council (Logan Square), stated that schools critically needed the TIF funds to be restored, his own school losing $3.1 million in funding for this school year. He said that cuts had particularly devastated arts and music programs, “(which) our students require in order to want to come to school.” Dudek, Mitch (19 Aug. 2013). Protestors demand TIF funds. Chicago Sun-Times (print edition).



August 2013
Submitted by Krista Ravenscraft

Federal
Reaction to Zimmerman Acquittal:  On July 13, George Zimmerman was acquitted of second-degree murder and manslaughter charges by a Florida state court in his shooting of Trayvon Martin, an unarmed, hoodied black teenager.   Martin was returning home from the store on a public street adjacent to property owned by Zimmerman’s homeowner association.  Zimmerman, a self-styled security officer for the association, reported a “suspicious person” to police, who instructed him not to approach the person.   Zimmerman disobeyed, and an altercation broke out between them.  The jury found that, based on Florida’s “Stand Your Ground” statute, Zimmerman reacted appropriately when he shot Martin.

Two days later, Rep. Luis Gutierrez (D-IL) of Chicago, a member of the House Judiciary Committee, formally requested that the panel chairman hold hearings on the killing.  Gutierrez said that Martin’s shooting death “undermines the rule of law, erodes community trust in law enforcement, and exemplifies just how dangerous the combination of rampant fear and easily available guns can be.”  He added in conclusion, “Day after day and month after month, gun violence is taking the lives of children in the City of Chicago at a horrendous rate.  And yet, the House Judiciary Commission scarcely has anything to say about it.”

Earlier in 2013, Rep. Gutierrez introduced H.R. 965 to ban “junk guns,” the cheaply made, easily concealable handguns that are disproportionately used in the commission of crime.  Sweet, Lynn (15 July 2013).  Rep. Gutierrez calls for House hearing on Zimmerman verdict in Trayvon Martin case.  Voices blog, Chicago Sun-Timeshttp://voices.suntimes.com/early-and-often/sweet

The following day, in a speech to the NAACP convention in Orlando, Florida, U.S. Attorney General Eric Holder denounced “Stand Your Ground” laws, saying “It is our collective obligation – we must stand our ground – to ensure that our laws reduce violence and take a hard look at laws that contribute to more violence than they prevent.”  He assured the assembly that the Justice Department had opened an ongoing investigation of the case in the spring, and that they would consider all available information  before deciding which action to take in response.  

Holder further stated, “We as a nation must confront the underlying attitudes, mistaken beliefs, and unfortunate stereotypes that serve too often as the basis for police action and private judgments… (I)t’s time to question laws that senselessly expand the concept of self-defense and sow dangerous conflicts in our neighborhoods.  These laws try to fix something that was never broken.  There has always been a legal definition for using deadly force if – and the ‘if’ is important – no safe retreat is available.”  Sweet, Lynn (16 July 2013).  Holder denounces “Stand Your Ground” laws in wake of Zimmerman verdict in NAACP speech.  Voices blog.  Chicago Sun-Timeshttp://voices.suntimes.com/early-and-often/sweet.

Threat of “Nuclear Option” Convinces Republican Senators to Confirm Presidential Nominees to Head Federal Agencies:  Negotiations the previous night and the morning of July 16 resulted in a Senate agreement to confirm four pending agency nominations and to withdraw two nominees for the National Labor Relations Board in exchange for the confirmation of any two other nominees “to be named later” before the August Senate recess.  This was in response to a proposed change of the Senate rules by Senate Majority Leader Harry Reid (D-NV) which would prevent a Senate minority from using the filibuster to nullify government agencies’ functions that they object to “for purely ideological reasons” by holding up Executive Branch nominees.  The vote was 71-29.

Among the nominees were Richard Cordray for Director of the Consumer Financial Protection Bureau, who had been acting as interim director for the past year, as well as nominees to head the Environmental Protection Agency (EPA), Department of Labor, and the Export-Import Bank.  In the deal offered by Sen. John McCain (R-AZ) and a group of breakaway Republicans, the Democrats retained the right to renew the proposed rule change.  Senate Republicans had held up vote on Cordray’s nomination by 730 days.  The next nominations to be considered will be for three members of the D.C. Court of Appeals. 

Options for tax-exempt organizations and charitable giving addressed in a Committee staff report include: 1) repealing the charitable deduction entirely; 2) converting the deduction into a tax credit; 3) imposing a minimum for donations (floor); and 4) capping the deduction’s value at a certain percentage or dollar amount (ceiling).     Taking yes for an answer (16 July 2013).  The Progress Reporthttp://mail.aol.com/37834-111/aol-6/en-us/mail

Another Relevant Issue to Nonprofits in Tax Reform:  The New Markets Tax Credit is a high priority for nonprofit community development organizations; its subsidies have assisted a variety of nonprofit and socially beneficial projects.  These include the construction of 14 affordable homes by Omaha Habitat for Humanity; the development of a facility for homeless women and children by the Phoenix (AZ) Rescue Mission; the construction of a social service “campus” in Los Angeles for the Children’s Institute; the construction of a new health clinic for the Generations Family Health Center in Willimantic, Connecticut; and dozens more.  Cohen, Rick (10 July 2013).  Baucus and Camp take their tax reform show on the road.  Nonprofit Quarterlyhttp://nonprofitquarterly.org/policy-social-content/22580.

Food Stamp Renewal Deleted from Farm Bill Passed by House:  House Republicans passed a version of the Farm Bill on July 11 which omitted food stamp funding.  This was the decision of the Chairman of the Agricultural Committee, Rep. Frank Lucas (R-OK), after the GOP majority failed to pass a version that would fund both agricultural and nutrition programs.  In that go-round, Republicans had proposed $20 billion in cuts to the Supplemental Nutrition Assistance Program (SNAP).  Opponents included members of both parties – Democrats who felt the cuts were excessive, and about 60 Republicans who thought they were too little.  Lucas thought that by splitting the bill, it would be easier to get a Republican majority on each portion.  Currently, there is no nutrition-only bill on the table, although 46 million Americans receive SNAP benefits.  The program expires September 30.  The proposed $20 billion cut would eliminate eligibility for two million people.  The Democratic-majority Senate has already agreed to $4 billion in cuts.  Stangler, Cole (11 July 2013).  House evades food stamp renewal.  In These Timeshttp://inthesetimes.com/article/15281.

Sequestration Cuts Affecting Nonprofits Who Don’t Receive Direct Federal Funding:  The $85 billion sequestration cuts burden nonprofits in several ways:  direct funding cuts, indirect funding losses, increased community needs, subsidizing governments, and higher operating costs.  Nearly all nonprofits with a federally-funded contract or grant will lose approximately 9% of federal funding in FY13.  When state and local governments lose 9% of their funding for federal domestic programs, they may have to reallocate and reduce their own funds, decreasing program funding availability.

Many Americans will be directly affected by lost income, either from job losses, furloughs, pay cuts or federal employment benefits cuts.  They will then turn to nonprofits for help.   Increased demand for nonprofit services will continue as it has over the last four years in response to the 2008 recession.   Nonprofits reporting increased demand for their services, compared to the previous year: 2008, 73%; 2009, 77%; 2010, 77%; and 2011, 85%. 

Nonprofits have been in limbo for months as state and localities waited to see if the sequestration would materialize.  Many have additional burdens by not being paid full costs on government contracts.  Some foundations stepped up to help during the recession, but they don’t have the funds to replace endless government cuts.  Nonprofits are also affected by higher food costs (cuts to food and meat inspectors), higher transportation costs (cuts reducing the number of FAA controllers will increase costs of moving freight and passengers), and other increased costs.  The devastating human impact of sequestration cuts (2013).  National Council of Nonprofits. http://givevoice.org/sites/default/files/image2.   

Illinois
Sequestration Effects in Illinois:  Statewide:  100 fewer children will have access to child care services dependent on federal funding, while 2,700 three- and four-year-olds will be denied access to Head Start programs.

  • 4,592 fewer families will receive Section 8 housing vouchers;
  • 80,000 long-term unemployed have already had their unemployment benefits reduced by 16.8% beginning May 27 (a $300-$320 typical weekly benefit would be reduced by more than $50/week).

Chicago:  125 families with members suffering from AIDS will be forced from subsidized housing.

Cook County:  Families on the waiting list for rental vouchers since 2001 will remain there.

State-by-state impact (2013).  National Council of Nonprofitshttp://givevoice.org/state-impact.

Unpaid State Bills at $6.1 Billion After $1.5 Billion Reduction, More to Follow:   Since last July, Illinois has reduced its payment backlog by nearly $1.5 billion, yet $6.1 billion remains unpaid, Illinois Comptroller Judy Baar Topinka announced at the close of Illinois’ fiscal year.  The payments were made from more than $1 billion in unexpected tax return dollars, mostly from people trying to avoid federal tax changes in late 2012.  By August, the backlog will near $7.5 billion, approaching $9 billion in November or December.

Comptroller Topinka asserts that she advised lawmakers to cut the budget and refrain from spending, but the budget increased from $34.4 billion in FY13 to $35.5 billion in FY14.  “I told anybody that I could talk to in the Legislature, ‘We’re going to have this pop.  It’s a one-shot deal.  So please keep the budget flat.  Don’t get excited that you have money to burn, because you don’t.”

Topinka said that Illinois must come up with a solution before lawmakers decide to make the “temporary” 2011 tax increase permanent.  Calling that tax “horrendous,” she said, “But I don’t see how it can go away (with current spending levels).”

Ted Dabrowski, Vice President of Policy at the Illinois Policy Institute, said that the 2011 tax increases were explained to taxpayers as funding to pay off old bills, but it hasn’t happened.  “It has taken in $14 billion in new revenue over the past two years, yet we have more unpaid bills than ever.”  Yount, Ben (1 July 2013).  IL owes:  Comptroller says unpaid bills now $6.1 billion; $9 billion by January.  Illinois Watchdog.org (formerly Illinois Statehouse News).  http://watchdog.org/93381.

Illinois Lottery Sales and Profits Hit Record Levels in FY13:  The Illinois Lottery generated sales of $2.8 billion in FY13, contributing a record $793.5 million to lottery-supported causes.  These include K-12 schools ($655.6 million), capital projects and job creation ($135 million), and $2.92 million to four causes funded by designated instant games (Illinois veterans, the fight against breast cancer, MS research, and assistance for those living with HIV-AIDS).  This represents a 6% sales increase.  Lottery Superintendent Michael Jones attributed the increase to the public’s and the lottery industry’s positive reaction to “ongoing branding efforts designed to make the Lottery more relevant to all Illinois adults.”

The largest increase was for Powerball, with a 61% increase over the previous year, to $236 million.  Jones attributed it to large jackpots and the introduction of internet sales in November 2012.  Although internet sales were modest ($6.5 million for Powerball, Mega Millions and Lotto), Jones said that they had not yet reached their full potential, and that the sales portal had recently been made “more intuitive and user-friendly.”  In FY13, the Lottery moved out from the Department of Revenue and became a separate agency.  Record Illinois lottery sales and profits in Fiscal Year 2013 (15 July 2013).  WIFR.com (Rockford, Illinois).  http://wifr.com/home/headlines.

Pension Reform Committee Not Discussing Three Major Issues:  The Illinois special pension committee formed by Governor Quinn is focusing on actuarial estimates, the number of votes in Springfield, and among other issues, the morality of public pension reform.  But they have so far failed to talk about three critical issues in Illinois’ worst-in-the-U.S. public pension debt. 

These issues include 1) the real size of pension debt.  Next year, the Wall Street credit rating firm Moody’s will force Illinois and other states to be more realistic about their pension debt numbers.  Ted Dabrowski (Illinois Policy Institute) said that the result would be a jump in Illinois’ $100 billion “official” unfunded liability.  Using Moody’s lower market rate assumption of 4.13% for 2012, the unfunded liability approaches $200 billion.  The Policy Institute’s own calculation based on Moody’s proposed rate is an estimated $209 billion.

2)  Defined benefit pensions were designed for taxpayer funding.  Public employees pay up to 9.5% of their salary into their retirement pension fund, while the state, school district or university pick up an additional 20-25%.  The balance comes from Illinois taxpayers.

 “Pension fund shortfalls are likely a function of the defined benefit structure,” said Dabrowski.  “Defined benefit systems are chronically underfunded due to lower-than-expected investment returns, changed actuarial assumptions, overly generous benefits and structural underpayments.”  Guaranteed cost-of-living adjustments dramatically increase costs.

 3)  There is only one way out.  Commission Chairperson State Rep. Elaine Nekrtiz (D-Northbrook) has said that legislators need to find “a new way” to address pension reform.   Plans proposed by House Speaker Mike Madigan and Senate President John Cullerton are “dead.”

Dabrowski said the only solution for Illinois is to get out of the pension business, introducing 401(K)-style plans instead.  The Policy Institute has been promoting a plan for some time, but it has been “politically bottled-up.”  Many legislators believe that 401(K)-style plans are not politically viable, he said.  “But now that we’ve seen difficulties in passing the Cullerton and Madigan bills, the Legislature should begin to open up to new ideas.”

Rep. Nekrtiz hopes to have a plan by the end of July.  Yount, Ben (3 July 2013).  Three issues not included in Illinois pension reform discussions.  Illinois Watchdog.orghttp://watchdog.org/93878.

Governor Quinn Signs Anti-Gang Laws:  Governor Pat Quinn on July 8 signed several pieces of legislation designed to decrease gang violence.  The previous long holiday weekend, at least 12 people were shot and killed in Chicago, and a minimum of 62 others were wounded from Wednesday to Sunday that week.

The Gang Crime Witness Protection Act (H.B. 1139) establishes the Gang Crime Witness Protection Program, funding counties to provide economic assistance to victims and witnesses aiding in the prosecution of gang crimes.  It went into effect immediately upon signing.  H.B. 2768 requires school officials to report gang-related activity and student possession of illegal weapons to law enforcement.  In addition, it requires the Police Department to notify school principals if a student is held in custody for gang involvement.  It becomes effective January 1, 2014.

Chicago  
The same day, Chicago Police Superintendent Garry McCarthy announced department plans to update its website and ramp up community outreach through increased use of social media.  The Englewood, Harrison, and Near North districts currently have Twitter feeds to keep the community informed about local crimes and relevant events.  Beat meetings will be streamed online.  In addition, 911 callers can submit cellphone photos with crime reports, and can also text anonymous crime tips to 274637 (CRIMES).  Twitter feeds will eventually be created for all Chicago districts.  Quinn signs anti-gang legislation, CPD ramps up community outreach (8 July 2013).   Progress Illinoishttp://progressillinois.com/news/content/2013/07/08

Chicagoans Protest Trayvon Martin Verdict:  In response to news of George Zimmerman’s acquittal on all charges, Whitney Clark, a 22-year-old lifelong Chicagoan and graduate of Southern Illinois University, organized a South Side rally and march on July 15.  The twenty-person demonstration in Washington Park evolved into a march involving more than 200 people.  Clark, a Hyde Park resident, said, “Racism is still alive and well in America, but people try to cover it up.  We need to acknowledge it in order to change it.”  She addressed the crowd outside her alma mater King College Prep High School, also attended by Hadiyah Pendleton, a gang violence victim.  Clark called on the people to stand against violence and “prevent death from entering our homes.”

Former State Sen. Alice Palmer also spoke, saying that if the law was always right, she would be a slave today.  “This is a time to think,” she said.  “Think about what it is we can do, with our brains – not with our fists, not with foolishness.  Think about the history that brought us this far.”  Rezin, Ashlee (16 July 2013).  ‘Justice was not served for Trayvon Martin,’ say Chicago protestors.  Progress Illinois.  http://progressillinois.com/quick-hits/content/2013/07/16.

Residents Protest Budget Cuts at Chicago Board of Education:  On July 11, it was Brighton Park’s turn to express its opposition to upcoming budget cuts that will go into effect at their schools this fall.  Approximately 200 people demonstrated in front of the Chicago Board of Education building.  The Brighton Park Neighborhood Council, which organized the event, issued a statement that included, “There will be a loss of over $7.5 million in funding, 40 teaching positions, and two dozen non-teaching positions” in Brighton Park community schools for the 2013-14 school year.

In June, the Chicago Public Schools (CPS) issued draft school budgets based on a new, per-pupil funding formula.  Though not yet finalized, they have drawn community opposition, critics claiming that they are based on faulty enrollment formulas and will do disproportionate harm to black and Latino communities, as did the school closings announced in May.

Specifically, this protest centered on the loss of Thomas Kelly High School’s renowned band program.  Band members led the march to the CPS building, demonstrating what would be lost by accompanying the group with music.  A 10th grade Kelly student, Mark Junges, said that although he was not a band member, he was still concerned about the broad cuts and worried that cutting extracurricular programs might make students more susceptible to gang activity.

Approximately 30 of the demonstrators wore shirts with the Chicago Teachers Union (CTU) logo, one stating that she was attending to show support for fellow union members who would lose their jobs due

Maria Dias-Cisneros, parent of three elementary students and a Local School Council member, criticized the Emanuel administration’s school policy as hypocritical.  “You know, they say they care a lot about health and being fit, then they cut our health teacher.  Rahm said they weren’t going to cut librarians, and then, like a week later, we lose our librarian.  In the long run, I think this is going to have a really negative impact on low-income families, and will lead to an increase in crime.”

CPS has attributed cuts to a drop in enrollment.  Yet Patrick Brosnan, executive director of the neighborhood council, isn’t convinced.  “They play these budget games every year,” he said.  “They always project the enrollment down, but they’re not using actual demographic analysis.  Every year they end up revising it after school starts.”  He pointed out a strong link between community safety and public service funding. 

 “For example, ideally a school like Kelly should have five post-secondary counselors,” Brosnan said.  “But at least we had one.  And now the position is eliminated.  In my mind, (counseling and college prep services) are violence prevention. But Emanuel talks about them like they’re all separate things.”  Bur, Griffin (12 July 2013).  Residents make Chicago Board of Ed face the music.  Blog.  In These Timeshttp://inthesetimes.com/ittlist/entry/15287.  Kelly High’s proposed budget is nearly $4 million less than last year’s, resulting in 23 fewer teachers and the removal of 10 non-teaching staff positions.

Hearings on CPS Lawsuits Begin July 16:  Two lawsuits were filed against the Chicago Board of Education and CPS CEO Barbara Byrd-Bennett by CPS parents regarding the board vote to close 50 schools.  The parents seek an injunction to stop the closings, alleging that the closure plan endangers the safety and development of students, especially the disabled, and is racially discriminatory.  CTU Financial Secretary Kristin Mayle, a former special education teacher who will testify, said that “By uprooting children with disabilities, CPS will severely inhibit their growth and set them back two (2) years in their development.  They also lose the support of the clinicians in these closed schools – the people who have been like family to them for much of their lives.”  CPS school hearings begin Tuesday (16 July 2013).  Progress Illinoishttp://progressillinois.com/news/content/2013/07/16.

Local School Council Approves “Budget of Choice”:  Bell Elementary’s Local School Council  (LSC), at a special meeting called July 15, voted in their own “budget of choice” in response to the budget and deep cuts proposed by CPS.   A LSC ultimately approves the school budget and oversees principal spending.  The Bell LSC also announced that it would not spend the additional $100,000 offered by CPS, since its source was unknown.

Other than Bell Elementary, two other North Side schools that rejected their budgets were given an extra $100,000, the maximum offered to 135 City elementary schools.  Bell LSC asked their principal Sandra Caudill to ignore the extra $100,000 as suspicious, and in order to avoid the appearance of having “rolled over” (LSC member Julie Coffman).

Representatives from elementary schools in low-income areas were watching Bell to see what its LSC would do.  Roberta Salas, representative of one such school, Murphy Elementary, who was present at the special meeting, said that they were afraid to reject their budget.  “You guys are high-profile schools,” she said.  “We didn’t get any money.  We’re afraid to do this because we’re a nothing school.”

CPS budgeting for the upcoming school year represents a change, allocating funds at a set amount per pupil enrolled, and leaving it up to principals to decide whether to spend the money on more teachers, supplies or programs. CPS says that student-based budgeting gives principals more autonomy, while the schools say that it has required them to make tough decisions in spending significantly less money.  A parent group, Raise Your Hand, has collected data from over 150 of the 155 schools affected (of 681 total schools), which show $94.3 million in total budget cuts.

When asked about the source of the additional funds on offer, CPS spokeswoman Kelley Quinn said that these schools had qualified for them to help offset budget reductions.  They would receive either $35,000, $70,000, or $100,000 if their budgets, to be finalized at the end of July, decreased more than 4% above enrollment changes, cut significant bilingual or magnet charter positions, or decreased more than 2% and fell below a certain threshold in the per-student amount.  She would not quantify the threshold or say where the additional funds had been found, only that CEO Byrd-Bennett had been meeting with principals determined to keep cuts as far from classrooms as possible.

Six schools have rejected their draft budgets, four outright, with two schools rescinding previous approvals.  All are in well-to-do areas.

The only South Side school to reject its budget, Kellogg, has not been offered any additional money by CPS.  Its $385,000 cut would mean the loss of 25 general education teachers, some parent aides, and some substitute teachers.  Bell’s proposed budget was approximately $745,000 less than last year’s.  Fitzpatrick, Lauren (16 July 2013).  School council OKs ‘budget of choice.’  Chicago Sun-Times (print edition).


July 2013
Submitted by Krista Ravenscraft

Federal 
Farm Bill 2014:  Consideration of a Farm Bill by Congress has become a battle over food stamps (SNAP). The Senate’s version of the bill would slash $400 million a year from the program, while the House was unable to pass its version requiring an annual $2 billion cut due to debate over additional provisions added by member Republicans, such as allowing states to drug-test food stamp applicants and requiring recipients to meet federal welfare work requirements.  http://nytimes.com/2013/06/22/us/politics/farm-bill-brings-house-senate-collision-path-in-sharp-focus.html?_r=o. Such cuts would affect the benefits of nearly 2 million Americans.  Meanwhile, 47,027,052 Americans are receiving SNAP benefits (March 2013 initial figures), 0.4% more than February 2013, and a 2.8% increase since March 2012.  For Illinois, the numbers are 2,048,658 total (nearly 50% children), 1.2% over February 2013, and an additional 10.4% since March 2012.  http://fns.usda.gov/pd/29snapcurrpp.htm.   More than 820,000 of the total live in Cook County; 88% ofIllinois recipients have an income below the poverty line. 

A week prior to the House vote, Congresswoman Robin Kelly of Chicago (D-IL) announced her participation in the “SNAP Challenge,” inviting fellow representatives to join her in trying to live on the average Illinois benefit of $4.50/day ($1.50 per meal) for a week.   Over two dozen Democratic House colleagues took up her offer. http://dailykos.com/story/2013/06/20/1217238.   Representative Steve Stockman (R-Tex) labeled it a “left-wing publicity stunt,” and said that participating Democrats were “intentionally buying overpriced food and shopping at high-priced chains to make it appear the cuts go too far.”  http://thinkprogress.org/economy/2013/06/19/2178951.

HUD Closes 16 Multifamily Offices and Makes Chicago One of Five “Hubs”:   The U.S. Department of Housing  and Urban Development began the process of consolidating Multifamily Housing Program offices on May 24,  a procedure that is expected to take two-and-a-half years.  Sixteen offices will close entirely, affecting 900 of its 9000 employees.  Four of these offices serve eight of the cities with the highest foreclosure rates.

For example,Floridawill lose two of four offices, although in May its cities made up 10 of the top 25 areas with the highest numbers of foreclosures. HUD’s Office of Field Policy and Management will close 16/80 offices, including the one in Springfield.HUD representatives claim that these actions were caused only in part by sequester cuts, and that President

Obama had previously issued an executive order calling for more efficiencies.  http://www.nonprofitquarterly.org/management/22488 (June 18, 2013); http://costar.com/News/Article/Facility-Closures-Downsizing-HUD-To-Close-Several-Multifamily-Field-Offices/147940 (April 24, 2013).

Congress Unable to Agree on Solution to IRS Scandal Issue:  After hearings held by the House Committee on Oversight & Government Reform and the Senate Finance Committee, the only common ground among Democratic and Republican congressmen was that the IRS tax-exempt unit needed a change, and that they needed clearer guidance on 501(c)(4) rules.  A political commentator for nonprofits recently indicated his agreement with the sentiment expressed by N.Y. State’s Attorney General Eric Schneiderman, that the solution involved dealing with the Supreme Court decision on Citizens United regarding election campaign financing.

“It seems to be that the only reason in the post-Citizens United world to use a 501(c)(4) instead of a super PAC – which enables you to spend all the money you want in support of or in opposition to a candidate, is to conceal your identity,”  Schneiderman said.  The commentator urged the nonprofit sector to propose its own policies for donor disclosure before state and/or federal agencies do the deciding for them. Cohen, Rick (June 17, 2013).  Congress in quagmire over 501(c)(4) guidelines.  http://nonprofitquarterly.org/policysocial-context/22491

Congressional Appropriations Committee Demands More Cuts to Shrinking Community Development Block Grants:  The House’s Republican-led Appropriations Committee has responded to President Obama’s 2014 budget request for a $2.79 billion allocation for community development block grants (CDBG) with only $1.6 billion. Although this program provides crucial resources for neighborhood development, it has recently been whittled down on an annual basis, dropping from a $4.45 billion appropriation in 2010 to $3.5 billion in 2011, and just over $3.0 billion in FY2012.   The President’s 2014 request approximates the request that President Gerald Ford made in the program’s first year of funding.  http://www.nonprofitquarterly.org/policysocial-context/22506 (June 21, 2013).

Immigration Reform Will Decrease Federal Budget Deficits By $197 Billion In 2014-2023:  The non-partisan Congressional Budget Office on June 18 released a report estimating that immigration reform would decrease federal deficits over the long-term.  Reform opponents had assumed that making the approximately 11 million new citizens eligible for Obamacare and other benefits would add to the deficit, but it was found that the economic benefits, such as millions of new taxpayers, would significantly outweigh any additional costs.  They would also contribute more than $600 billion to Social Security at a time when Baby Boomers would be putting the system under stress. Center for American Progress (June 19, 2013). 

State    
General Assembly Spares Early Childhood Education.   The FY 2014 budget as passed by the Illinois House and Senate is considered a partial victory by early childhood educators since it did not cut early education by $25 million as it had for 2013, but left the Early Childhood Education Block

Grant at its current level ($300 million).  Since 2009, almost $80 million had been cut, resulting in 22,000 fewer program slots.  K-12 education will also remain at current levels; general aid to school districts will increase by about $155 million while remaining less than for FY2012.  Districts will continue to receive a prorated 89% of what they are entitled to, losing an average $275 per pupil ($380 inChicago).

Governor Quinn had proposed a $300 million cut toIllinoiseducation, $150 million from general state aid and about $145 million from school transportation reimbursements.  He has not yet approved the General Assembly’s alternatives.  http://progressillinois.com/posts/content/2013/06/04.

The Illinois State Board of Education has had a $320.9 million (7%) reduction in general state aid since FY2009, resulting in 6400 full-time teacher and aide positions cut and districts reducing or eliminating academic, extracurricular and enrichment activities.   Transportation has been reduced by $133.7 million (39.4%) in the same period, forcing longer bus routes and reduced or eliminated field trips.  Consequently, Illinoisranks 50th in the state proportion of K-12 funding (28% funds from ISBE and up to 61% from local funds; the national average is 47% from the state and 44% from local sources). ISBE FY 2014 Budget Information (http://isbe.state.il.us/budget/html/fy14-budget.htm).

State Pension Issue Referred to Committee:  Gov. Pat Quinn called a special session of the General Assembly on June 13 to try to break the gridlock between leading Democrats on how to overhaul theIllinoisretirement system.  The previous week, he had asked Senate President John Cullerton (D-Chicago) to call a vote on the bill passed by the House.  Cullerton agreed, but asserted that there were not enough votes in favor for it to pass.  Gov. Quinn formed the conference committee to strike an agreement between the houses, citing the “ongoing refusal” of Cullerton and House Speaker Mike Madigan “to work together.”  Three Democrats and two Republicans from the House and the Senate will sit on the panel, which Quinn gave an early July deadline for presenting something for a vote.

Quinn favors the plan previously supported by Madigan which would save more money by scaling back benefits for retirees and current state employees.  Cullerton says it is unconstitutional, and instead promotes a less onerous plan supported by organized labor that would let retirees keep their current benefits provided they forego health coverage.  If they wanted to keep health coverage, they would receive lower retirement benefits.  Garcia, Monique (18 June 2013).  Quinn, lawmakers agree to form pension reform committee. http://chicagotribune.com/news/politics/clout/chi

Illinois House Fails to Vote on Marriage Equality After Senate Passes Act:  Another measure which failed to pass to Gov. Quinn for his signature in the spring session was the Religious Freedom and Marriage  Fairness Act, which would have established marriage equality for LGBT citizens of Illinois.  Its House sponsor, State Rep. Greg Harris (D-Chicago), said that he did not have enough votes to pass it before time ran out. LGBT couples whose relationship has been recognized by Illinois still face major problems unknown to  heterosexual couples such as being barred from giving medical consent for their partners, or being required to produce a civil-union license at in-state hospitals.  The U.S. Supreme Court will this month rule on a case challenging the Defense of Marriage Act (DOMA), which defines marriage as between a man and a woman and prevents the federal government from recognizing same-sex marriages, even in states where it is legal. It also states that same-sex couples may not receive survivor’s benefits from Social Security. http://www.progressillinois.com/quick-hits/content/2013/06/21

Chicago

Local Raid on Illegal Worker Increases Efforts to Stop Deportations During Immigration Debate:

On Wednesday June 12, undocumented Guatemalan worker Israel Lopez Bautista was arrested inChicago.  Bautista, 43, a father of three who has been living inAlbanyParkfor six years, gathered daily with other day laborers atGompersParkin order to look for work.  After arrest there by customs agents, he was taken to the Dodge County Detention Facility (Wis.) for detention and possible deportation.

Following the raid, fellow day laborers contacted the Latino Union of Chicago, which organized a campaign demanding Bautista’s release.  Local faith-based and community groups joined with the Latino Union to apply pressure, making over 100 phone calls to the Chicago Field Office of U.S.Immigration and Customs Enforcement (ICE).  Latino Union Executive Director Eric Rodriguez was on the way to meet with U.S. Rep. Luis Gutierrez (D. IL-4) for help when he got a call that

Bautista was going to be released and could soon be picked up.  Bautista was dropped off in Cicero, with no information on where he was or how he could get home.  ICE had raided at least one other day laborer site in Chicago the day they arrested Bautista, resulting in three arrests.  Bautista has a July court date on his potential deportation.  “Day laborers throughout the country are the most vulnerable in our society,” said Rodriguez.  “They face wage theft, they face high rates of injury on the job, there are high rates of police harassment and they have virtually no protections.” http://progressillinois.com/posts/content/2013/06/14

City Council Approves New Renting Ordinance:  On June 5, the Chicago City Council passed the “Keep Chicago Renting” ordinance that provides renters in foreclosed buildings with additional protections. Introduced last July by Ald. Richard Mell (33rd), the ordinance allows tenants to stay in their homes during the foreclosure process until the property is sold.  Tenants must be notified when their building is being foreclosed upon and when it is turned over to a new owner.  Lenders who acquire foreclosed buildings have to pay tenants who are forced to leave their home before the property is sold $10,600 per unit.  They may also keep the renter’s current lease until the building is sold, at a maximum rent increase of 2% annually.  The ordinance takes effect 90 days after its passage and publication.

The ordinance’s main goals are to prevent new vacated properties inChicago, and to help law-abiding residents stay in their homes.  “Renters are the hidden victims in this foreclosure crisis,” said Diane Limas, Albany Park Neighborhood Council.  “We know that vacant, foreclosed multi-unit properties facilitate crime and gang violence in our communities, especially in our communities of color.”  http://progressillinois.com/posts/content/2013/06/05

Chicago Public School’s Food Services Is Probed For Second Time in Two Years:  School officials have asked the CPS Inspector General to review a recent preliminary decision to drop current food vendor Chartwells-Thompson Hospitality and Preferred Meal Systems in favor of a division of Aramark Corporation.  Attention will be focused on the role, if any, of the new Director of Nutritional Support Services, Leslie Fowler. Fowler worked for Aramark until last July as a district manager in Rochester, NY when she succeeded Louise Esaian, who had resigned amid allegations that she had accepted expensive gifts from Chartwells officials.  CPS declined to make Fowler available for comment.  Although the decision was to have been made by the procurement unit, with Fowler having no vote, Chartwells complained that she was very involved,  asking pointed questions of the four companies under consideration.  This is a one-year deal, with options to renew for four additional years, having an annual value of over $100 million a year.  The Board of Education is required to approve any deal, which it has not yet done in this case.  http://chicagobusiness.com/article/20130620/BLOGS02

Teacher’s Union Fears More Layoffs:  The General Assembly in its spring session also failed to pass a measure that would have let Chicago get out of paying a portion of CPS’s pension payments for two years. As a result, CPS has an extra $412 million on top of $200 million in pension payments for the 2013-2014 budget year beginning July 1, for which it has reported a $1 billion budget deficit.  CPS says that it is looking at alternate ways of saving money as a result of these payments, for example reducing staff in the central office, pledging that class sizes will not grow.  It has not yet released its 2013-2014 annual budget, which must be approved by August, nor budgets for individual schools.

The teachers’ union estimates that 130-350 teachers could be cut due to school closings, with possibly more once principals go through their individual school budgets.  Source: Chicago Tribune.

Emanuel Names New School Board Member to Replace Pritzker:  Mayor Rahm Emanuel has named Deborah Quazzo to the Chicago Board of Education to replace Penny Pritzer, who resigned shortly before her nomination for U.S. Secretary of Commerce.  Quazzo is a managing partner of GSV Advisors, which does consulting for education and business-service companies, and co-founder of ThinkEquity, an investment bank.  She has also worked with News Schools of Chicago and KIPP Chicago.

The Chicago Teachers Union’s response, through President Karen Lewis:  We are unsurprised at the tone deafness of the mayor who clearly has an agenda when he appoints to the Board of Education yet another charter school proponent and Bruce Rauner campaign contributor.  We are surprised he didn’t appoint Juan Rangel [involved in recent scandal involving funding for his charter school]… Once again, this is a missed opportunity to include a compassionate voice that will fight for an equitable, thriving school district for all students. Source:  Crain’s.



June 2013
Submitted by Krista Ravenscraft

Federal
The IRS “Tea Party Scandal:” It actually began in March 2010, at a time when the Tea Party movement was at its strongest. IRS staffers at the Cincinnati office, Exempt Organizations division, started flagging applications for 501(c)(4) tax-exempt status from groups with politically-themed names such as “Take Back the Country” and “We the People,” as well as those containing the words “Tea Party” and “patriots.” Staffers forwarded these applications to specialists for a more rigorous review.

In total, 298 applications received the more detailed inquiry. Seventy-two had “Tea Party” in their names and 13 had “patriots,” while 11 included “9-12,” representing the 9/12 movement begun by conservative media figure Glenn Beck. The other applicants were “political action type organizations involved in limiting/expanding government, educating on the Constitution and Bill of Rights, (and) social economic reform/movement,” such as groups planning to focus on governmental debt and spending, taxes, or making America a better place to live (from leaked timeline in a draft report by the Treasury Inspector General for Tax Administration).

Lois Lerner, who oversaw the Exempt Organizations division, became aware of what was happening in June 2011, when she directed staffers to change their application review process. Republican Congressmen, who had been receiving complaints of IRS harassment from conservative groups, took official notice of the differences in application review in spring 2012, scheduling a hearing. At that time, then-IRS commissioner Douglas Shulman, a George W. Bush appointee, denied that the agency was targeting conservative applications, and the controversy died down. Then on May 10, 2013, Director Lerner publicly apologized for the differential treatment, explaining it as due to an unanticipated increase in 501(c)(4) applications (from 1500 to over 3400 between 2010 and 2012).

The elements of the alleged “harassment” included such requests as for information about the groups’ members, donors, and any “close relationships” with candidates for public office, as well as transcripts of radio interviews by staffers and print copies of news clippings mentioning the groups. Recipients claimed that these requirements were “unwieldy, impossible to fulfill, and a veiled attempt to intimidate them as the 2012 elections approached.”

President Obama responded to Lerner’s apology by stating that he first learned of the alleged situation in the day’s news coverage. If true, he said, the practices were “outrageous,” and those responsible had to be held fully accountable because of the absolute integrity required of the IRS as an independent agency (http://www.huffingtonpost.com/2013/05/13/obama-irs-scandal_n_3266577.html).

Several conservative 501(c)(4) organizations spent enormous sums to influence the 2012 election, drawing accusations from campaign watchdogs that they flouted the law under which 501(c)(4)s cannot make politics their “primary purpose.” Demands from the watchdogs that the IRS and the Federal Election Commission crack down on these organizations for spending too much time and money on politics have gone unanswered.
Pundits have opined that any future IRS efforts in this area will be diminished in response to this scandal.

The first hearing by the House Ways and Means Committee was announced for a week after Lerner’s apology by House Majority Leader Eric Cantor. The Senate Finance Committee took testimony on May 21. During both hearings, it was pointed out that most of these organizations should have applied as 527 nonprofits, but they chose 501(c)(4) instead so they would not have to disclose their donors. The 501(c)(4) regulation was enacted in 1958 in a much different political climate, before the Citizens United ruling and other changes in election finance and lobbying.

A nonprofit policy analyst has concluded from the hearings that what happened at the IRS has two components: 1) “(T)he rules defining and governing 501(c)(4) social welfare organizations are unclear and ill-defined, may be based upon an erroneous mis(sic)interpretation of the statute, and are simply inadequate for the present-day management and contours of elections today;” 2) (T)he IRS, or at least the Exempt Organizations unit, appears to have been grossly mismanaged for a very long time, floundering under management and top leadership who seem ill-equipped for the task…”
He also cited Congress for its “inadequate oversight of the Exempt Organizations part of the Service,” and the nonprofit sector for letting the problem of out-of-control 501(c)(4)s fester, diminishing the credibility of 501(c)(3) public charities, since most of the press and public find the distinctions between the two “arcane and elusive.” Cohen, Rick (22 May 2013). Senate finance committee and the 501(c)(4) morass. Nonprofit Quarterly. Retrieved 28 May 2013, from http://www.nonprofitquarterly.org/policysocial-content/22337. See also, Cohen’s live blog from the May 22 hearing of the Committee on Oversight and Government (http://www.nonprofitquarterly.org/politicalsocial-content/22331). Following the hearings, the President/CEO of the National Council of Nonprofits, Tim Delaney, issued a written statement: “…As more facts emerge…the National Council of Nonprofits calls on policymakers and the news media to strengthen public respect for, and not exacerbate ignorance of, the laws guiding and distinguishing the nonpartisan work of charitable nonprofits…”

Trisha Lester, Vice President of the North Carolina Center for Nonprofits, has said, “It’s important for 501(c)(3)s to communicate with their shareholders about the differences between these nonprofits and 501(c)(4) social welfare organizations to lessen any confusion that may exist. The former group may not engage in any political activity as that is strictly prohibited by the IRS.”

While organizations determined to be tax-exempt under 501(c)(3) may engage in limited lobbying, they are expressly prohibited from engaging in partisan political electioneering. 501(c)(4)s may engage in some political activities. Lucas, Jill Warren (15 May 2013). Some nonprofits concerned that IRS scandal will stain their good work. Philanthropy Journal. Retrieved May 28, 2013, from http://www.philanthropyjournal.org/news/top-stories.

Proposed Food Stamp Cuts: The U.S. House and Senate have proposed in their respective farm bill budgets that the federal government tighten its belt by cutting billions of dollars from food programs benefiting the poor. The principal means selected by both is removing categorical eligibility, already used by most states to reduce enrollment. The House bill cuts $20.5 billion in food stamps (SNAP, Supplemental Nutrition Assistance Program) over 10 years, eliminating benefits for nearly 2 million low-income individuals, mostly working families with children and senior citizens (the Senate bill includes $4 billion in cuts over 10 years). These cuts will also remove benefits from 210,000 poor children currently qualifying for free school meals.

According to Stacy Dean, Vice President for Food Assistance Policy with the Center on Budget and Policy Priorities (CBPP), the House proposal would cut food stamps from people with minimal assets, such as poor families who have a car for transportation to work, or those with a small amount of savings just above $2000. At a time when wealth has declined for 93% of households, poor families who have managed to build up a modest nest egg will be rewarded by hunger. The typical food stamp family, she says, doesn’t fit the “shiftless poor” or “welfare queens” stereotypes, but is instead a mother of two young children with monthly earnings just above the program’s monthly gross income limit (in 2013, $2069 for a family of three). On average, families above that limit who still qualify have combined childcare and rent costs exceeding half of their wages. The approximately $100 per month they receive in benefits covers approximately one-fourth to one-fifth of their monthly food budget.

The House proposal would also apply the “heat and eat” policy used by some states to coordinate heating assistance payments with food stamps. Consequently, about 850,000 low-income households representing about 1.7 million individuals would lose an average of $90/month in food stamp benefits (estimates by CBPP).

In actuality, about ¼ of those who qualify for benefits are not receiving them (federal estimates). Reasons may include fear of stigma or bureaucratic barriers in the application process. Many immigrant families are also excluded because of their legal status (http://www.inthesetimes.com/working/entry/15033.)

Automatic Sequestration Cuts Extend Recent Trend of Cuts to Law Enforcement and Sexual Victim Services: In fiscal year 2013, sequestration and related cuts will reduce or cut services to more than 955,000 victims of sexual violence, and threaten the U.S. Army’s ability to add 829 military and civilian sexual assault response coordinators to address the epidemic of sexual assault in the military.

Sequestration will deprive 337,000 victims of domestic violence, child sex abuse, and adult sexual assault of critical support and services received from the Crime Victims’ Fund (established under the Victim of Crimes Act, or VOCA) in order to help their recovery. Such assistance includes sexual assault services, support for crisis intervention, assistance with the criminal justice process, counseling, and investigation and prosecution of child and senior abuse in addition to compensation for crime victims.

Although the Crime Victims’ Fund doesn’t cost taxpayers anything, being funded by fines and penalties levied on federal criminal offenders, it did not escape Congressional budget-cutting attention. Sequestration is expected to reduce VOCA victim assistance grants to the states by $37.2 million (resulting in FY2013 alone in more than 377,000 victims losing services access).

Congress also asked the Department of Justice, administrator of these funds, to cut management and administration expenses from the VOCA fund for the second consecutive year, compounding the sequestration cuts. This cut alone is expected to reduce the number of victims served by nearly 578,000 (total fewer victims served in FY2013 estimated at 955,843).

In 2013, Congress finally reauthorized the Violence Against Women Act (VAWA) after a two-and-a-half year delay. This act provides for services and law enforcement for victims of domestic violence and sexual assault. Then sequestration slashed program funding so that at least 106,000 fewer victims will receive services. This comes at a time when 88% of state domestic-violence coalitions report an increase in demand for services, while 69% report funding decreases (National Network to End Domestic Violence).

Most affected agencies and facilities find themselves having to choose between cutting services or staff, or closing their doors. The Policy Executive Resource Council found this year that 56% of 700 agencies surveyed reported that the poor economy was driving an increase in domestic violence, up from 40% in a 2010 survey. Stegman, Erik (21 May 2013). 3 things you need to know about sequestration and cuts to federal public safety programs. Retrieved May 28, 2013, from http://www.americanprogress.org/issues/poverty/news/2013/05/21.

State
Sequestration harms long-term unemployed: At the beginning of May, 2013, it was forecast that in the near future, long-term Illinois unemployed would receive an approximately $50 per week cut in their jobless benefits as the effects of sequestration continued to “trickle down” to the state. At that time, about 240,000 Illinoisans were receiving unemployment benefits, of which 160,000 received state-funded benefits for up to 28 weeks/year which would be unaffected. Starting May 28, a 16.8% cut would hit the remaining 60,000 who had exhausted their regular benefits and were receiving up to 38 additional weeks of emergency benefits funded solely by the federal government. The usual weekly benefit under either program was approximately $300-$320 (Illinois Department of Employment Security).

The only reason the cuts did not begin with sequestration’s onset in March was that Illinois, like many states, had not had time to change computer programs which generated payments. Starting instead in May will spread the benefit reduction over a shorter period, increasing the percentage cut beyond what it would have been in March (10.7% through September). The rationale expressed by Illinois officials for the late May start was that it would allow recipients more time to plan for their benefits reduction (Illinois Department of Employment Security). According to the U.S. Labor Department, the District of Columbia and 23 states had cut benefits as of May 1. (http://www.chicagobusiness.com/article/20130501/NEWS02/13050)

Sequestration adds to the wait for low-income housing: The Cook County Housing Authority, which provides rental assistance for low-income families in Cook County suburbs, has never had enough resources to provide assistance to all those qualifying for help. As a result, it keeps a waiting list. Since the sequester, however, fewer than usual families are being taken off the list. All those on the current list have been waiting since 2001, says Sheryl Sieling, Director of the Housing Choice Voucher Program for the agency. Those waiting make do by living with family, in substandard housing, or moving between homeless shelters as their temporary residency comes to an end.

Federal Public Defender’s office pinches pennies to provide low-income defendants with right of representation: The Chief Federal Defender for the Central District of Illinois recently had to run an errand for the office since he had had to lay off three support personnel due to the sequester. He was looking for a computer battery. He also no longer had a budget for unexpected expenses, so they had to come out of his employees’ pay. Fortunately, he found an extra battery at another office. Workers at the Central District were actually luckier than those at other federal public defender offices, having fewer required days off, but their luck could end if they got an expensive case that required extraordinary expenses such as expert pay or travel expenses. Attorneys with the U.S. Attorneys Office, his opponents, don’t have any furloughs scheduled. If the federal public defender’s office loses its ability to represent clients because of the effects of sequester, the Court will have to assign representation to private attorneys, who will probably cost the taxpayers more. http://www.wbez.org/news/tracking-sequester’s-impact-illinois.

Illinois Senate passes sex ed bill. The Illinois Senate recently passed a comprehensive sex education bill (HB 2675) by a 37-21 margin. It calls for schools with sex education classes for grades 6-12 to stress abstinence, but also discuss contraception and provide information on how to avoid contracting sexually transmitted diseases (STDs). These schools would also have to adopt medically-accurate and evidence-based information into their lesson plans. A similar version of the bill passed in the Illinois House in April.

Planned Parenthood of Illinois applauded the vote, issuing a statement by President/CEO Carol Brite: “…Studies show that sex education that covers contraception and disease prevention results in teens who are more likely to delay sexual activity and use protection when sexual activity does occur. More than 30,000 teens in Illinois become pregnant each year, and adolescents account for the majority of reported sexually transmitted infections in the state…” http://www.progressillinois.com/news/content/2013/05/22/illinois.

Chicago
Chicago Board of Education finalizes decision on school closings: The May 22 meeting, open for public comment, considered the closing of 53 elementary schools and one high school, charged with having underutilized space and an unacceptable level of performance. Chicago Public School (CPS) CEO Barbara Byrd-Bennett alleged that allowing this condition to continue would perpetuate an unbalanced budget. The closings followed by mergers with other schools represent the largest single closing of urban public schools in U.S. history.

The public representatives present, including parents, community leaders, City Council members, teachers’ union leaders and teachers reiterated their previous expressions of opposition to the closings. They called the plan unworkable in its proposed speed and scale, unlikely to save money or improve education, racist for concentrating 90% of closures in majority Black neighborhoods, and damaging to the involved schoolchildren, especially those with learning disorders or other disabilities. Individuals also pleaded for their own schools, some using rational arguments while others begged, shouted, cursed or chanted. They pointed to a recommendation by a panel of retired judges to spare 13 schools.
At the end, CEO Byrd-Bennett and the school board gave a last-minute reprieve to spare four schools and postponed another school’s closing for a year. Board members voted unanimously (6-0) to close all but one proposed closing that would deprive a largely Latino neighborhood of all its public elementary schools (still 4-2 in favor).

Chicago Teachers Union (CTU) President Karen Lewis characterized the decision as by “an unrepresentative, unelected corporate school board,” calling the underutilization crisis manufactured and claiming that more than 40,000 students would lose at least 3-6 months of learning as a result.
The same day as the vote, citizen lobbyists were in Springfield attempting to round up votes for legislation that would impose a moratorium on school closings in Chicago. The previous week, suits were filed on behalf of citizen plaintiffs and the CTU, claiming that CPS was violating the Americans with Disabilities Act and engaging in racial discrimination. The next day, CTU started training registrars to sign up voters, many of who would be unlikely to reelect Mayor Rahm Emanuel in 2016. Moberg, David (22 May 2013). The axe falls on 50 Chicago public schools. Retrieved May 23, 2013, from http://www.inthesetimes.com/working/entry/15041.

CEO Byrd-Bennett issued her own press release following the decision, thanking the Board for “their tireless efforts and commitment” and individuals who “share(d) invaluable feedback that helped shape and guide” the process. The release also detailed how CPS would “redirect its limited resources” during the process, including improving higher-performing “Welcoming Schools” with classroom air conditioning, a library in every school, cosmetic improvements, iPads for all students grades 3-8, and customized safety plans which would also provide safe routes to and from school.
Chicago Board of Education votes to close 50 schools, CTU responds (UPDATE) (22 May 2013). Retrieved May 28, 2013, from http://www.progressillinois.com/news/content/2013/05/22.

Cabrini Rowhouses residents sue CHA: The Frances Cabrini Rowhouses on the Near North Side are one of the last vestiges of the Cabrini-Green public housing project. This month,
its residents represented by the Cabrini-Green Local Advisory Council sued the Chicago Housing Authority, alleging broken promises to rehab the buildings and preserve its status as all low-income public housing. The CHA’s “Plan for Transformation” spared the rowhouses from destruction in 2000, and it was announced that they would be rehabbed
and remain all public housing.

The suit alleges that residents were relocated between late 2006 and Spring 2008 so that the rehab could take place, but only one of four phases has been completed. Today, 146 of more than 546 units have been rehabbed, while the remaining 400 sit vacant when 60,000 low-income families are on the CHA waiting list. It was only in September 2011 that CHA announced a reversal of its 2000 decision, supporting the complex’s conversion into mixed-income housing. Only one-third of the units would thereafter be set aside for public housing.
The CHA’s public information officer, Wendy Parks, has stressed that plans are not “a done deal,” and that the agency has not announced any decision on the fate of the rowhouses.

The CHA’s latest housing plan, “Plan Forward,” has been characterized by rowhouse representatives as incorporating the same failed policies as the previous “Plan for Transformation.” Chicago Housing Initiative spokesperson Jessie Avraham points out that CHA policies have resulted in the net loss of over 16,000 low-rent apartments in the public housing pool.
President of the Advisory Council Carol Steele has lived in Cabrini all of her 62 years, including when the nearby high-rises were associated with crime, urban blight, and gang turf battles. “We weathered the storm,” she said. “Now that Cabrini is a nice safe neighborhood, they want us to go.” http://www.chicagonow.com/chicago-muckrakers/2013/05



May 2013 
Submitted by Krista Ravenscraft

FEDERAL        

On April 10, President Obama released his proposed budget for Fiscal Year 2014, after the House and Senate had adopted their own versions.  It provides for intentional spending cuts in place of the across-the-board sequestration slashing.  But it repeats the White House’s articulated desire to impose a 28% cap on itemized deductions, including those for charitable giving, which would take billions of dollars away from financially stressed charitable nonprofits.  Although fellow Democrats do not support this provision, nonprofits are nevertheless mobilizing against its potential passage.

At a news conference, President Obama said, “If you’re serious about deficit reduction, then there’s no excuse to keep these loopholes open.  They don’t serve an economic purpose.  They don’t grow our economy.  They don’t put people back to work.  All they do is to allow folks who are already well-off and well-connected game the system.”  Donovan, Doug and Perry, Suzanne (April 10, 2013).  Obama renews effort to limit charitable deduction.  The Chronicle of Higher Education.  Retrieved 22 April 2013, from http://www.chronicle.com/Obama-Renews-Effort-to-Limit/138475.

In the White House’s most recent attempt to promote this limit during the January 2 budget deal, the value of itemized deductions was actually increased by raising the top marginal income-tax rate to 39.6% from 35 percent.  As a result, donors in the highest tax bracket can get a savings of 39.6 cents for every dollar donated.  The White House estimates that imposing the 28% rate would generate $321 billion in additional revenue through 2021, and would affect only a minority of taxpayers, those who itemize deductions.  Nonprofit advocates counter by saying that it could reduce deductions by as much as $9 billion annually.

Republican Senators John Thune (R-SD) and Roy Blunt (R-MO) have introduced an amendment with the expressed intention in the purpose statement of preventing the reduction in the charitable deduction.  However, the legislative text of the Thune/Blunt amendment makes no reference to charitable deductions, but instead reduces the total revenue target of the FY2014 budget by approximately half.  It provides no specifics as to which loopholes might be closed in order to attain this reduction.

The President’s budget proposal contains a number of provisions which offer funding for programs of benefit to various populations served by nonprofits.  The most widely-applicable provisions, however, are not strictly financial:  the phasing-in of required electronic Form 990 filing for all nonprofits so that data is accessible in machine-readable form; and the reimbursement of allowable indirect costs to federal grantees (through a minimum reimbursement rate of 10% of direct costs).  Cohen, Rick (18 April 2013).  President Obama’s FY2014 budget:  The issues for nonprofits.  Nonprofit Quarterly.  Retrieved 22 April 2013, from http://www.nonprofitquarterly.org/policysocial-context/22155.


ILLINOIS 

As time passes, more Illinois nonprofits offering social services and receiving a significant proportion of their funding from the state are having to decide whether to shut their doors or continue their efforts to assist increasing populations with reduced services compelled by growing piles of government IOUs.  When services cease, clients such as drug addicts may turn to emergency rooms instead for treatment, which increases the financial strain on hospitals and adds to their own state IOUs.

The Illinois Comptroller reported 200,440 total vouchers delayed as of March 24, which represents $6,950,561,899.31 in general fund payments.  Olsen, Dean (Mar. 24, 2013).  DeadbeatIllinois:  $11M  IOU forces charity to turn away clients.  Gatehouse News Service.  Retrieved 22 April 2013 from, http://www.rrstar.com/news/x1959361933 (Rockford Register Star).    

This is despite Illinois filling its coffers with an additional $5.8 billion in taxes in FY2012 over FY2011, the highest increase of any state in terms of raw totals.  Individual income taxes represented  most of the difference, up 8.1 percent.  Total U.S.state tax collections for FY2012 neared $800 billion, a record high surpassing pre-recession levels.  Source: U.S.Census Bureau.  Maciag, Mike (April 12, 2013).  State tax collections reached record high in 2012.  Retrieved 22 April 2013, from http://www.governing.com/blogs/by-the-numbers/State-Tax-Collections. 

CHICAGO

Mayor Rahm Emanuel’s neighborhood development plans include an initiative to group together several projects and offer them to investors through the crowdfunding platform Kickstarter. The rationale is that by grouping the several projects into a single category, they will have more visibility and therefore attract more investors, representatives of communities investing in their own neighborhoods in order to boost the local economy.  It remains to be seen whether enough investors will come forward from economically depressed communities, and if not, whether the appeal will attract investors from more affluent communities outside Chicago.

The Mayor’s Office and Cook County Board President Toni Preckwinkle recently announced the opening of One Summer Chicago 2013, a program begun in 2012 which provides summer employment opportunities, camps, and recreation forChicago’s youth.  Last year, 54,000 young people ages 14-24 applied for approximately 17,000 employment opportunities; as many or more are expected to apply for 2013’s 18,000 jobs (combined with an estimated 190,000 activities).  Online applications are being accepted through May 31 at http://onesummerchicago.org for employment to last approximately one month. 

On April 17, Mayor Emanuel issued a statement in response to the U.S. Senate’s failure “to pass comprehensive gun safety legislation.”  “Today we saw politics get in the way of what should be our first priority:  protecting residents and making communities safe for our children…(W)e will not wait for Washington in order to meet our own responsibilities as a city to public safety…(S)ince the majority of illegal firearms found at crime scenes come from outside our city, we need Washington to follow President Obama’s leadership… We cannot allow Washington’s dysfunction and the voices of special interests delay our work…”  Mayor Rahm Emanuel, Press release (April 17, 2013).  Retrieved 23 April 2013 from, http://www.cityofchicago.org/city/en/depts/mayor/press-room.

The Chicago Teachers Union continues its campaign to halt the proposed closing of 54 public schools in June, among other activities issuing a study purporting to show Chicago Public Schools’ ineptitude in closing a few schools last year (http://progressillinois.com/quick-hits/content/2013/04/16/ctu-report), and leading a bus tour of neighborhoods slated for closings for legislators, stakeholders, and press members.  Participants walked the same routes students from closed schools would need to walk in order to get to their new schools, passing boarded-up buildings and vacant garbage-strewn lots.  They spoke with parents and students who would be affected, as well as students from previously closed schools.

Congratulations to the two Chicagononprofits which received recognition and $750,000 each as 2013 winners of the MacArthur Foundation international awards for creativity and effectiveness, the institutional equivalent of its individual “genius” awards:  Children and Family Justice Center at Northwestern University, which protects and advocates the rights of young people in the juvenile justice system; and Southwest Organizing Project, which educates, mobilizes, and empowers Chicago communities to overcome foreclosures and violence.




April 2013
Submitted by:  Krista Ravenscraft

FEDERAL 

As the frigid last days of March shiver down outside, the air inside Capitol Buildings is as fevered as a July noon on Oak Street Beach. The U.S. Supreme Court has just taken up the issue of same-sex marriage to rule on California’s Proposition 8 ban (Hollingsworth v. Perry), and in a related case, on the 1996 federal Defense of Marriage Act (DOMA). Rulings on both cases are expected by the end of June.

On the sequester front, the House and Senate were able to agree on a $982 billion spending bill that funds federal government programs and operations through September 30, the end of the fiscal year. The $85 billion in cuts to domestic and defense spending were retained, although some adjustments were made in response to media attention on a few isolated hardships.

Separately, they approved their own budgets covering the next decade. Although the Democratic-controlled Senate’s plan is more generous to the domestic sphere than that of the Republican-dominated House, it substitutes other spending cuts, claiming to raise $975 billion over the next 10 years by closing loopholes and cutting “wasteful breaks that primarily benefit the rich.” Nevertheless, it is the Democratic plan that suggests limiting itemized deductions.

The House would retain the sequester cuts, add more, repeal the Affordable Care Act, transfer Medicaid and food stamp programs to states as block grants, and revise Medicare without new tax revenues. The new joint bill “includes provisions that will blunt the impact of the sequester” (Washington Post). Some agencies are given permission to reallocate funds along program lines to protect some programs from the impact of the cuts. The most prominent example among these is the Department of Defense, under which the Pentagon immediately announced its plan to delay planned furloughs for as many as 800,000 civilian employees. Other beneficiaries by amendment were the Department of Agriculture, Homeland Security, disease research, and highway and transit programs.

The only safety net provisions to get similar treatment were Child Care Block Grants and Head Start. Efforts to benefit other areas of domestic discretionary spending were nonexistent, although Sen. Ted Cruz (R-Tex) did try to defund the Affordable Care Act. Cohen, Rick (25 March 2013). Continuing budget resolution sidesteps saving social safety net. Nonprofit Quarterly. Accessed March 27, 2013, at http://www.nonprofitquarterly.org/policysocial-context/22014

Leaders of community organizations met with Congress March 18-22 as part of the annual event “Foundations on the Hill,” sponsored by the Council on Foundations, Alliance for Charitable Reform, and the Forum of Representative Associations of Grantmakers. The purpose of this event is to make sure elected representatives clearly understand the link between charitable giving and thriving communities, creating jobs, and economic growth, spurring innovation, and improving education and health, as well as crisis relief and human services.

U.S. Rep. Jan Schakowsky of Illinois (D, IL-9) has sponsored a bill that would extend the protections and benefits enjoyed by full-time employees to part-time workers (The Part-Time Worker Bill of Rights Act of 2013, HR 675). In a March 26 Chicago hearing, labor advocates and academics presented testimony as to the growth of part-time jobs at the expense of full-time jobs, especially in the retail industry. This trend is expected to increase significantly when Obamacare is fully implemented. Part-time workers also suffer because of schedule uncertainty, and the overall industry trend toward decreased wages. More than one in 10 U.S. workers work in retail, making it the largest national employer. At the hearing, labor activists called retail the “underemployed industry.” Fortino, Ellyn (26 Mar. 2013). Labor advocates hold hearing to address part-time workers’ economic struggles. 

STATE
 
State legislatures continue their efforts to improve their budgets by coming up with new fees for nonprofits. Recent Minnesota legislation would authorize municipalities to establish street improvement districts, charging nonprofits and others “street improvement fees” for up to 20 years on anything from street lighting to sidewalks. The Minnesota Council of Nonprofits, on behalf of state nonprofits, opposed the bill because of its direct financial impact on organizations exempt from property taxes, street improvements having previously been paid out of property tax funds or
special assessments. Nonprofit Advocacy Matters (25 March 2013). Accessed March 27, 2013, at http://www.mail.aol.com/37605-111

The potential effects of the sequester cuts on Illinois have been estimated at: *$33.4 million in funding for primary and secondary education (460 teacher 4 and teacher aide jobs). This could be a drop of 39,000 students and reductions in 120 schools receiving aid. Disability programs could lose $24.7 million.

*Millions in cuts will slash programs in pollution prevention; public safety; domestic violence; and health and human services (including $357,000 from vaccination programs). *Deep cuts to national labs (Fermilab, Argonne). U.S. Rep. Bill Foster (D, IL-11) has said that cutting investments in science and technology is bad for American economic competitiveness and bad for the 11th District, with effects on the local economy.
*Defense – In Illinois, 14,000 civilian Department of Defense employees may see furloughs. Overall gross pay will be dropped by approximately $83.5
million. Army base operations will see $19 million in cuts. Rezin, Ashlee (28 Feb. 2013).

How the sequester would hurt an already ailing Illinois. But no one really knows what the effects of the sequester will be on local communities, in part because federal agencies have not announced what they are going to do in response.

CITY OF CHICAGO

On March 17, Mayor Emanuel announced the proposed creation of “opportunity areas” in seven targeted Chicago neighborhoods, leveraging $2.9
billion ($330 million public funding and $2.6 billion private funding), to consist of “new economic development, housing, and quality of life improvements for residents and businesses.” The City and the private sector will help these communities “showcase and support their entertainment, economic and cultural assets.” Each community has its own development goals, put together in a process begun last fall by representatives
from City departments and sister agencies. Targeted communities include Bronzeville, Eisenhower Corridor, Englewood, Little Village, Pullman, Rogers Park, and Uptown. Office of the Mayor, City of Chicago (17 March 2013). Mayor Emanuel announces “opportunity areas” as part of long-term strategy vision to support grown and development across Chicago.

Press release
The following week, the Chicago Public Schools announced that 54 schools would be closed and six schools “turned around” for the 2013-14 school year. This is the most schools closed simultaneously in U.S. history. An estimated 30,000 students will be affected. Most of these schools are low-performing, with primarily low-income and minority student populations (90% African-American). Many have a number of empty seats, due to the closure of high-rise public housing and the dispersal of their residents as well as student enrollment in charter schools.

Parent and teacher groups oppose the closings for several reasons. Teachers and aides at the affected schools face job loss or at best, transfer to a potentially hostile environment. Parents worry about the loss of community, of social services delivered out of school buildings and unavailable elsewhere including childcare for those required to work 30 hours a week to maintain government assistance, the safety of their children who may have to cross gang lines to the new school, and the lack of efforts to accommodate special education classes whose students risk the most damage from disruption caused by the transfer. Chicago Newsroom (21 March 2013). CAN-TV.

CPS claims that the closures are a cost-cutting measure in response to a $1 billion deficit projected for the 2012-2013 school year. The actions will save $560 million over the next decade. As a matter of fact, nearly 140 schools are operating half-empty, wasting resources.

Andrea Zopp, a member of the Chicago Board of Education, acknowledges that most of the closures are on the South and West sides, and largely affect African-American communities. “(B)ut more important, what people should be upset about and what I’m upset about as a Board member is that in these communities, the overwhelming majority of schools right now are under performing… We have to fix that and that’s what this is all about, fixing those under performing schools, and taking those resources and giving these kids a chance to have the schools they deserve.”

At least one expert, however, has called the closures “immoral and unacceptable.” Pauline Lipman, professor of educational policy study at the University of Illinois at Chicago, questions the amount of the deficit, and suggests that CPS could instead use TIF funds as an alternative source of revenue. “These school actions will be devastating –we are talking about students that are living in communities that have already been destabilized by increases in poverty,” she says. “These schools are anchors in their communities, and maybe the only stable factor for a lot of these students; closing these schools will weaken the community as a whole.” Rezin, Ashlee (22 March 2013). Low-Income and homeless students stand to lose the most from CPS school closures. 

The Chicago Teachers Union, which opposes the closures, has held training sessions in civil disobedience for its members in advance of a public protest scheduled for March 27. Additionally, it is urging nonviolent actions at the targeted schools. Leaked CPS memo asks principals to report names of protestors (27 March 2013). 



Proposed Grant Reforms, IL Budget Issues - March 2013
Submitted by:  Krista Ravenscraft

FEDERAL

U.S. OFFICE OF MANAGEMENT AND BUDGET PROPOSES  MAJOR GRANT REFORMS:   Issued in early form back in February 2012, these now specific proposals were released February 1, 2013 for comment by May 2 (OMB docket reference OMB-2013-0001, pp.  7282-7296, through www.regulations.gov) .  For access to the main proposed regulatory text and supporting documents, go to http://www.whitehouse.gov/omb/grants.docs  under “Proposed Policies.”  To obtain hard copies of the documents, contact Victoria Collin at OMB (202-395-7791). 

The sections involved in the reform are II-A (Reforms in Administrative Requirements), II-B (Reforms to Cost Principles), II-C (Reforms to Audit Requirements), and II-D (Additional Suggestions Outside of Grant Reform).   Their consolidation into a single document would locate in one place pre-award requirements, post-award requirements, funding opportunity notice requirements, grant opportunity notice requirements, allowable cost guidance, indirect cost guidance, audit of grants, and twelve Appendices in Sub-Chapter H supporting Sub-Chapters A through G.  

        Once issued, this consolidated document will rescind and supersede the following:

        1.  A-21 Cost Principles for Educational Institutions (2 CFR 220);

        2.  A-87 Cost Principles for State, Local, and Indian Tribe Governments (2 CFR 225);

        3.  A-89 Federal Domestic Assistance Program Information (not codified);

        4.  A-102 Awards and Cooperative Agreements with State and Local Governments (Common Rule codified);

        5.  A-110 Uniform Administrative Requirements for Awards and Other Agreements with Institutions of  Higher Education, Hospitals and Other Nonprofit Organizations (2 CFR 215);

        6.  A-122 Cost Principles for Nonprofit Organizations (2 CFR 230);

        7.  A-133 Audits of States, Local Governments and Nonprofit Organizations, and

        8.  Portions of OMB Circular A-50 Audit Follow-Up relating to Single Audits.

These documents will remain in effect during the comment period.  Following adoption, the consolidated guidance will be implemented gradually over a one-year period.

FEDERAL

The National Council of Nonprofits reports that one of its proposed benefits for nonprofits is that it would explicitly require pass-through entities (typically states and local governments receiving federal funding) to either honor a nonprofit’s negotiated indirect cost rate, negotiate a rate in accordance with federal guidelines, or pay a minimum rate of ten (10) percent  for up to four years while a nonprofit obtains a negotiated rate.    “Nonprofit Advocacy Matters” (11 February 2013).  Retrieved from,http://www.councilofnonprofits.org/37389-111/aol-6/en-us/mail/PrintMessage.aspx

FISCAL CLIFF UPDATE:  Although Congress had agreed to avert the cliff – more specifically, the Sequester, which would have meant automatic budget cuts to defense and domestic budget programs, including social services –until March 1, Rep. Dave Camp (R-MI) called for a hearing on the charitable deduction beginning on the  Day of Love (February 14).  Camp, the Chair of theHouse Waysand Means Committee, stated that he wanted  to hear testimony from representatives of the “charitable community” about how limits on the charitable deduction would impact them.  Nearly one-third of taxpayers who itemize their deductions make a claim for charitable contributions.  In response, Independent Sector urged the White House not to cap the deduction at 28 percent, arguing that the cap would not penalize the taxpayers as much as those who relied on the services those funds supported.

STATE

ILLINOIS BUDGETARY ISSUES THREATEN TO REVERSE PROGRESS MADE IN CHILD WELFARE:   On February 14, Christina LePage, Population Health Manager, DuPage County Health Department, announced the release and findings of the annual “Kids Count” report by Voices for Illinois Children.   While acknowledging great progress in the areas of early childhood education, health care coverage, and child care in Illinois over the past 25  years, she pointed to recent troubling setbacks due to federal and local budget problems.

“We challenge Illinois to do the right thing and the smart thing,” she said, the “right thing” including building on past achievements and tackling current issues facing Illinois children and families in order to prepare for the future.    Areas of progress risk being stalled or undermined if legislators fail to fund children’s services properly because of state budgetary woes. 

Jeanna Capito, Executive Director of Positive Parenting DuPage, said that President Obama’s recent call for preschool for every child in America during his State of the Union address might sway some Illinois legislators in favor of funding.  The report points out that Illinois has been a national leader in expanding access to early learning, doubling participation in state-funded early learning programs between fiscal years 1998 and 2009.  However, deep budget cuts in the last four years have resulted in about 20,000 fewer children attending state-supported preschools.

The Illinois Child Care Assistance Program serves about 170,000 children monthly, allowing low-income families to work with the security that their children are in a safe environment.  But stricter eligibility requirements have led to substantial increases in childcare costs.  For example, for a single-parent family with  two children at 150 percent of poverty level, co-payments have risen from $85 per month to $180 per month from 2011 to 2012. The smart decisions desired of policymakers “will set the course for a prosperous future for all,” said LePage. 


CITY OF CHICAGO
NATIONAL ATTENTION ON CHICAGO MINORITY YOUTH BRINGS LOCAL GOVERNMENT ACTION

As national attention increasingly focused on gun violence among Chicago’s minority youth, the Chicago

Urban League, the Illinois Council for Re-Enrolling Students Who Dropped Out of School and the Alternative Schools Network hosted a panel of aldermen, city commissioners and legislative representatives on January 24 to hear personally from fifteen unemployed Chicago teens. The panelists also received a report commissioned by the Alternative Schools Network which found that 8.7% of Chicago black teens were employed in 2010 and 2011, with the rate for Hispanic teens at 20%.  For low-income households, only 7-10 of every 100 black teens were employed during that period. 

On February 7, 2013, Mayor Rahm Emanuel announced a $4.5 million funding increase for proven programs that would provide 2,000 additional at-risk Chicago Public School students with opportunities for jobs, life-skill training, guidance, and safe alternatives to drugs, gangs, and violence.  These students would join approximately 3,500 students already participating in these programs, together providing opportunities for two-thirds of Chicago’s at-risk youth.   The programs involved are Greencorps Chicago and Becoming A Man (B.A.M.), both run by independent organizations.   

An additional $2 million investment will triple funding for the B.A.M. Sports Edition program, and more than triple the number of participants, from 600 to 2000.  It has been shown to reduce violent crime arrests by over 40%, increase graduation rates by approximately 10%, and reduce failing grades by 37%.  The program addresses the core values of integrity, accountability, self-determination, positive anger expression, visionary goal-setting, and respect for women, as related to personal and academic success.

The $2.5 million investment in Greencorps Chicago will create 600 summer jobs for at-risk students attending 15 CPS high schools.  Students will receive training and employment in urban agriculture and energy efficiency, with many receiving year-round support.

The Chicago Department of Family and Support Services issued an RFP (Request for Proposals) on February 15 for youth service programs by qualified and experienced youth workforce providers on five separate program models.  Organizations could apply for multiple programs as well as single, but each program requires a separate proposal.  The two-part pre-proposal conference was set for February 25, with proposals due by March 11.  Selected groups will be notified by April 12, with contracts to take effect by April 19. 

Links to documents required to be submitted as part of the proposal may be found on the City of Chicago website 



February 2013
Submitted by:  Krista Ravenscraft

FEDERAL


The “Fiscal Cliff:” The American Taxpayer Relief Act of 2012, signed into law January 2, applies in the section relevant to most nonprofits (101c) a federal estate tax of 40 percent to estates in excess of $5 million ( $5,120,000 in 2013, adjusted for inflation) for individuals and in excess of $10 million for couples. Representatives of nonprofit associations had come to Washington to advocate for maintaining estate tax levels as well as charitable deduction allowances.

Congress postponed its decision on other provisions which affect fewer nonprofits, but may potentially have more devastating effects. The most far-reaching, put off until March 1, is known as the “Sequester,”or the “debt ceiling compromise.” Mandated by the Budget Control Act of 2011, it includes a 2% pay cut in physician and other providers’ Medicare payments, and a 7.6-9.6% across-the-board cut in all discretionary spending divided evenly between defense and non-defense programs. It can be averted by repealing that portion of the bill mandating the cuts. Analysts predict a crippling effect on all affected departments. Amount of spending represented: $110 billion.

“Document fix:” Blocked for one year: also appears in Budget Control Act 2011. Passed by every Congress for the past 15 years, but lapsing at the end of 2012, it reverses the temporary cuts that Congress passed and President Clinton signed for deficit reduction in 1997. Known as the “Sustainable Growth Rate,” or SGR, it requires that growth in provider payments would fall by almost 30%, dwarfing physician payment cuts in the debt ceiling compromise. Amount of spending cuts: $14 billion.

Despite nonprofit jitters, there is no cap on the total amount of permitted deductions. There was, however, the reinstatement of the so-called “Pease Amendment,” a Clinton-era provision, although its cumulative effect on charitable giving is expected to be minor, It reduces the value of deductions for wealthy households by 3% of income above a particular threshold, now $300,00 for married taxpayers filing jointly, $150,000 each for married filing separately, and $250,000 for unmarried taxpayers. Their tax rate for deductibility does not change, and the value of deductions cannot exceed 80% of total deductions. Income tax hikes were enacted only for individuals making $400,000 and above annually and for families making $450,000 and above, from 35.0% to 39.6%.

Capital gains tax for individuals with an income tax bracket below 25% remains zero, while that for taxpayers whose income tax rate falls at or above 25%, but below 39.6%, the minimum rate, become 15%. High-income households paying at the 39.6% tax rate now pay 20 percent capital gains and dividend tax rates.

Another positive change for nonprofit fundraising is the reinstatement of the IRA rollover provision for 2013 and retroactively for 2012 if made by January 31, 2013. Donors age 70 ½ and above can once again direct up to $100,000 for their IRAs to a qualified charity without incurring income or estate taxes on the transfer.

Extended for one year: The Low-Income Housing Tax Credit: unemployment benefits for those unemployed for 26 weeks or longer.

Extended for five years: Earned Income Tax Credit; Child Tax Credit: American Opportunity Tax Credit (college tuition).

STATE

New Laws Effective January 1, 2013: This year, 150 different provisions, covering a variety of subject areas, went into effect in Illinois on New Year’s Day. Among those included is the “Skin” tax, an annual surcharge of $3 per person admitted to a “live adult entertainment facility” that serves or permits the consumption of alcohol on its premises, which can be collected from customers on admission. Revenue collected will be used to create grants for sexual assault crisis organizations. “Caylee’s Law: is in response to the death of child Caylee Anthony, whose mother, Casey, waited a month before reporting her daughter’s disappearance. The law makes it a felony for a parent or guardian to fail to report the disappearance or death of a child within 24 hours.

Sections more specifically applicable to nonprofits fall in the area of fundraising. Public Act 097-0920 authorizes the practice of trust decanting, or moving funds from one trust to a second trust. Another trust provision is P.A. 097-0921, which authorizes directed trusts. Directed trusts trifurcate traditional trustee responsibilities among three distinct entities, and have been permitted in other stated for some time. The third section, P.A. 097-1005, makes it easier to process donations form state employees and retirees, by payroll deduction.  

 
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