Proposed Cuts Would Undermine Nonprofit Sector’s Work

The status of the state budget in Michigan has been a hot issue over the last few weeks, as legislators work to create a balanced budget. While we know that some cuts are inevitable and that shared sacrifice is important, the proposed budget cuts to the Michigan Community Service Commission (MCSC) and the total elimination of charitable tax credits will have a negative impact on the nonprofit sector as a whole.

If funding for the Michigan Community Service Commission is zeroed out, as the Senate Appropriations Subcommittee for the Department of Human Services proposed, Michigan risks losing $13.3 million in federal funds that are leveraged by MCSC. The elimination of MCSC’s budget, a total of $675,000 per fiscal year, is not worth losing those federal funds – the math simply does not make sense. MCSC brings money into Michigan while providing important services for the community, like placing more than 1,200 AmeriCorps members who work tirelessly to strengthen Michigan communities.

The governor’s proposed budget also includes another big hit to nonprofits: the elimination of charitable tax credits. This proposed tax plan, which includes this budget cut, just passed the House by a slim margin and will move to the Senate for a vote. The state’s potentially small gain in revenue (less than $50 million/year) will be dwarfed by the negative impact of denying nonprofits of the leverage they need to multiply and diversify their donations through individual giving tax credits. Without providing encouragement for donations, Michigan’s nonprofit sector will see less charitable giving, further straining their efforts to assist and develop Michigan communities.

With these devastating proposals looming, organizations and individuals throughout the state need to tell their legislators they oppose these budget changes that will negatively affect the nonprofit community. Decreasing nonprofits’ capacity to serve communities is not the answer to the budget problems in our state.

Michigan Nonprofit Association is spearheading the effort to get organizations and individuals to sign-on to two separate letters – one opposing the elimination of charitable tax credits and the other to oppose the elimination of funding for MCSC. You can view both letters, and sign on to them, by visiting http://www.mnaonline.org/proposedbudgetcuts.aspx.

Undermining the nonprofit sector is not a successful strategy for the state’s budget. We encourage you to sign-on the letters to tell our lawmakers to oppose the elimination of charitable tax credits and the zeroing out of MCSC funding!

Submitted by Katie VanderVeen, Public Policy Fellow for Michigan Nonprofit Association.

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