Yesterday, the NC House of Representatives approved a new bill (S.116) that would withdraw North Carolina from the Federal Pandemic Unemployment Compensation (FPUC) program, effective 30 days after the bill is enacted. The FPUC program provides $300 weekly supplemental payments to unemployed workers. The American Rescue Plan Act (ARP) had extended the FPUC program through September 6, 2021. While North Carolina appears to be the first state to consider legislation to withdraw from the FPUC program, governors in 26 other states have announced plans to withdraw from FPUC and other federal unemployment benefit programs. 

Unlike the executive actions in other states, the bill passed by the NC House would not withdraw North Carolina from the other five federal unemployment programs that were extended through September 6 by ARP. These include programs that provide 31-week extensions of state unemployment benefits, unemployment coverage for self-employed workers and employees of small and religious nonprofits, and partial coverage of unemployment expenses for reimbursing nonprofits.

The bill also would make three other significant changes:

It is unclear whether the Senate will take up the bill. Even if the Senate approves the bill, it is likely that Governor Roy Cooper would consider vetoing it.

On Tuesday, the NC Senate approved a bill (H.B. 128) that would provide $1,500 payments to workers on unemployment who find employment within 30 days and $800 payments to workers on unemployment who find employment within 60 days. These proposed bonus payments are intended to respond to concerns about labor shortages by offering incentives for North Carolinians to return to work. This could help some nonprofits that are having difficulty finding workers to fill vacant staff positions. Because the proposal would use federal funds to make bonus payments, the bill would require congressional approval if it also passes the House and is signed into law by Governor Cooper.

Yesterday, the NC House of Representatives approved a bipartisan bill (H.B. 654) that would require state agencies to prioritize nonprofit work centers for the blind and severely disabled in bidding for various state contracts for goods and services. In explaining the bill, legislators described the ways that nonprofits serving people with visual impairments and disabilities have shown the impact of their work by a combination of stories, data, and site visits. While this bill would only benefit a small group of nonprofits, it is a good example of how nonprofits can effectively advocate for policies that strengthen their organizations and help the people they serve.

The Center is advocating for legislators to use some of the state’s ARP funds to create a nonprofit relief fund in the next state COVID-19 response package. Your input is essential in coming up with a plan to provide meaningful relief for nonprofits. Specifically, it would be helpful to know what type of economic hardships your nonprofit has experienced due to COVID-19 so we can advocate for a grant program with appropriate eligibility criteria. Examples of possible criteria could include:

Let us know what type of eligibility criteria for a nonprofit relief fund would make the most sense for your nonprofit and other organizations in your community. Thank you if your nonprofit has already provided input. The Center has included input we have received in the information sheet on the need for a nonprofit recovery fund and the example of the structure of a nonprofit relief fund that we have shared with legislators.

Last Friday, the White House released President Joe Biden’s budget proposals for FY2022, which begins on October 1, 2021. The tax, spending, and policy recommendations in the President’s budget recommendation are not binding on Congress. The documents recommend a federal budget of $6 trillion, including a 16% increase in domestic spending. The proposals include increased investments in a wide variety of federal programs that fund nonprofits and that work collaboratively with community-based organizations. President Biden is calling for tax increases to pay for the increased spending. Specifically, he asks Congress to increase taxes on high-income taxpayers and to raise the corporate tax rate to 28% (up from the current 21% rate, but down from the 35% rate in 2017). Nonprofits that pay tax on unrelated business income are affected by changes in the corporate income tax rate. 

The detailed tax documents that accompany the budget provide more information about plans to make permanent several temporary tax provisions, including the expanded Earned Income Tax Credit, Premium Tax Credit, Child Tax Credit, and Child and Dependent Care Tax Credit. Notably for nonprofits, the proposal would not create new limits on the value of itemized deductions, including charitable contributions. Some nonprofits had expressed concerns that itemized deduction caps in former President Obama’s budget proposals would have reduced charitable giving by high-income taxpayers.

Yesterday, the NC Senate unanimously approved a bill (S.722) that would delay some municipal elections scheduled for this fall until March 2022 to allow time for redistricting. Earlier this year, the U.S. Census Bureau announced that Census data used for redistricting will not be available until September 30, 2021. Overall, 62 municipalities throughout North Carolina are scheduled to have elections this fall. Cities and towns where officials are elected to represent districts will need to redraw those districts before the election. The Senate bill would postpone those elections until next spring and require affected municipalities to review and revise their districts once Census data is available this fall. The House could take up the bill in the coming weeks. 

Once the new dates of municipal elections are finalized, it will be important for nonprofits to provide clear information to their staffs, volunteers, and the people they serve about delayed elections in their communities.