Update on Legislation Affecting Nonprofit Arts Organizations

March 2, 2001

State Arts Appropriation

The good news is that Gov. Ventura recommended stable funding for the arts, and that a hearing on the arts appropriation in Sen. Cohen’s Senate committee on Feb. 7 went very well. The bad news is that our chairman in the House, Rep. Krinkie, has recommended cutting the arts by 42%. At a hearing in Rep. Krinkie’s committee this week, constituents of committee members and others gave strong testimony in support of the arts appropriation. However, to date the bill still contains a cut. We continue to work with friends on the committee in the hopes we can change the situation. Here’s how you can help:

These legislators are members of the House and Senate committees that will decide the arts appropriation. If you live in the district of one of these legislators, please write or call them as soon as possible. Tell them: “Please support arts funding!” (If you have friends who live in these districts, please forward this alert to them.)

House of Representatives:
Rep. Bruce Anderson, District 19B: Elk River, Buffalo, Dennison, Dayton, Albertville
Contact: 411 State Office Building, St. Paul, 55155

Rep. Rob Eastlund, District 18A:
Isanti County, Lewis Lake, Brunswick, Grasston, West Rock, Day, Dalbo, Elm Park, Stanchfield, Pine Brook, Cambridge, West Point, Spencer Brook, Oxlip, Bradford, Crown, Isanti, Bodum, Blomford, Weber, Stacy
Contact: 449 State Office Building, St. Paul, 55155

Rep. Mike Jaros, District 7B: Duluth
Contact: 291 State Office Building, St. Paul, 55155

Rep. Harry Mares, District 55A: White Bear Lake
Contact: 401 State Office Building, St. Paul, 55155

Rep. Tony Kielkucki, District 20B: Lester Prairie, South Haven, West Albion, Highland, Cokato, Smith Lake, Wa-verly, Norwood/Young America, Oster, Winsted, Watertown, Sherman, Silver Lake, Plato, Hamburg
Contact: 367 State Office Building, St. Paul, 55155

Senate:
Rep. David Kleis, District 16: St. Cloud, Sauk Rapids
Contact: 143 State Office Building, St. Paul, 55155

Rep. Sam Solon, District 7: Duluth
Contact: 303 Capitol Building, St. Paul, 55155

Rep. David Knutson, District 36: Burnsville, Apple Valley
Contact: 133 State Office Building, St. Paul, 55155

Tax Proposals

The bill introduced by the Governor to re-arrange the tax structure would have a variety of negative effects on non-profits. The two pieces we object most strongly to are:

Allowing local governments to impose a new property tax on non-profits called a “fee in lieu of property tax.” If a non-profit owns a building, they’d suddenly be forced to pay a huge property tax bill.
Expanding the sales tax to include ticket sales by non-profits.
Ticket sales by non-profits have long been tax exempt. The proposal would require non-profits to start collecting, tracking, reporting and submitting sales taxes. Non-profits will either have to take resources from their programs or raise more money to pay these taxes. Do you think contributors want non-profits to funnel donations to new taxes? Or do they want non-profits to use donations to serve the public? There is a reason that “tax exempt” organizations are tax exempt. Taxing non-profits is un-Minnesotan!

Go to http://www.mtn.org/mca/alertpgs/111000.html for more details on these and other proposals and opposition arguments.

Minnesota Nonprofit Development Fund

SF 816 (Higgens, Cohen, Knutson, Dave Johnson, Solon). This bill would provide grants to nonprofit organizations for, among other things, board training, strategic planning, technology upgrades, organizational development, and legal compliance review. No hearings are scheduled to date. The House bill will be introduced by Rep. Gunther.

Minnesota Charitable Giving Relief Act Increase

HF 15 (Pawlenty, Abrams, Daggett, McElroy, Kielkucki, Abeler, Erickson, Wilkin, Dorman, Rifnberg, Milbert) SF 149 (Rest, Hottinger, Belanger, Higgens, Day). Currently, those who don’t itemize on their tax forms are allowed to deduct 50% of charitable contributions over $500. This bill would increase the deduction to 100% of charitable contributions over $500. No hearings are scheduled yet, but we expect movement on this bill because of its influential authors. Stay tuned.