The Year Ahead and the President's New Budget Proposal - (February 14, 2012)
Washington, D.C. -Yesterday the President announced his newest budget plan, which seeks to meet the mandate of deficit reduction through a combination of strategic revenue measures and funding allocations. Below are the highlights of the tax and spending policies that impact orchestras and the broader arts and nonprofit communities. While the many distractions of the election cycle will slow - if not altogether thwart – progress on major budget decisions and tax reform, the President’s budget request sets the tone for the Congressional action to come.
- Nonprofit Tax Policy: The President’s budget plan once again proposes decoupling the value of tax deductions from income tax rates, capping deductions – including the charitable deduction – at 28% for individual taxpayers earning more than $200,000 and couples earning more than $250,000. Congress has previously rejected identical proposals from the Administration in the past few years, and key tax policymakers have objected to the negative impact the proposal would have on charitable contributions. The President also proposes to enact what is known as the “Buffett Rule,” which would apply a minimum 30% tax rate for those with adjusted gross incomes above $1 million, while protecting charitable giving. Related “Buffet Rule” bills have already been introduced in the House and Senate and would maintain charitable giving incentives by providing a credit equal to the value of a tax deduction. While the protections for charitable giving incentives are an important recognition of the unique value of charitable deductions, the President’s proposal to cap deductibility at 28% has met strong opposition in the nonprofit community.The President's proposal also supports reinstatement of the IRA Charitable Rollover provision. Orchestras are asking Congress to preserve charitable giving incentives.
- NEA Funding: After a tumultuous funding cycle last year, Congress ultimately agreed to cut NEA funding to the same amount requested by the President in his FY12 budget – resulting in an $8.8 million decrease for the NEA to its present level of $146 million. The President's FY13 budget, however, would partially restore the decrease he recommended last year, providing for an FY13 funding level of $154.255 million. Orchestras are asking Congress to provide $155 million in NEA funding in FY13.
- Arts in Education Funding : The President’s budget again proposes consolidating the Arts in Education program into a new, broader funding pool entitled “Effective Teaching and Learning for a Well-Rounded Education.” Communities representing a wide array of subjects of learning that would be consolidated are in opposition to the proposal, as it would diminish direct competition and federal leadership for each of these essential subjects of learning. Congress has protected Arts in Education funding, despite eliminating many other programs over the past two years. Orchestras are asking Congress to provide $30 million to support the Arts in Education program at the U.S. Department of Education.
Your Advocacy is Essential
As the coming months unfold, Congress will take action on numerous policies impacting orchestras – your advocacy will be essential! Whether it’s wireless microphone policies, artist visa issues, or major tax and spending decisions, the League has prepared advocacy materials to make it easy for you to make your voice heard, in partnership with the extended arts and nonprofit communities. Please visit our advocacy center and weigh in on the full range of policy issues that impact your orchestra. Now is the time to develop a dialogue with your members of Congress. As always, we will keep you posted about key policy developments.
The League is a member of the Performing Arts Alliance, a coalition of national performing arts service organizations dedicated to advocating for national policies that recognize, enhance, and foster the contributions the performing arts make to America