September 2012
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Legislative Update
Legislative Outlook for the Arts
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Legislative Update
Legislative Outlook for the Arts
Isaac Brown

With Congress adjourned for the summer and not set to return until September 9, this is an excellent time to give you an update on several legislative policy issues impacting the arts.

Fiscal Year 2013 Appropriations

As we approach the end of the fiscal year on September 30, Congress has been unable to advance legislation funding government operations in FY2013. In an effort to avoid a government shutdown right before the election, Senate Majority Leader Harry Reid (D-NV) and House Speaker John Boehner (R-OH) announced in July that they had reached an agreement to pass legislation funding the government at current levels until March 2013. The measure will be voted on in September after Congress returns to work, and is expected to pass overwhelmingly in both chambers.

What this development means for the arts is unclear. Once the six-month funding bill passes, Congress will not even begin to consider new funding for the National Endowment for the Arts (NEA) until next year, when the composition of Congress—as well as the occupant of the White House—could be completely different. Since Congress was divided in 2010, with the Republicans assuming control of the House and the Democrats maintaining power in the Senate, each chamber has worked to counterbalance the other with regard to funding for the arts. House Republicans, who were elected on a platform of reducing domestic spending, have cut funding for the arts and most other discretionary domestic accounts, while the Senate has slightly increased funding, allowing for the final result to be a compromise—maintaining the status quo. Changing the balance of power in either direction could significantly change the outlook for the NEA and the arts.

Charitable Deduction

While most legislative work in Washington has ground to a halt as members of Congress await the results of this November's election, one issue remains at the forefront: tax reform. While it appears likely that Congress will wait until 2013 to tackle some of the more complicated and controversial provisions, such as tax rates, it must decide by year's end whether to extend more than 50 different tax cuts and credits in the Internal Revenue Service code. Among the provisions up for debate is the charitable deduction for contributions to 501(c)(3) organizations. As members of Congress explore ways to reduce the national debt, discussions have focused on possible changes to incentives for charitable giving.

One suggestion that has been strongly supported by members of both parties was put forward by the president's National Commission on Fiscal Responsibility and Reform. In its proposal to Congress, Commission heads Senator Alan Simpson (R-WY) and Erskine Bowles recommended limiting the charitable deduction to 2% of a taxpayer's adjusted gross income. While the overall plan was not supported by the Commission, its charitable donation deduction remains a viable option in the eyes of many members of Congress.

Next Steps

The next few months are an exciting yet unsettling time for the arts community. As the election nears, the only thing we can be certain of is that come November 7, we finally will have a bit more certainty about what the policy landscape will look like. We at NASAA will continue to monitor closely these and other issues of importance to our members, and will keep you aware of any developments.

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