GrowSmart Maine Testifies in favor of LD 1664, “An Act to Encourage Charitable Contributions to Nonprofits”

Testimony of Nancy Smith, Executive Director of GrowSmart Maine
in favor of LD 1664,
“An Act to Encourage Charitable Contributions to Nonprofits”
January 22, 2014

Senator Haskell, Representative Goode and members of the Joint Standing Committee on Taxation.  My name is Nancy Smith.  I live in Monmouth and I am the Executive Director of GrowSmart Maine, a statewide non-profit organization working at the intersection of Maine’s economy, environment and communities.

I am speaking today in favor of LD1664 because it is vital to Maine’s economy, environment and our communities.  By removing charitable donations from the newly-implemented limit on itemized deductions this bill allows non-profits across the state to continue to do their work.   You will ensure that individual Mainers will continue to recognize these donations when determining taxable income. Quite frankly, I think many Mainers are just now learning that this limit has been put in place.

GrowSmart Maine evaluates legislation from several perspectives as we consider the relevance to our mission.  We have found value in reviewing the benchmarks highlighted in the Measures of Growth in Focus Annual Report, released each year by the Maine Economic Growth Council, under the Maine Development Foundation.  For this specific bill, each of the Measures of Growth is impacted because there are 501 (c)(3) non-profits at work in all these areas.  The impact of non-profits in Maine is far-reaching.

Prosperity:  Maine Development Foundation
Business Innovation:  Maine Technology Institute
Skilled and Educated Workers: Jobs for Maine Graduates
Business Climate: Maine Heritage Policy Center, Maine Farmland Trust
Civic Assets:  Avesta Housing
Disparities: Maine NAACP
Health and Safety:  AARP Maine, Bicycle Coalition of Maine
Stewardship: SWOAM
Development: GrowSmart Maine
Environmental Quality: Maine Audubon, The Nature Conservancy

It is a mistake to limit the charitable deductions Mainers can claim as tax deductions.

–    Individual donations are critical to Maine non-profits.  And it is easier than one might think to reach the $27,500 limit because it includes mortgage interest payments, property taxes and medical expenses.  For many, this cap doesn’t leave much room for charitable giving.

–    This committee knows that tax policy will impact the choices some Mainers must make when deciding in which state to claim residency.  We see it with the estate tax, excise tax and income tax.  This limit could serve as one more financial push for those who split their time between Maine and another state to make that decision to call another state home.  And then we’ll lose so much more than the revenue hoped to be gained with this limit on deductions.

–    Non-profits provide services that would otherwise fall to government.  This includes caring for the homeless, providing education and training, and even for us, assisting communities in planning their futures.  Maine is better and stronger because of its non-profits, which receive core funding from individuals depending on this deduction.  The limited scope of the fiscal note likely will not capture the negative impact of this cap on deductions.

–    Non-profits strengthen Maine’s economy through their work.  They also encourage civic engagement and provide incredible volunteer opportunities, keeping our community members active and involved.

For these reasons, GrowSmart Maine asks you to support LD 1664.