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Making Sense of Federal Budget and Tax Trends: A Macro-Level Look at What NPO’s Need to Know

Making Sense of Federal Budget and Tax Trends: A Macro-Level Look at What NPO’s Need to Know. Prepared by OMB Watch 1742 Connecticut Ave., NW Washington, D.C. 20009 (202) 234-8494 http://www.ombwatch.org. The Budget & Tax Picture Today.

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Making Sense of Federal Budget and Tax Trends: A Macro-Level Look at What NPO’s Need to Know

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  1. Making Sense of Federal Budget and Tax Trends:A Macro-Level Look at What NPO’s Need to Know Prepared by OMB Watch 1742 Connecticut Ave., NW Washington, D.C. 20009 (202) 234-8494 http://www.ombwatch.org

  2. The Budget & Tax Picture Today “We’ve got plenty of money in Washington, D.C., by the way.” President Bush in Louisville, KY February 26, 2004 --------------------------------- “The tension is money. There’s not enough money.” Sen. Ted Stevens (R-AK), Chair Appropriations Committee March 3, 2004

  3. (Deficit excluding Social Security as % of GDP) Surplus Deficit 1983 -6.0% 2004 -5.9%

  4. 2004 15.7% 1950 14.4%

  5. 1.8% of GDP = $207 Billion in 2004

  6. Percent Change 2004-2006 -0.5% 2004-2009 +1.0%

  7. Percent Change 2004-2006 -3.2% 2004-2009 -7.0%

  8. Percent Change 2004-2006 -4.8% 2004-2009 -10.8%

  9. The Longer-Term Budget & Tax Picture “I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.” Grover Norquist, Americans for Tax Reform June 25, 2003

  10. Source: Steuerle, Carasso, Bishop, based on data from Gale, Orszag, and the Tax Policy Center.

  11. Lost Federal Revenue Compared to Philanthropic Giving Assuming charitable giving keeps pace with the growth in the economy, giving in 2009 will be $341.4 billion. Charity would need to increase 142% to replace the lost federal revenue, assuming it continues to fund existing activities. All figures in 2009 Dollars. Philanthropy source: American Association of Fundraising Counsel’s Trust in Philanthropy/Giving USA 2003.

  12. As Baby Boomers Come of Age, the Deficit Explodes Source: Derived from Chart 12-5, OMB, 2005 Budget, Analytical Perspectives, page 194

  13. The Long-Term Problem • It’s a Revenue Problem.The tax cuts since 2001 cause long-term systemic problems. Additionally, there is a need to develop a fairer tax system with more revenue. • Hard Choices Await Us. Even with additional revenue, some hard choices about spending priorities may be necessary. For example, some note that current health care policies are not sustainable over the long-term.

  14. Conservative Perspectives on Taxes are NOT Supported

  15. Conservative Perspectives on Taxes are NOT Supported I don’t like paying taxes because… 75% 69% The govt doesn’t do anything for me Govt spends too much money on welfare and other handouts

  16. What the Public Does Not Mind About Paying Taxes

  17. The Public Supports a Strong Government and the Taxes to Pay for It… But 65% also Agree “I don’t like paying taxes because the government is too wasteful and inefficient.”

  18. “Americans hate taxes, do not trust the government to spend them well and want to keep the money for themselves. To some extent this is natural, to some extent it has been very carefully and intentionally crafted by the right wing groups. That must be countered or change will go no where.”

  19. A Long-Term Proactive Tax and Budget Initiative Prepared by OMB Watch 1742 Connecticut Ave., NW Washington, D.C. 20009 (202) 234-8494 http://www.ombwatch.org

  20. What We Have Donesee www.ombwatch.org/article/articleview/2095/1/2/ • Call to Action paper – in December, 2003 (see www.ombwatch.org/article/articleview/1952/1/18/). • Internet Survey -- completed by over 700 respondents in Jan/Feb, 2004. • Regional Strategy Sessions -- in Columbia, SC; Seattle, WA; Chicago, IL; Philadelphia, PA, and Phoenix, AZ.

  21. What We Plan To Do • National Retreat – Develop specific ideas and next steps on June 13 and 15, 2004. • Online Resource Center – on tax and budget information. • Face on the Numbers -- Online database (www.ombwatch.org/budget/face.html) of stories about unmet needs and how a service or program has made a positive difference.

  22. PART IIInternet Survey Results

  23. Purpose of the Survey • Identify tax and budget activities in which nonprofits are currently actively engaged • Assess the importance of launching a long-term proactive initiative on federal tax and budget issues • Identify the goals and activities that should be undertaken • What are the challenges to success, and what it takes to get groups to participate

  24. About the Internet Survey • Not a Random Sample • Over 700 Respondents with Diversity in Respondent Pool • Respondents From Every State But Nebraska • Survey Conducted Between January 13 – February 4, 2004

  25. Not a Random Sample • Sources of Bias • Technology / Internet access • OMB Watch Network / Email notification • Distributed by CDF, CHN, NCNA, NCRP, United Way, FTFA, OMB Watch, and other state/national groups • Not representative of overall nonprofit population, but may be more representative of progressive groups • Self-Selection • Likely to be more interested in tax and budget work • However, there was significant diversity in the respondent pool

  26. Survey Respondents • 63% of Respondents Were 501(c)(3) Groups; 10% government; 9% foundations; 7% 501(c)(4)s; 9% other • 45% Said Their Primary Activity Was Service Provision • 42% Said Their Primary Activity Was Advocacy Or Public Interest Work • 42% Said Their Primary Mission Was Serving Children, Youth & Families

  27. Survey Respondents: Scope

  28. What Are Groups Doing Now? Over the past year, in what ways has your organization gotten involved in tax and budget issues? Communicated w/ Members or Public to Support or Oppose Tax/Budget Issue 46% Communicated w/ Policy-maker to Support or Oppose State Tax/Budget Issue 44% Communicated w/ Policy-maker to Support or Oppose Federal Tax/Budget Issue 35% 22% Communicated w/ News Media to Support or Oppose State Tax/Budget Issue 18% Released Research Reports/ Analyses on Tax/Budget 15% Communicated w/ News Media to Support or Oppose Federal Tax/Budget Issue

  29. Strong Support for aTax & Budget Campaign 90% of respondents say it is time to launch a longer-term offensive campaign on federal tax and budget issues. Given limited time and resources and the fact that there are many other important issues, do you agree or disagree that it is time to launch a long-term offensive campaign around federal tax and budget issues? 90%

  30. “It is important to identify what we are for, not just against, in a coordinated, long-term approach -- similar to what conservative parties and organizations have done so well. Instead, the non-profit sector is misunderstood by the public, given little to none media attention (other than scandals and disasters), and marginalized as a force in public policy and the public at large.”

  31. Support Strong by All GroupsOrganizational Mission 96% 95% 94% 94% 90%

  32. Support Strong by All GroupsPrimary Organization Activity Those Primary Activities Listed by 20% of More of Respondents 93% 92% 91% 90% 90% 89% 88%

  33. How important are the following goals to a long-term tax and budget campaign? Goals for a Campaign Tax System that Raises Adequate Revenue for Govt Services and Programs 94% Resources & Policies for Economic Growth & Jobs 93% Identify & Elevate Domestic Needs & Priorities 90% Insure Adequate Funding for Unfunded Federal Mandates 90% Cut Regressive Taxes that Hurt Low- & Middle Income 87% Stop Attack on Role of Govt & Demonstrate Value of Strong Federal Govt 75% 70% Raise Additional Revenue to Address Unmet Needs 41% Cut Govt Spending to Reduce Deficit

  34. What Are Some Challenges That Must Be Confronted?

  35. Participation May Be a Challenge 90% of respondents say it is time to launch a campaign BUT 49% say they are unlikely to participate. NEGATIVE POSITIVE

  36. Even Though 49% say They Might Not Participate in a Campaign…61% Say They Will Help Redistribute Information About the Campaign

  37. Other Ways Groups Say They Would Participate

  38. What’s It Take to Get Groups Engaged? Develop Common Messages, Themes & Principles More Info on State/Local Impact HIGH Distribute Current Info on Budget/Tax More Info on Issue Area Impacts Workshops, Training, Meetings LOW Funding Tax/ Budget Work

  39. “It's very difficult to understand how the federal budget and taxes directly impact our local communities -- we need translation and messages to reach us at our own homes and pocketbooks… Currently, it's difficult to directly see the consequences of cutbacks.”

  40. While Only 54% Said Funding of Tax/Budget Work is Important… 66% 62% • Two-thirds of state and local groups considered funding for tax and budget work important in getting them to participate. • 44% of national groups considered funding important. 44%

  41. While Only 54% Said Funding of Tax/Budget Work is Important… 66% 62% • Two-thirds of state and local groups considered funding for tax and budget work important in getting them to participate. • 44% of national groups considered funding important. 44%

  42. Caveat on Funding (Cont.) 69% • Two-thirds of those who might participate consider funding for tax & budget work an important incentive. • One-third of those who are unlikely to participate consider funding important. 35%

  43. Top Challenges to Confront It’s an Organizing Issue 76% 72%

  44. Other Challenges to Confront Relationships between National, State and Local Groups 67% say that national groups do not listen to state and local groups and are out of touch with their concerns “National organizations often fail to form the partnership and show little respect for the amount of work being done on the local level. In addition, national organizations are often very ‘abusive’ partners.”

  45. “I believe there would be a need to decentralize the campaign and have designated organizations to give regional and local leadership to these efforts.”

  46. What Should Be the Objectives of the Campaign?

  47. 9 in 10 Said the Campaign Should Address: 94% 93% 90% 90%

  48. “Redefine the definitions of "tax" as more than some kind of perverse theft of money. Tax must become redefined in a context of community-building, fairness, common ground and even patriotism.”

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