On May 19, the House of Representatives gave final approval to its version of the state budget (H.B. 1030) for FY 2016-17. Overall, the House budget, which passed with a 103-12 vote, would maintain or increase most state funding for nonprofits. Some highlights for nonprofits include:
- Providing direct appropriations for food banks, guardianship, and blindness prevention nonprofits rather than requiring them to participate in a competitive grants program. This could reduce red tape for these nonprofits. Several other nonprofits would still need to apply for state funding through a cumbersome competitive grants program.
- Increasing funding for child care subsidy rates and NC Pre-K.
- Removing an increase in matching fund requirements for early childhood nonprofits receiving state funding.
- Establishing an evidence-based pilot program to improve seniors’ access to federal food assistance programs. The N.C. Department of Health and Human Services (DHHS) can partner with a nonprofit to carry out this program.
- Discontinuing the Community-Focused Eliminating Health Disparities Initiative grants program and transferring these funds to new evidence-based diabetes prevention program. Any nonprofits receiving grants through this program would need to apply through the new program to continue to receive their state funds after September 30, 2016.
- Developing a new training program for DHHS contract specialists. Potentially, this could help provide DHHS staff with the tools to more effectively manage grants and contracts with nonprofits that provide public services.
- Creating new one-time grants funding for several nonprofits working in schools.
- Converting recurring funding for Teach for America and Communities in Schools to one-time funding.
- Allowing nonprofits to apply for a third year of grant funding from the After School Quality Improvement Competitive Grant program.
- Adding $500,000 in additional one-time funding for grassroots arts grants.
- Providing additional one-time funding for the Tobacco Trust Fund ($1 million), Agricultural Development and Farmland Prevention Trust Fund ($1 million), and Clean Water Management Trust Fund ($5 million).
- Converting the grassroots science grants program from two-year to three-year grants.
- Adding more than $45,000 in new grant funding for domestic violence centers.
- Converting one-time funding for the N.C. Symphony to recurring funding.
- Increasing the standard deduction on state income taxes by $500 per year over the next four years. The Senate Finance Committee approved a separate bill (S.818) on Wednesday that would increase the standard deduction by $1,000 in 2016 and another $2,000 in 2017. While this tax change wouldn’t directly affect nonprofits, it is unclear how the Senate would pay for its faster reduction of the standard deduction.
The Senate will next propose its version of the state budget.
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