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August 2019 Public Policy Roundup

Publication date: 
Tuesday, August 27, 2019

Executive Summary

August presents multiple opportunities for philanthropy to learn about public policy issues affecting your grantmaking. All foundations can participate in the federal rulemaking process by submitting public comments on proposed rules. A federal department must consider each comment submitted and provide responses as a part of the administrative record. These comments are essential – and lay the groundwork for future action in the courts as necessary (such as our Census win!). Now, more than ever, we need your voice, informed by your mission and grantmaking, to weigh in on critical issues.

The federal government has proposed a new rule that, if enacted, would eliminate food assistance for 230,000 Californians – meaning more Californians will face hunger, turning to food banks and other nonprofit partners. SCG is organizing funders to submit public comment. If you’re interested, let us know. 

This month’s Public Policy Roundup also takes a look at new research regarding California’s poverty and prison populations, economic mobility among the state’s community college students, and child welfare education rights. We also analyze the effects of the recent federal administration’s change to the public charge rule and need your input on proposed changes to the private foundation excise tax.

  • Additional topics in this month’s Roundup include:
  • Tools for Action on the federal Opportunity Zone community investment program
  • New Los Angeles County Sustainability Plan
  • Survey Results on Statewide Climate Change Survey


Philanthropy in Action 

Philanthropy California Statement: Uniting for Healthcare Rights 

Philanthropy California, an alliance of Southern California Grantmakers, San Diego Grantmakers and Northern California Grantmakers, united with Funders for LGBTQ Issues and Grantmakers Concerned with Immigrants and Refugees (GCIR), to oppose the proposed changes to the Patient Protection and Affordable Care Act. As philanthropic serving organizations dedicated to the health and wellbeing of our communities, we oppose the proposed changes that will affect access to care for our most vulnerable communities. As a part of the federal rulemaking process, Philanthropy California submitted our public comment for consideration by the Department of Health and Human Services. 



Take Action: Submit Public Comment on Changes to the Nation's Anti-Hunger Program

Philanthropy has an opportunity to submit public comment to defeat or slow efforts on a proposed federal rule to remove nearly 250,000 Californians from eligibility to receive critical food assistance. If you need technical assistance, please contact SCG’s public policy team.

According to California Food Policy Advocates, nearly 6.7 million Californians are living in low-income households and are affected by food insecurity, including nearly 2 million people in Los Angeles County alone. As the state with one of the highest poverty rates in the nation, Californians are predicted to bear the brunt of the United States Department of Agriculture’s (USDA) newly proposed rule to withhold food assistance eligibility from millions of Americans.

CalFresh, California’s implementation of the federal Supplemental Nutrition Assistance Program (SNAP), currently assists one in every 11 Californians fighting food insecurity by supplementing their household incomes. Under the new rules, the state can no longer provide CalFresh benefits to low-income families that earn more than 130 percent of the federal poverty line. Therefore, a family of four earning more than $33,475, or a lower-income household that has over $2,250 in savings will not be able to receive this income supplement.

California already faces difficulty in enrolling eligible families in the CalFresh program and currently ranks as the fifth-lowest enrolling state for SNAP benefits. According to CalMatters, California only enrolled 72 percent of eligible households in CalFresh in 2016, leaving nearly 1.8 billion dollars in available federal funds on the table.



Share Your Thoughts: Private Foundation Excise Tax 

Each year, private foundations are required to pay an annual excise tax equal to 2 percent of their net investment income. If a foundation’s distributions (measured as a percentage of assets) in a given year exceed the average payout rate of the foundation over the preceding five years—by an amount at least as much as the 1 percent tax savings the foundation will enjoy—then this tax is reduced to 1 percent.

Proponents of a flat excise tax for private foundations note that under the current two-tiered structure, a foundation is penalized for making a substantial increase in its charitable spending. A uniform excise tax rate would increase funds available for local communities by freeing private foundations from the administrative task of calculating the amount of additional eligible expenditure needed to qualify for the lower 1 percent rate.
In June, the House Ways and Means Committee included a provision in a disaster tax bill that would reduce the private foundation excise tax to a flat 1.39 percent. At 1.39 percent, Congress estimates that the change would be revenue-neutral, meaning that Treasury would still collect the same amount of money with the flat 1.39 percent tax that it currently takes in with the two-tiered system.

Since June, some policy organizations have advocated for this provision to be removed from the bill and replaced with a flat 1 percent private foundation excise tax. The Alliance for Charitable Reform has shared the following reasons why they are pushing for a 1 percent rate instead of the proposed 1.39 percent rate:

  • Simplifying the current two-tiered system to a flat one percent is the only way to guarantee no charitable organizations see a tax increase as a result of the change.
  • If the tax were set at 1.39 percent, many foundations would see a 39 percent tax increase, driving money out of those organizations and into federal coffers.
  • Some of the largest foundations currently pay 1 percent and have the most money being granted out, so the 39 percent tax increase would hit them hard.
  • The charitable sector took a tax hit in tax reform, including the UBIT on parking/transportation benefits and the reduction in itemizers and therefore taxpayers who have access to the charitable deduction. Setting the rate at 1.39 percent would be yet another tax increase on a chunk of the sector.

What are your thoughts? Would you prefer a simplification of the excise tax? At 1 percent? At 1.39 percent? Southern California Grantmakers will continue to work closely with our national partners on this issue and track any 



Focus on Immigration

Philanthropy CA Opposes Proposed Changes to Public Charge, Stands With With Immigrant Families 

Earlier this month, the Administration finalized the public charge rule, expanding the government's ability to deny immigrants permanent residency or visas if a person benefits from aid programs such as the Supplemental Nutrition Assistance Program (SNAP), Medicaid, and housing assistance programs. The finalized changes inflict significant harms on children and families, depart from longstanding immigration practice related to public charge, and place a new, extraordinary burden on the charitable sector. Southern California Grantmakers, working under the auspices of Philanthropy California, worked with our partners to organize submissions to oppose the rule when proposed in 2018 as a part of the federal rulemaking process. Submitting public comments into the official record is an activity that all foundations, including private foundations, can do without affect to IRS status. You can read our original letter to the Department of Homeland Security her. 

The rule is set to take effect on October 15, 2019, but litigation efforts are already in motion to prevent the rule from being enacted. San Francisco and Santa Clara counties have already filed suit and the National Immigration Law Center (NILC) has announced its intent to file legal challenges as well. Southern California Grantmakers will continue to work closely with our local, state and national partners on this issue and provide updates, including exploring if and when submission of an amicus brief is appropriate – which foundations can be involved.



New Federal Rules Speed Up Deportation 

On July 23, the Administration enacted a new designation to the Department of Homeland Security’s expedited removal process. The new designation came just over a week after the Administration announced a change to asylum rules preventing migrants from claiming asylum in the U.S. unless they’ve first done so in another country en route to the U.S.

“Expedited removal” was a process created in 1996 that refers to the legal authority given to even low-level immigration officers to order the deportation of certain non-U.S. citizens without any of the due-process protections granted to most other people—such as the right to an attorney and to a hearing before a judge. Furthermore, under the expedited removal rule, there is no right to appeal an immigration officer’s decision to deport someone via expedited removal.  Prior to the new designation, the rapid removal process stated that undocumented immigrants who crossed into the U.S. by land could be deported without an immigration hearing if they were arrested within 100 miles of the U.S. border and had been in the U.S. for less than two weeks. Those who arrived by sea could be deported without legal proceedings if they were unable to prove they had been living in the U.S. for two or more years.

Under the new designation, all geographical limitations are lifted, expanding the rule to cover the entire United States, and has the ability to impact all undocumented immigrants who have been in the country for less than two years. The American Immigration Council estimated that the new change could result in thousands of additional deportations without due process.

The Department of Homeland Security is requesting public comments on the change, however since the new designations do not fall under the Administrative Procedure Act’s notice-and-comment requirement, the changes were effective immediately upon publication on Tuesday July 23, 2019.




Los Angeles County's Sustainability Plan: A Commitment to Future Generations

Earlier this month, the Los Angeles County Board of Supervisors formally adopted the OurCounty Sustainability Plan, the region’s first-ever strategic vision to address existing and future sustainability issues. OurCounty not only incorporates strategies to solve environmental issues, but also focuses on intersectional issues involving workforce and economic development, housing, displacement and gentrification, as well as environmental justice for systematically and historically impacted communities. This plan lays out 12 overarching goals and 160 strategies and action items to lead County departments and its 88 cities towards creating a sustainable, healthy, and equity-centered communities. Priorities include:

  • Eliminating single-use plastic by 2025 and diverting over 95 percent of waste from landfills;
  • Closing in on a fossil-fuel free LA County by pushing for 80 percent of all new light-duty private vehicles are zero emissions by 2035; and
  • Increasing affordable housing of more than 500,000 units by 2045 while protecting against displacement and urban sprawl. 

This two-year process was developed, revised, and finalized by the County’s Chief Sustainability Office (CSO) with heavy input from community-based organizations, philanthropic partners, environmental experts and the public at-large. The CSO has been commissioned by the board to continue working with community stakeholders to develop near-term



Californians Note Record-High Concern for Climate Change

Last month, the Public Policy Institute of California (PPIC) published the results from their survey which showed that a large portion of Californians are deeply concerned about the effects of climate change on the future of the state’s economy and their quality of life. The statewide survey stressed that nearly 60 percent of adults believe the implications of climate change have already begun, increasing their concerns about rising sea levels, extreme heat-waves, and severe wildfires. Additional key highlights of this survey include:

  • About four in ten likely voters stated that a presidential candidate’s position on the environment will be an important factor driving their political behavior;
  • Approximately half of the respondents said that air pollution is more prevalent and detrimental in lower-income communities; and
  • 74 percent of adults believe local governments should adopt policies related to climate change intervention



Focus on Education

The Educational Rights of California's Foster Youth

Grantmakers interested in child welfare and education, may be interested in the updated factsheets on education rights of foster youth released by the California Foster Youth Education Task Force. The factsheets cover a range of seven topic areas including educational rights and school stability, educational decision-making, early care and education, special education, school discipline, graduation exemption requirements and transition services to college and career readiness.
Highlights of the factsheets include:

  • Youth are entitled to special education services under California law until age 22;
  • Students in foster care may be exempt, under certain conditions, from local graduation requirements;
  • Universities with student housing are required to allow foster youth to remain in housing that is available during academic breaks at no extra charge.



Economic Mobility and Career Pathways for California's Community College Students

A third of California’s labor market is comprised of middle-skill jobs, those that require more than a high school diploma but less than a four-year degree. Career technical education and vocational programs offered through California’s community college system, play a critical role in training students to meet the state’s current and future demand of middle-skill jobs. In a recent report by the Public Policy Institute of California (PPIC), occupational earnings are compared to regional poverty thresholds to determine how the state’s future workforce needs connect to current middle-skill job levels. The report details that although there has been a consistent increase in career education credentials awarded by California community colleges over the past 20 years, the increase is skewed by industry, and not all career education programs provide significant subsequent economic gains for students.
Key findings of the report include:

  • Health-related certificates are completed at a higher rate than any other program and offer a substantial increase in students’ subsequent earnings, however career education programs in business, the second-highest program credential earned in the state, does not provide much of a wage boost.
  • Earning and program trajectories vary significantly across racial and ethnic groups with Latino and African American students more likely to earn credentials in industries that yield lower economic returns.
  • Central Valley and the Inland Empire will attribute a least a third of their future jobs to middle-skill occupations, while in the Bay Area and San Jose regions, no more than a quarter of future jobs will require middle-skill workers.



Resources & Reports

Opportunity Zones Playbook: Tools for Action 

Opportunity Zones (OZs) promise to ring in billions of dollars of investments into historically low-income and impoverished urban and rural designated census tracts around the country over the next several years. However, stimulating inclusive economies in communities that benefit the people who live and work there, while providing a solid return to investors, will be a challenging and complex undertaking. In an effort to demystify and streamline the planning process, Local Initiatives Support Corporation (LISC)has published its Community Partners Playbook, the first of a series that aims to lay out possible trajectories and best practices for a range of OZ stakeholders. The playbook is addressed to interested local community partners and provides a step-by-step guide on how to organize, plan, and assess OZ projects in a transparent manner that ensures local communities, as well as investors, secure the benefits.

Key steps outlined in the Playbook where Philanthropy can get involved include:

  • Attend stakeholder meetings to identify potential partners as well as local organizations and leaders that can represent the community. Remain engaged with the community and encourage their participation in the planning process.
  • Examine current neighborhood assets and identify gaps needed to be filled through additional investment. This may include additional housing, schools, commercial/retail facilities, employment, parks, health clinics, day care, public transportation, or neighborhood safety, etc.
  • Identify, incentivize and partner with impact investors. There is a growing trend for foundations to make impact investments in communities that, unlike a grant, create a financial return, but more importantly focus on creating a sustainable source of capital with the mission of developing social improvements.
  • Incentivize local and state policymakers to allow for additional taxing strategies to increase attractiveness of OZs to investors.
  • Provide a platform to market OZs to investors and educate stakeholders on the federal incentive.
  • Hold participating parties accountable by encouraging transparency and the development of reasonable impact reporting metrics on proposed projects.



California's Prison Population is Aging 

The Public Policy Institute of California (PPIC) released their newest update on the prison populations in California. The data shows that although California’s prison population has stabilized over the past couple years, many prisoners still live in overcrowded prisons, despite a Supreme Court mandate.

Their findings demonstrate that 81.4 percent of inmates in California were born in the U.S, while only 13.5 percent were born in another country, indicating foreign-born Californians are less likely to be imprisoned. The data also demonstrates that African-Americans remain overrepresented in California prisons with 28.5 percent of the state’s male prisoners being African American, while they account for only 5.6 percent of the state’s adult male residents.

The data also illustrates that prison populations are aging and health care costs are rising as a result. Between 2000 and 2017, the percentage of prisoners aged 50 or older rose from 4 percent to 23 percent. The average male prisoner is now almost 40 years old and the average female prisoner being slightly younger, at 38. Between 2010 and 2015, health care costs rose 25 percent in California prisons, with the state spending $19,796 per inmate on healthcare in fiscal year 2015. 



Poverty in California 

Funders involved in addressing poverty issues in California may be interested in the various poverty factsheets and interactive maps the Public Policy Institute of California (PPIC) recently released. The factsheets provide a breakdown on overall poverty in California, child poverty, and poverty among the working class. One of the interactive maps visually breaks down poverty rates by counties, U.S. Congressional Districts, State Senate Districts, State Assembly Districts and local areas, while the second shows poverty rates across demographic groups, age, levels of educational attainment and employment.

Highlights of the publications include:

  • Close to half (43 percent) of California’s children live in or near poverty
  • Latinos continue to have dramatically higher poverty rates compared to other racial groups
  • Public safety net programs, such as CalFresh , Earned Income Tax Credits and CalWorks, helped lift an estimated 7.1 percent of Californians out of poverty in 2017
  • Poverty rates among working adults are highest in southern, coastal California including the Los Angeles, Orange and San Diego counties


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