An Added Layer of Bureaucracy

As nonprofit providers of human services work to do more with less after years of state cutbacks, lawmakers are planning to give them one more thing to do.

A provision included in the state fiscal code bill will require nonprofit providers to report how much executives are paid and how much is spent on association dues, lobbying expenses and other administrative costs. It will impact nonprofits that provide child welfare, mental health, intellectual disability, and drug and alcohol services.

Providers say the change would add an unnecessary layer of bureaucracy at a time when many are stretched too thin because of state cuts. They also note this information is already available to the Department of Public Welfare in federal 990 returns and provider audits.

Another question is why lawmakers feel the need to monitor the financial decisions of nonprofit providers of human services while many other organizations and businesses are not held accountable for the tax benefits they receive.

As we found in a report this week, scholarship organizations that benefit from donations largely subsidized by taxpayers through the Educational Improvement Tax Credit (EITC) are subject to very little public accountability. A 2005 state law actually prevents the state from collecting anything but minimum information on EITC scholarships and does not require scholarship organizations to provide expenditure or outcomes data.

What's good for the geese isn't always good for the gander, I suppose.


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