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The Season of Political Insanity is Upon Us…

Congress and most state legislatures will be back in session this month and hundreds of bills will be introduced that will impact just about every individual and business in the United States.  Yes, it’s the start of the political insanity season when lawmakers toss everything against the wall and see what sticks.  The vast majority of these bills will die because a) they were introduced by a legislator whose party was not in power or who doesn’t have the political juice to get the measure heard by a committee; b) the provisions of the bill were so off-the-wall that the sponsor’s colleagues wouldn’t touch it with a ten-foot pole; or c) time simply ran out.

The bills that emerge from the tumultuous first few weeks of debate are those that will merit serious consideration by lawmakers later in the year.  It’s during this time that your investment in the American Fraternal Alliance can really pay dividends for your society.  Because what doesn’t make it through the legislative sieve is just as important as what does.  Because we are expecting a number of bills to be introduced that will dramatically impact the tax-exempt status of fraternals and other not-for-profit organizations, it has become increasingly important for the Alliance and its members to let state and federal legislators know who we are and what we do before we get listed on the political menu.  Equally important, we need to have a “rapid response” mechanism in place – especially at the state level – to ensure that lawmakers receive our message loud and clear before any vote on a measure to repeal the fraternal tax exemption is taken.

Hawaii kicks off the parade

For the third consecutive year, bills that would subject fraternals to both the state premium tax and the general excise tax have been introduced in Hawaii.  Similar measures were introduced and – thanks in large part to our advocacy efforts – defeated in 2009 and 2010.  But Hawaii’s budget deficit continues to grow and efforts to generate new sources of tax revenue remain a high priority for state lawmakers.  Tax-exempt organizations are a prime target for these so-called “reforms,” not only in Hawaii, but in states across the country.

Why is Hawaii so important when only four societies have a presence in the state?  All it takes is one state to change the rules regarding taxation of non-profit groups and other states are likely to follow suit – just like dominoes.  The Alliance is actively engaged in the Hawaii debate.  We’ve notified our member societies with lodges and members there and are working hard to establish grassroots contacts between local societies and state lawmakers.  In 2009 and 2010, the Alliance retained a local lobbyist to represent our interest in Hawaii and we’re prepared to do that again.  However, this year we are exploring the possibility of working with a broad coalition of tax-exempt organizations – since all of them are affected by these bills – in an effort to communicate with a more powerful voice.  We’ll keep you posted on the developments.

The Alliance is keeping a close eye on activities in several states that have made tax reform a priority.  In almost every case, “reform” means taking a hard look at the validity of tax-exemptions.  That means that every group – from churches to charities – is going to have to justify the value of its tax-exempt status to state lawmakers.  Those that don’t – or can’t – will likely lose their exemption.  The Alliance’s primary mission is to make sure that doesn’t happen to fraternals.

Lobbying is only a small piece of the pie

The Alliance’s professional advocacy efforts, carried out by staff and retained lobbyists at the federal and state level, plays an important but relatively small role in this effort.  Our greatest political weapons are 1) our ability to collect real data on the impact that our financial contributions, volunteer activities, and member benefits have on communities; and 2) the willingness of fraternalists – from CEOs to local lodge representatives to individual members – to stand up and be counted.  That means the Alliance’s political clout is limited only by its member societies’ desire to become involved in the process.  We’ve got a great story to tell, but unless we can communicate it effectively we could find our exempt status threatened – and our ability to carry out our unique mission undermined.

Rumbles from Washington

While the tax debate is more acute at the state level, Congress is gearing up for an extensive tax reform debate in the coming months.  The nation’s debt and deficit – and the looming battle for control of the Congress and the White House in 2012 – virtually ensure that the discussion will be heated.  Nothing significant may actually get enacted in the next two years, but the stakes – and stakeholders – will be more clearly defined for the post-presidential election battle.

Never has it been more important for fraternal leaders to let members of Congress know who we are and what we do.  We need to engage them on Capitol Hill (and attending the 2011 Presidents Section Mid-Year Meeting in Washington, D.C., this May is a great way to participate in this project) and in the districts.  If you’ve got a meaningful fraternal activity planned for the coming months – and by meaningful, I mean one where members are filling gaps in government programs by feeding the hungry, helping military families or veterans, or providing important social services to local communities – let us know and we’ll work with you to invite a member of Congress and his or her district staff person to participate.  There is not time to waste.  Everything is on the table – including your society’s future.

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