With Congress planning major reviews of the nonprofit sector and the federal tax system, and with several key college perks potentially at risk, higher education associations aren't taking any chances. They're bringing in hired guns to supplement their lobbying.
Officials at the National Association of College and University Business Officers and the American Council on Education sent a joint e-mail Tuesday to leaders of 50 national college associations unveiling a "tax advocacy effort" aimed at promoting some tax provisions that could help colleges and stopping numerous others that could hurt institutions and students.
The e-mail message also said that the two associations had hired PricewaterhouseCoopers to help with the effort. "In addition to providing political insight and guidance on moving legislative proposals, PWC will enhance our ability to provide timely information to you, the stakeholders, as well as background information and talking points on specific tax issues," it said.
The tax situation for colleges and other nonprofits is unsettled. The Senate Finance Committee is conducting a widespread assessment of charities and charitable giving, examining issues such as how much information they disclose, and their tax treatment. President Bush has promised a push for wholesale tax reform in his second term, and in a very tight fiscal climate, Congress is on the lookout for ways to raise revenue as it begins its work on the federal budget for 2006.
All of those efforts pose potential threats to colleges, and higher education groups want to be prepared, said Matthew W. Hamill, senior vice president at NACUBO. "Our intention was to ensure that the higher education community was engaged in what is a fairly fluid process, and engaged early. We want to provide a mechanism to bring different parts of the community together around areas of common interest."
Among those common areas of interest are potential targets that Congress's Joint Committee on Taxation identified in a report in February. The panel, which advises lawmakers on tax issues, suggested, for example, that they consider ending the exemption that protects college employees from having to pay federal tax on the tuition waivers they receive for themselves or their children.
That perquisite came under attack during a major review of tax benefits in 1997, and the joint tax committee says eliminating it would save the Treasury $1.9 billion over a decade.
The panel also proposed merging several tax credits for college expenses, including the Hope and Lifetime Learning credits enacted in 1997, into a single credit, to "promote simplicity" and potentially save funds.
Congressional tax writers have also raised the possibility of changing federal rules that would reduce the tax benefit to individuals who donate land to colleges and other nonprofit entities, which would produce as much as $2.5 billion over 10 years.