Allied Charities of Minnesota

ACM Update

12 Mar 2020 13:07 | Allen Lund (Administrator)

Members,

On Tuesday, March 10 SF3469 and SF3628 were heard in the Senate State Government Finance and Policy and Elections committee.

SF3469 would move all state mandates to LPE. Thanks to Senator Koran for his work on this.

SF3628 would raise the external audit trigger from the current $750,000 to $1,250,000. I testified that since we pay back 85% of our sales to our patrons in prizes, $750,000 in sales for us is actually $112,500 that we get to the bank to pay expenses, taxes and make donations. Raising the number to $1,250,000 would mean that it would be $187,500 to pay expenses, taxes and make donations.  Geno Fragnito, CPA lobbyist and GCB board member, testified against raising the number, citing the importance of the external audit in identifying fraud. Thanks to Senator Rosen for her work on this.

SF3628 had 5 amendments:

A-1 states that a charitable organization cannot pay their GM more than the Governor ($130,000).

A-2 states any salary in excess of $130,000 will not be counted towards LPE or AE.

A-3 states a limit on the salary of a gambling manager (no amount given).

A-4 states that an organization must submit to the GCB by February 1, of any year the amount of salary and benefits to anyone in the organization that is paid a salary.

A-6 states that an organization that does not have at least 20% of LPE (minus the taxes and fees, A8 & A18) divided by Allowable Expenses will be placed on probation (i.e. charitable LPE & Other LPE divided by expenses to get your percentage). If an organization does not improve to the 20% in the following fiscal year their license may be suspended and/or may be fined up to $10,000. Taxes would no longer be part of the equation for figuring the star rating. See the attached pdf from the GCB (FY2019 by city) to figure your own percentage to see where you would fall.   

Using the FY2019 numbers from the GCB website eight of the top 68 dollar grossing organizations would be on probation: Merrick Inc., Amvets Post #1 Mendota, South Robert Street Business Assoc., German Days Belle Plaine, St. Paul Fire, Cottage Grove Athletic Assoc., Forest Lake Athletic Assoc. and Fairmont Youth Hockey. These eight organizations paid a total $5.6 million in taxes in FY19 and had a total of $2.1 million available for donation. These eight organizations pay 2.6 times more in taxes than they have for donations.

Both bills were held over for further consideration, no vote taken.

If you wish to listen to the audio of the committee hearing, here is the link: http://mnsenate.granicus.com/player/clip/4880?view_id=2

No news on a House tax bill. All tax bills must originate from the House. I still believe that there will be a tax bill, but this week Governor Walz stated that the surplus may be impacted by COVID-19. If the House does not submit a tax bill, there will be no relief for us this year.

Attached are suggestions for dealing with COVID-19 in our sites.

fy19-report-summary-by-city.pdf

With the situation surrounding the Coronavirus.pdf

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