What Does the 2020 Election Mean for Maine Nonprofits?

With the results of the 2020 election dominating news coverage and social media, you may be wondering what the election results mean for Maine nonprofits. To help answer your questions, here is an initial analysis of the nonprofit implications of the election results.

Overview of election results in Maine

The unofficial turnout for the 2020 election was 75% of eligible voters (more than 800K), far exceeding Maine’s voter participation in any previous election and possibly the highest turnout in the nation. Final numbers should be available soon.

At the state level, the overall composition of the state legislature will remain largely unchanged, although there will be quite a few new faces.

• The House is now 80 Democrats, 67 Republicans, 4 Independents and the Senate is 22 Democrats to 13 Republicans.
• Secretary of State Matthew Dunlap is termed out and his replacement will be voted on by the Maine State Legislature on December 1st.
• Attorney General Aaron Frey will most likely be approved for another two year term.
• Maine’s largest city will see three new faces: April Fournier won an at-large seat, while Mark Dion won the District 5 seat and Andrew Zarro was elected Portland’s city councilor in District 4.
• Portland also passed a slate of progressive ordinances, most notably an increase in the minimum wage. The “hazard pay” provision, which would start at $18/hr is something Portland nonprofits should be aware of and prepare for. MANP is following the conversation around timing of implementation and will keep our membership informed.

In Maine’s federal races, all incumbents won re-election without having to go to a Ranked Choice Vote run-off.

• Congresswoman Chellie Pingree (D-North Haven) will serve her seventh term (62% of the vote),
• Congressman Jared Golden (D-Lewiston) will serve his second term (53% of the vote),
• Senator Susan Collins (R-Bangor) will serve her fifth term (51% if the vote).

In the Presidential election, former Vice President Joe Biden was declared the winner the afternoon of Saturday, November 7th. He won with more votes than any candidate in history. His running mate, Senator Kamala Harris, will be both the first woman and first person of color elected to the seat of Vice President in our country’s history. The pair will be inaugurated on January 20th, 2021 and are said to be working on putting together their cabinet and on a COVID plan.

President Trump received one Electoral Vote in Maine’s second Congressional District and President-Elect Biden received the other 3. Maine and Nebraska are the only two states in the nation that vote split.

Democrats will retain control of the U.S. House of Representatives, albeit with a smaller majority than in 2019 and 2020. As of this writing, control of the U.S. Senate is uncertain pending two runoff elections in Georgia in January 2020. If Democrats were to win both, it would create a 50-50 tie in the Senate (as both Independent Senators caucus with the Democrats) and Vice President-Elect Kamala Harris would cast any tie-breaking votes.

Implications of the election on federal policy

If the U.S. Senate remains divided, it will be difficult for Congress to pass major legislation for the next two years. This means that nonprofits might not expect Congress to make significant changes to federal tax and employment laws, health care policy, or funding for federal programs.

Now that the election is in the past, Congress may begin to reconsider negotiations on much-needed additional COVID-19 relief. MANP and other nonprofits in Maine and across the country continue to advocate for Congress to act as quickly as possible to pass meaningful relief for nonprofits, individuals, businesses, and communities. Specifically, nonprofits are asking Congress to:

• Improve the Paycheck Protection Program (PPP). Many nonprofits would greatly benefit from a second round of forgivable PPP loans and simplification of the loan forgiveness process for borrowers.
• Strengthen the universal charitable deduction. The CARES Act capped the temporary universal charitable deduction at $300 per taxpayer and only allows taxpayers to use this in 2020. MANP and other nonprofits continue to ask Congress to make meaningful improvements to the universal charitable deduction by significantly increasing the cap and extending it through 2021.
• Extend unemployment insurance (UI) relief. The CARES Act only provides federal funds to cover 50% of self-insured nonprofits’ COVID-related UI costs. (The State of Maine does not help with the other 50% of these costs for self-insured nonprofits like they do in other parts of the country, but they did delay repayment for a time.) Nonprofits are asking Congress to cover the other 50% and to extend this UI relief into 2021. Nonprofits are also seeking extension of the Pandemic Unemployment Assistance program–which provides UI benefits to self-employed individuals and laid-off or furloughed workers at small and religious nonprofits that are exempt from UI requirements–and restoration of the $600 per week supplemental UI benefits for most laid-off or furloughed workers.
• Expand the Employee Retention Tax Credit (ERTC). The CARES Act created the ERTC as a refundable tax credit for nonprofits and businesses that maintained their employees during the pandemic. Relatively few nonprofits have used the ERTC, since employers that received PPP loans were ineligible for this tax credit. It is quite possible, however, that Congress could strengthen the ERTC by significantly increasing the amount of the credit for each employee and by allowing nonprofits to use both the PPP and the ERTC for different periods. This could provide significant new relief for many nonprofits that have sustained financial losses during the pandemic.
• Provide additional aid for state and local governments. Nonprofits are asking Congress to provide more federal support for state and local governments. This additional funding is critical to help state and local governments continue to provide essential services despite growing revenue shortfalls. Thus far, the House has supported more funding for state and local governments, but the Senate has opposed it.
• Appropriate federal dollars to help nonprofits and communities. Discussions around additional relief have included proposals for a wide range of appropriations, including increased funding for the Supplemental Nutrition Assistance Program (SNAP), food banks, arts and humanities nonprofits, domestic violence organizations, legal services nonprofits, hospitals, mental health service providers, and the Community Development Block Grant.

Ultimately, the biggest federal policy shifts resulting from the election may be in the Executive Branch. President-Elect Biden may very well change the current administration’s policies that affect nonprofits. Most notably:

• There is a good chance that a Biden Administration would rescind President Trump’s recent executive order that limits the ability of federal contractors and grantees to provide workplace trainings on equity, diversity, and inclusion. This executive order creates many serious problems for nonprofits, so its revocation would be welcome.
• The Biden Administration would also presumably bring an end to the White House’s efforts to undermine the Johnson Amendment, the provision in Section 501(c)(3) of the Internal Revenue Code that protects charitable nonprofits from being caught up in partisan politics. The White House’s support for nonprofit nonpartisanship would be great news for the nonprofit sector.
• Under a Biden Administration, the U.S. Department of Labor could be more generous to workers–and less deferential to employers–in its rulemaking on matters like overtime pay and worker classification.

Implications of the election on state policy affecting nonprofits

After the election, the political dynamics in state government remain essentially the same as they have been the past two years. The Democratic majorities in the Maine Senate and Maine House of Representatives will not have enough votes to override Governor Mills’ vetoes of major legislation that does not have bipartisan support. This ongoing gridlock has several implications on issues that affect the nonprofit sector:

• Maine’s state and local governments will probably have a significant revenue shortfall next year, and it is unlikely that legislators will make significant tax code changes to make up for this revenue. That could lead policymakers to consider new taxes on nonprofits, such as limits on nonprofit sales tax refunds, partial elimination of property tax exemption, or new payments in lieu of taxes (PILOTs). It also could force legislators and/or state agencies to make spending cuts, including cuts to state grants to nonprofits and state investment in critical safety net programs.
• It will be challenging for the legislature and Governor Mills to agree on a new state budget given the large number of bills that were tabled in the last session and the competing demands of balancing the biennial budget during an economic downturn with the increased need for funding arising out of the pandemic. The projected revenue shortfall is $1.4B.
• Nonprofits could find success advocating for policy solutions that have bipartisan support. It is likely that legislative leadership will look to work across party lines on some substantive issues that would benefit Maine’s communities.
• One other implication of the election is that the Democratic-controlled legislature will have the opportunity to draw Maine’s congressional and state legislative districts for the next decade, since the decennial redistricting process takes place in 2021.

Four Recommended Post-Election Actions for Maine Nonprofits

Aside from the impact on specific policy proposals, there are four important action steps that nonprofits should take after the 2020 election:

1. Now is a great time for nonprofits to get to know the new state legislators, county commissioners and municipal officers that are important to your organization’s work. It is essential for elected officials to understand the vital work your nonprofit does in your community so they can make decisions that will improve the lives of the people your nonprofit serves.
2. Next year will provide an excellent opportunity for nonprofits to focus on policy initiatives at the state and local level. For many nonprofits, the decisions made by state and local elected officials–such as investment in affordable housing, transportation priorities, protection of local waterways, or arts funding–have a big impact on their organization’s work and their communities.
3. This fall’s election showed the power of nonprofits’ nonpartisan voter registration, voter education, and get-out-the-vote work. These efforts helped produce a record high number of votes through Early Voting, in-person Election Day voting, and through mail-in absentee ballots. Even if the individual races didn’t turn out the way you would have liked, you should celebrate this high level of civic engagement as a tremendous victory for our democracy – and one that nonprofits played a significant role in achieving!
4. Stand for your mission. Every nonprofit should find ways to use its voice to advocate for its mission. As elected officials, the media, and everyday Mainers turn their attention away from the election in the coming days, weeks, and months, there will be a great opening for nonprofits to begin to share stories about the important work they are doing every day and the ways that decision-makers can help their organizations make an even bigger difference in their communities.

Look for more resources from MANP to help your nonprofit get started in advocating for your mission–or strengthening your existing advocacy work–in the coming months!