Daniello: We Need Serious Negotiating Partners, not Paul Ryan wannabees.

Filed in Delaware by on April 23, 2014

Yesterday, I was emailed this op-ed by John Daniello. I have checked the News Journal and it looks like it it has yet to be published, which is odd, since the News Journal would publish the grocery lists of Senator Lavelle and GOP Chairman Copeland if given the chance. So here, in full, is Chairman Daniello’s op-ed, and afterwards, I have some unsolicited advice for our Democrats in the General Assembly:

There is plenty to be done as it applies to our economy and infrastructure

New Castle — The Chairman of the Delaware Republican Party suggested that Delaware is on its path to becoming “another Detroit.”

Yes, both Delaware and Detroit got a lot of snow this winter. Beyond that, I’m not sure the Chairman’s comparison made much sense. Let’s look at the facts:

* Delaware had the 5th highest job growth in the nation last year, according to the Bureau of Labor Statistics.
* Delaware added 9,900 jobs in the last 12 months and its job growth rate exceeded the national average, according to the Department of Labor.
* Delaware’s unemployment rate has dropped almost a full percentage point in that time, to below 6.0%.

Delaware’s economy is growing stronger every day, so clearly that comparison doesn’t hold water. Maybe the Chairman of the Republican Party wasn’t talking about the economy. He did talk about the ‘reckless tax, borrow and spend policies of the Democrats.’ So, maybe he was talking about taxes and fiscal responsibility. Let’s look at the facts:

* Delaware was just reaffirmed last month as one of ten states with a AAA bond rating from all three bond-rating agencies.
* Kiplinger’s rated Delaware as the number one most tax-friendly state in the U.S.
* The Tax Foundation ranked Delaware as having the 13th best Business Tax Climate in the country.

The facts are that Governor Jack Markell and the Democratic General Assembly have kept Delaware’s fiscal house in order. To claim otherwise, the Chairman has to selectively pick and choose his statistics. For example, he conveniently chose FY 2010 as his starting point to analyze the growth in spending since Governor Markell took office. He failed to point out that was the year the state implemented a 2.5 percent across the board pay cut to all state employees – making that year an artificially low starting point. In fact, the average growth in the State’s operating budget since FY 2009 has been just 2.3%.
Unlike Detroit, Delaware has tackled its rising pension and health costs. With all the parties at the table, the General Assembly enacted a series of reforms that will save taxpayers more than $489 million over the next 15 years. Delaware has a well-funded pension system, unlike many states.
The facts are that Delaware Democrats have led our state through several challenging years and things are getting better. They have tackled the tough issues and done what is necessary to keep our state economically fruitful and fiscally sound.

Delaware Democrats in the legislature are committed to working with their counterparts in the Republican Party. Disagreement is to be expected, but all members of the assembly were elected to work through these disagreements and come to legitimate alternative solutions.

For example, Republican State Senator Dave Lawson proposed recently that the state should cut 2% from its budget. He offered no specifics, even though he sits on the budget-writing Joint Finance Committee. He suggested that 2% should be cut without affecting personnel, employee wages, or ‘critical services,’ a term he didn’t define. This is not a serious solution from a legislator who sits through hours of budget hearings. He is merely calling for ‘cuts’ without taking responsibility for where they should be made.
Delaware is not Detroit, but we can learn from it. Detroit got to where it is today because politicians believed that they could write budgets and make financial commitments that were not based in reality. Proposing across-the-board cuts that affect neither services nor salaries are just that kind of fanciful accounting.

“When no one is willing to compromise or reason together – nothing gets done. Everyone suffers,” Richard Heffron said recently. The people of Delaware want to see a government that is working together and investing in their future.

In our two-party system of government, political leadership must meet at the negotiating table bringing legitimate and supported proposals along with them. There is plenty to be done as it applies to the economy and our infrastructure, but the only way to get to those important issues is to stop pointing fingers and to start working together. Calm, sane heads must prevail.

I may be no fan at the moment of Governor Markell and Attorney General Beau Biden, and I will voice my criticism of them. I, and others here at Delaware Liberal and throughout the left side of the Delaware blogosphere will criticize Democrats when we feel they are not pursuing the correct policy. But when faced with the rather childish and yet malignant attacks and proposed policies of both the National and State Republican Parties, I tend to defend the Democrats, especially when they are right.

Here, Copeland is false in his comparison and critique, and Lawson is living in the same fantasy land as his national counterpart, Paul Ryan. Could things be better in Delaware right now if different policies were pursued? Sure. But they would only be better if more liberal policies were enacted. At the same time, things are not as dire as Copeland would have you believe, and even if they were, Copeland and his fellow Republicans everywhere have no ideas about what to do about it. Their only solution is more tax cuts for the rich and deregulation, both of which were responsible for 2008 crash in the first place, and both of which will further harm your average Delawarean.

But since Governor Markell and the Democrats in the General Assembly are not finding serious partners at the negotiating table with their counterparts on the right side of the aisle, I have some advice: Do not negotiate with yourself. Do not pare your offers down to entice Republican participation. Do not move to the right in your negotiations. Basic negotiating fact: your starting offer should not be what you want as your end point. If the Republicans are not moving towards you, you do not move towards them. You move away. To the left. Sure, they may scream at first, but eventually they will move towards you. And even if they don’t, you will still have a better policy outcome than a compromised conservative one.

You want a solution to the budget deficit? How about a new top rate for incomes over $400,000? Explain to me why those making $60,000 and those making $500,000 should be paying the same top marginal tax rate? In what universe is that fair? Put that on the table and see what happens. Maybe the Republicans move towards you. But if they don’t, a more progressive tax structure is still better and a flat tax structure.

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  1. John Manifold says:

    In the same category: State Chamber’s gauzy demand that State whack pay for the professionals it employs.

    https://www.documentcloud.org/documents/1106370-chamber-letter-to-markell.html

  2. Good point. These professionals make less, sometimes FAR less than they would in the private sector. So, let’s make their salaries even LESS competitive with those in the private sector.

    Then, the Rethugs can complain (of course, they already do) that government is awash in incompetence. After they’ve driven competent professionals committed to public service right out of public service.

  3. John Manifold says:

    Notice also that the Chamber’s concern-trolling about the State’s pursuit of unclaimed property. The letter says the state shouldn’t hire out-of-state experts to chase out-of-state corporate HQ’s but should “train and employ Delawareans” to do the work. So a pay grade 14 at 9th & French should be auditing Coca-Cola. I see.

  4. Geezer says:

    We shouldn’t be stealing property and calling it unclaimed in the first place.

  5. John Manifold says:

    Actually, it’s unclaimed, by all accounting and legal standards. The question is to whom it escheats. Under long-standing law, unclaimed property held by a Delaware corporation escheats to Delaware. The corporation that declared the dividends that were not claimed doesn’t get to keep them.

    http://www.law.cornell.edu/supct/html/91-111.ZS.html

    If the owner of the unclaimed dividends, interest, etc., steps forward, he, she or it can get the money from Delaware.

  6. Geezer says:

    I’m really not interested in the “accounting and legal standards.” Those are changeable and, IIRC, were changed to reduce the time period involved because we couldn’t wait to get our greedy mitts on the money.

    This source of revenue is unsustainable and variable, not to mention basically unfair. If it’s worth paying for, it’s worth taxing people for.

    Is there anything about Delaware as it is that you won’t apologize for?

  7. John Manifold says:

    More tedium from the house obsessive.

    Anyway, the State Chamber wants its sister octopi to retain their windfalls, by any means necessary.

  8. Courtesy of News Journal

    2 cns tomato paste
    16 oz of linguine
    2 cns tomato sauce
    1 blk whole Parmesan cheese
    1 lb deli sliced turkey
    1 lb jalapeño jack
    1 half gallon of 2% milk
    1 sleeve of styrofoam plates
    1 16 oz of liquid Dawn
    12 bulk sized packages of 16 ea rolls of toilet paper 1000 sheets each

  9. Geezer says:

    It was a simple question. I though that you, being a simple man, would be able to answer it. Guess not.

  10. Geezer says:

    “the State Chamber wants its sister octopi to retain their windfalls, by any means necessary.”

    Sister octopi? You do understand that corporations are not “sisters” to a trade organization, don’t you? I ask because you clearly don’t know the difference between the politicians you support and liberals.

    It’s one thing to be a hand-job-giving tool of the Democratic Party. It’s another to be a stupid asshole about it.

  11. liberalgeek says:

    If I understand escheat correctly, it is an escrow of property that no longer belongs to the corporation, and the owner hasn’t been identified yet. The question is who get the unclaimed property and when? The time that was changed was the time from when a corporation turns the property over to the state and when the state assumes ownership of the unclaimed property.

    Heffron and Stellini seem to be arguing that having the state audit companies to identify the unclaimed property is just too hard on those businesses (who wouldn’t otherwise put the property in the lost-and-found box that is the escheat). I call bullshit on both of them.

  12. John Manifold says:

    LG: You’ve nailed the issue.

  13. Geezer says:

    Who are the firms doing the auditing work?

  14. Geezer says:

    Since our resident Democratic Party apologist suddenly became hoarse, I did some research myself on the escheat situation, and now I know why Mr. Manifold suddenly clammed up.

    It’s not very different from the red-light camera situation — the state has hired a firm called Kelmar to pursue this “unclaimed” property, mostly stock and dividends, and Kelmar keeps a cut of everything it collects. The company made what looks like about 10% in 2012, when the state collected $300+ million.

    Here’s what Heffron wrote in making his argument that $25 million per year in escheat money should be dedicated to infrastructure: “It is a fragile revenue source, derived in large part from aggressive audits conducted by out-of-state contract auditors upon Delaware incorporated companies who, for the most part, have no employees or facilities in Delaware — and who have many options these days as to what state law to use for incorporation of their operating entities. Outsourcing a governmental audit function and paying tens of millions of dollars to out of state contractors, rather than training and employing Delawareans to perform what audit work is fairly required, cannot continue. And escheat cannot remain, over time, a significant component of our operating budget. Directing additional amounts from this revenue source to extraordinary “one-time” infrastructure projects is prudent.”

    John Manifold has manifoldly misrepresented what Mr. Heffron wrote. Were one to take it at face value, the letter could just as easily be interpreted as a call to beef up state employment of auditors.

    Moreover, it is at best disingenuous for Mr. Manifold to pretend that this has not caused any stir in the corporate community. Just type “escheat” and “Delaware” into your favorite search engine and you’ll find articles warning of the same things Mr. Heffron did in his letter. Granted, I expect such complaints and warnings (“concern trolling” to the blithely oblivious Mr. Manifold) from Republicans in general and business-oriented Republicans particularly.

    But what Mr. Manifold does not do is rebut anything Mr. Heffron says, and he comes up with an implausible explanation of Mr. Heffron’s position as well. Remember, this was all brought up in the context of dedicating a portion of escheat money to the transportation trust fund, not in returning that money to corporations.

    Of course, Mr. Manifold doesn’t want a discussion of the escheat issue, because, as I said, ripping off the true owners of that property is not a progressive position. Which is what you should expect of any Delaware Democratic Party apologist, because the Delaware Democratic Party is not progressive either.

  15. Aint's Taking it Any More says:

    Geezer’s hit the nail squarely.

    As practiced by Delaware, escheat is a disaster. To those who think escheat is limited to dividends or unclaimed shares, you are sorely uninformed. Any property acquired by a Delaware company for which ownership is unclear is subject to escheat by Delaware. So, for example, if a supplier ships too many widgets and then does not want them back – maybe too expensive to return or too unique – Delaware will claim those widgets or their value as escheat. Delaware finds out about these widgets by conducting the kind of audit that would make a proctologist drool with envy.

    The escheat mess would be easy to ignore except that Delaware recovers escheat monies from the very same corporations that fund 1/3 of Delaware’s 3 plus billion dollar budget. We’re eschitting on the Golden goose. If we keep it up the golden goose won’t be so golden. When that happens nobody’s political agenda will matter.

    The better revenue raising strategy is to raise the income tax on the upper end, or start cutting into the way too generous tax free treatment of retirement income.

  16. Geezer says:

    The most disgusting part is how little people like John Manifold care about getting the money to its rightful owners. The whole reason escheat laws were enacted was to enable people to find their property. At the same time Delaware was claiming $319 million in “unclaimed” property, $18 million went to the property’s rightful owners.

    Arguing for that money to go to the government is no better morally than arguing it belongs to the corporations. Which is why Democrats are no better than Republicans — worse, actually, since they’d rather steal people’s money than raise funds in the fair way, by taxing the citizens.

  17. Sarah says:

    You know it is just the same with everything in life.
    You’d think past teaches us anything, but alas.
    Disagree if you will but the world is changing, and we have no control over it.
    For instance, imagine Obama had any balls to put Putin to his place, but it seems like it’s never happening, welcome third world war.
    Great post, thanks!
    Sarah http://phyto-renew350i.com/