John Kowalko Gets it Right
‘Revenue neutral’ is really the new trickle down
A recent Dialogue Delaware column by Secretary of Finance Tom Cook purports to plan a stabilization of Delaware’s revenue streams and expenditures. Couched as a realistic way to maintain necessary services that the state is obligated to provide and be enacted as “revenue neutral” it is no more than a regurgitation of the failed trickle down economic policies that have clearly established the wrong path to choose for any sustainable and sensible economic policy.
When the General Assembly was first presented with this full report, I and others raised the serious concern that nowhere in these recommendations was any protocol or reference to establishing much needed personal income tax brackets for the higher earners. I have introduced HB 181 and HB 196, which create two higher individual tax brackets for individual earners making over $125,000 in taxable income and over $250,000 in taxable income.
The net result, for example, to an individual who makes a quarter million dollars a year in taxable income would be an additional obligation of $625 per year. I point this out because it is never an inviting task to ask taxpayers at any level of income to increase their contribution. Therefore, minimizing that burden is the fairest and most honest way to do it. I also introduced legislation that would minimally increase the maximum corporate franchise tax cap enjoyed by the richest corporations in Delaware with HB 216. This would raise significant revenue without burdening any of our small or local business community. In fact, the proposal was met with little to no resistance from the corporate community.
The message is often garbled when we start speaking in the pleasant sounding vernacular of “revenue neutrality” while facing a $160 million to $200 million deficit. It establishes a somewhat foolish and irresponsible tone that will plunge our taxpayer base further into the red and blithely ignores the reality of the challenges facing Delaware. To proclaim a bipartisan effort purely because there are as many D’s as there are R’s belies the reality that bipartisan agendas and motives are not restricted to any letter or initial following one’s name. To abandon a revenue source such as the Estate Tax under the false premise that it negatively influences the PIT revenue or will drive the wealthier class from Delaware while establishing absolutely no realistic revenue replacement suggestion goes beyond the pale and the realm of fiscal responsibility. Secretary Cook’s suggestion that this report advocates broadening the PIT base belies the reality that it does no such thing without establishing higher brackets such as exist in our neighboring states.
It is befuddling to me that the terminology of “fiscal controls” is bandied about while this Administration and its agencies such as the DOE have not only grown their bureaucracies over the last few years, but continue to subsidize the failed Race To The Top agenda by allowing eight new six-figure positions to be created at taxpayer expense without the knowledge or consent of the General assembly.
Absent is any logical proof that a Triple-A bond rating will somehow miraculously enhance revenues necessary to pay for needed government services or that cutting revenue streams while failing to impose new revenue sources is anything other than a continuation of failed “voodoo” economic policies. Using the expression “structural imbalance” as Secretary Cook does in his conclusion does not excuse the utter lack of suggested relief for this imbalance in either of the Governor’s created committees. Responsible leaders should view this report in the context of kicking the proverbial can down the road. Even more alarming is that it is a road to perdition.
John Kowalko represents the 25th District in the Delaware House of Representatives.
Thank you Representative Kowalko, for continually fighting the Bloom Energy debacle. We need someone fighting on our side and getting the word out.
“PSC Docket # 13-250, was opened over a year and a half ago at my petition request (joined by Senators Lawson and Simpson) which requested that, in the interest of billing transparency, the monthly individual amount for the Bloom surcharge be listed on each rtepayers bill so they might see how much extra they are paying.”
Representative John Kowalko, News Journal, October 30, 2015.
http://www.delawareonline.com/story/news/2015/10/30/bloom-energy-misses-hiring-metrics/74862306/
I have also heard the phrase “revenue neutral” or its cousin”zero-sum game” in various WEIC meetings and town halls as it pertains to the merger of the Wilmington schools with RCCSD and its financial impact on Red Clay’s taxpayers. Assuming that even happens, it’s a massive realignment project that in no way that I can see would possibly have its costs offset with reductions in other areas of spending.
WEIC is also tied directly to the assumption the State of Delaware will provide additional funding to make it happen. And that’s something else that I worry about when I think of the viability of WEIC.
As you can see in the other thread on this issue, Secretary Cook has visited DL to defend his recommendations from my supposed misrepresentations of it. Perhaps he’d like to give a response to John Kowalko as well?