Tag Archives: Delaware

Franchise Tax Revenue Not Keeping Up With Spending

Jonathan Starky (@jwstarkey) has good article in today’s New Journal about what potentially would be a boring article to many except readers of this blog: “Revenues keep dropping in key state income source: Corporation fees falling as businesses decide not to go public”.

Delaware’s franchise tax is the state’s primary source of that corporate taxation, generating more than $600 million annually. Yet adjusted for inflation, franchise tax collections have fallen 20 percent in the decade since the technology bubble sent a tsunami of tax revenues flowing into Delaware. Franchise tax revenues have risen in absolute dollars, but dipped as a percentage of Delaware’s General Fund budget even as tax increases in 2003 and 2009 raised the franchise tax cap from $150,000.

[snip]

Now the financial council expects revenues from the tax to fall 1 percent in the fiscal year ending this June, and another 1 percent in fiscal 2013. Big-ticket items are causing pressure on the other side of the budget, with spending on Medicaid increasing 37 percent next year after reductions in federal dollars. Spending on state employee benefits also continues to increase, even after a deal last year to curtail benefits to save money.

Being so dependent on Wall Street for our money, Delaware is looking for ways to help kickstart IPOs. The recently signed JOBS Act, legislation introduced by Rep. John Carney, may be of some help. But in reality, Governor Markell is going to have to look at less spending over the next few years instead of more.

How Not To Fight Graffiti

Rep. Ed Osienski (D-24th) and Sen. Dave Sokola (D-8th) have introduced legislation that would add a suspension of driver’s license to the punishments already given out for graffiti. I wonder if this is the correct approach. Over the last few years, the Delaware legislature has strengthened punishments for those caught tagging or with graffiti supplies, but this hasn’t worked. In a quick Google search of programs that fight potential graffiti artists in Delaware, I’ve come up empty. So my question is this: Does the State of Delaware have active and successful programs that fight graffiti? If so, how can we educate more kids? If we don’t have viable programs, shouldn’t we? There are plenty of programs throughout the United States that do successfully fight graffiti.

Markell’s Elephant in the Room: Fisker

We were conned like everyone else. But for three years the Boxwood plant remains empty and will likely remain so. No 1,500 jobs. And with the recent news articles in the Times, WSJ and TNJ, we’ve learned that Fisker was playing the long con. Now that we all see we’ve been bamboozled, what will Markell’s reaction be? After months of publicly ignoring the elephant in the room, what will be the Administration’s response be today and in the future? What is Markell’s Plan B for Boxwood?

Ron Williams On Double Dippers

Ron Williams wrote an interesting column yesterday about legislative pay and the so-called “double dippers.” Here’s an interesting nugget from that story, the AG’s office determined that it was perfectly legal by the state laws that legislators could be paid for not showing up to committee meetings.

“We conclude that the relevant statute does not authorize the legislator’s state job pay to be docked under your scenario” if they don’t attend a committee meeting, Biden wrote to Wynne.

Legislators can receive several thousand dollars in extra pay depending on the type of committee they serve on. “There is no … provision when a legislator is absent from legislative business,” the opinion said. (Now we know why Sen. Colin R.J.M.A.B.C.D. Bonini, R-Dover South, is so often absent from committees.)

“As a result, each legislator in this situation has the discretion to double-dip without the consequences set forth in the policy,” Biden ruled.

This should change. I think this is something that all proponents of good government should get behind, regardless of party or ideology. It shouldn’t be too difficult to propose a legislative fix that requires legislators to document their hours spent on legislative business – especially attendance to caucus meetings, committee meetings and legislative sessions.

*UPDATED* Delaware Senate Passes Civil Unions Bill

SB30, the bill to allow civil unions in Delaware just passed 13-6-2. The main opponent of the bill was Senator Venables, who tried to attach 2 amendments. One amendment was to allow family members or other non-romantic relationships have civil unions and the other was to put civil unions up on a state referenda. Both failed.

The bill must now be passed by the House.

From the News Journal:

The bill survived two hostile amendment efforts by Sen. Robert Venables, D-Laurel, and a motion to table it by Sen. Joe Booth, R-Georgetown, who wanted more time to draft other amendments.

Venables’ first amendment, rejected 12-2, with five not voting and two absent, would have expanded the bill to include opposite-sex couples and other family members who live together. The second, rejected 12-6, with one not voting and two absent, would have required endorsement in a statewide referendum before the law could take effect.

“I’m not against homosexuality,” Venables said. “I don’t understand it, but I’m certainly not a bigot. I’m not a hater.”

Venables and Ennis were the two Democrats voting against the bill. Bonini, Lawson, Simpson and Booth.

Civil Unions Bill Passes First Test

Yesterday the Senate had its first hearings for the Civil Unions bill. The bill passed out of committee (this was a worry) to go to the full Senate for a vote. At least in New Castle County, the bill hasn’t been particularly controversial (this is my feeling at least). However there are still critics and there seemed to some rather odd testimony yesterday:

The Rev. Doug Gerdts, pastor of First & Central Presbyterian Church, said nothing changed about his love for his daughter when she told him she was gay.

“But I found myself sad and angry,” he said. “Angry at a yet-to-be identified person or persons who might attempt to make her life painful, simply because of the way God created her. Sad that her life would have challenges and struggles that mine doesn’t.”

The Rev. Dale Mast, pastor of Destiny Christian Church of Dover, said he had a dear friend who was gay, whom he counseled and stood beside, who got AIDS and “went on a sexual rampage out of his anger.”

Mast said he fears what would come next if Delaware adopted civil unions — heterosexual unions with 14-year-old girls? He said pastors in Southeast Asia have told him of grandfathers taking their granddaughters to hotel rooms.

“I encourage you not to pass this,” he said. “What else will come?”

Is the new talking point that civil unions will lead to the legalization of marriage between adults and minors? Hey, at least he didn’t say marriage with dogs or box turtles. I hate to break it to Rev. Mast, but marriage between adults and minors is legal in many places already, especially in places hostile to same sex marriage. One thing that strikes me is that the opponents of same sex marriage have no new arguments – it’s all rather stale. It’s going to be harder and harder for them to argue as more states legalize these unions and civilization continues to stand.

I’ll admit to mixed feelings about this bill. I’m happy that a lot of people will benefit from this bill but I’m still sad that prejudice remains – the word “marriage” is only reserved for opposite sex couples. I’m hoping civil unions are just a temporary step to full marriage.

New State Budget Proposal

The General Assembly released a plan for state benefits yesterday. The News Journal has the story:

A consensus proposal to rein in state employee retirement and health care benefits that would save Delaware $128 million over the next five years emerged in the General Assembly on Wednesday.

But the savings would be nearly wiped out by a proposed 2 percent raise for state employees that could cost about $120 million over four years, starting June 30, 2012.

While in the short term, the gain appears to be offset by the pay raise, in an interview Gov. Jack Markell emphasized the pension changes alone would save the state an estimated $327 million over the next 15 years.

They have the usual sniping from the opposition plus a bonus Selander zinger.

House Minority Leader Greg Lavelle, R-Sharpley, said the proposal goes against Markell’s stated goal of saving $100 million over the next five years.

“I didn’t know that zero was the goal,” Lavelle said.

…

“If Greg Lavelle thinks that state employees don’t deserve a pay raise for the next several years, I guess that’s his prerogative,” Markell spokesman Brian Selander said. “We don’t agree with him.”

The changes include increasing the state workers contribution to their healthcare to 5% of pay from 3%, increasing the period until a new employee is fully vested and also decreasing benefits for pre-Medicare retirees. A lot of the proposal has to do with decreasing incentives for early retirement and raising the retirement age.

Equality Delaware Poll: Delaware Favors Civil Unions By Large Margin

Equality Delaware released the results of a poll of Delawareans yesterday which showed large support for civil unions in Delaware. Equality Delaware is the group that has sponsored the civil unions bill in Delaware (which will be introduced in the Senate next week).

The poll, which was conducted February 28 through March 6, 2011 by Lake Research Partners, shows that more than six out of 10 voters (62%) in Delaware favor allowing same-sex couples to form civil unions which is twice the number who oppose such a law (31%). The remaining 7% of voters are undecided. Nearly 700 likely voters in Delaware participated in the poll, which has a +/- 3.8% margin of error.

There were some interesting findings in the poll. Every county supports marriage equality, all age groups support and all political leanings except Republican men support civil unions.

    • The overall intensity of support for civil unions, which is much stronger than those opposed with 45% of the Delaware electorate strongly favoring same-sex civil unions compared to just 21% who strongly oppose civil unions.
    • Voters in every corner in the state supporting same-sex civil unions. New Castle County voters are in favor of civil unions by a margin of 70% to 21%. In Kent County, civil unions are favored 49% to 43%, and in Sussex County 51% favor civil unions and while 47% are in opposition.
    • Democrats (73%) and independents (63%) staunchly supporting civil unions, with Republicans divided—45% in support and 51% not in support. Republican women, however, are narrowly in favor of civil unions by a margin of 50% to 48%.
    • Support for civil unions among a majority of men (58%) and women (66%).
    • Solid majorities in every age group standing in support of civil unions, including 55% of seniors, 64% of voters between the ages of 50-64, and 64% of voters under the age of 50. Support for civil unions is even higher among the youngest voters.

    • If there are still legislators on the fence about this bill, perhaps this poll will help them decide. The debate on this bill will be interesting to watch.

    Liberal Things To Do

    If you have an open evening on Saturday, you may consider heading over to Theatre N for a screening of Inside Job at 8:30, followed by a Q&A session about the current state of Financial Regulation. One of the people that will participate in the discussion is Greg Wilson, Communications Director with the Delaware Community Reinvestment Action Council. Greg is a great resource for all things FinReg. If you can’t make Saturday night, there are other showings throughout the weekend, but the discussion after the Saturday showing promises to be interesting and enlightening.  Here is a speech by the director of the film, Charles Ferguson, PhD. at MIT about his film.

    Also, if you missed the rally yesterday in Wilmington in support of Wisconsin unions, you’re in luck. There is a second rally on Saturday at noon on The Green in front of the Statehouse in Dover. The Rally to Save the American Dream is being organized by a variety of Unions and liberal PACs. There are plans for carpooling from Sussex county being organized by Joanne Cabry. I don’t know if Joanne wants her number published here, but if she wants to, she can put it in the comments section.

    Have a liberal weekend.

    Former Governor Russell Peterson Has Died

    Former Delaware Governor Russell Peterson has died.

    Former Delaware governor Russell W. Peterson, known for his environmental efforts, died Monday evening at age 94.

    His most memorable effort came in the Coastal Zone Act of 1971, for which he was known worldwide. He also was known globally for his efforts to protect coastlines beyond Delaware. Peterson advised Presidents Nixon, Ford and Carter on environmental policy, and later became president of the National Audubon Society.

    His wife, June, said he died at 8:10 p.m. at home. She said he had been declining for some time. He suffered a stroke Monday morning and his system gave up, she said.

    Just by reading this short excerpt of his biography, you can already see how unusual he was. He could work across party lines and was a fierce protector of the environment. What governor could you say that about today? Plus, he was a chemist!

    Some of the highlights of his career include:

    • Peterson’s first official act as governor was to send the National Guard home after 10 months of duty in Wilmington, where they had been deployed by Gov. Charles Terry after rioting that followed the 1968 assassination of the Rev. Martin Luther King Jr.

    • Peterson reshaped Delaware’s government by eliminating more than 100 commissions and boards, called “fiefdoms” by some observers, and forming an 11-man Cabinet.

    • He did away with Delaware’s scourge — Red Hannah — the nation’s last whipping post.

    • He defended Delaware’s coastline from Shell Oil Co.’s expansion plans — first ordering a moratorium on coastal development, then working tirelessly for passage of the Coastal Zone Act. The landmark 1971 law outlawed heavy industrial development on the state’s coasts, infuriated many in Delaware’s business and political communities, and spawned similar efforts around the world.

    • He appointed the first black member of the University of Delaware’s board of trustees — Arva Jackson — insisted on recruitment of the first black members of the Delaware State Police, and pressed for the state’s open housing law.

    Delaware Delegation Proposes National Park

    This is a bill that’s long overdue.

    WASHINGTON — Today, the Delaware Congressional Delegation, Sens. Tom Carper and Chris Coons (both D-Del.) and Rep. John Carney (D-Del.), introduced historic legislation to authorize the creation of a national park in Delaware – the First State National Historical Park Act of 2011. 

    Currently, the first state to sign the Constitution, the first state in the union, is the last state to have a national park. If the First State National Historical Park Act of 2011 is adopted, that would change. The First State National Historical Park Act of 2011 would create a park celebrating early American Dutch, Swedish and English Settlements located throughout Delaware, and Delaware’s role in the events leading up to  the founding of our nation. The park will include sites and attractions in each of Delaware’s three counties. The legislation also allows the Park Service to work with other historically significant sites that are not included in the National Park, but can be included in the National Park materials, tours and other related items.

    This is the first bill sponsored by Rep. John Carney and with a GOP-controlled House he might not get many opportunities. A national park for Delaware seems like a good idea, but does this idea seem workable?

    Delaware’s Budget Mess

    Today’s News Journal takes a look at the state pension obligations and how it’s impacting the state budget. The news is not good:

    According to Ann Visalli, director of the Office of Management and Budget, 16 percent of the state’s work force is eligible to retire today. “We have an aging work force,” she said.

    Markell’s budget calls for $3.2 million to be pared from employee health and pension costs, a proposal he said will save at least $100 million over five years. However, he did not detail how those savings would be realized.

    I think we’re going to have to take a hard look at the proposals that will come out regarding pensions. Despite rumors to the contrary, the pensions are good but not luxurious. The NJ spells it out:

    Some pensioners receive less than $600 per month in benefits, while almost 5,000 receive benefits of less than $1,000 a month, Hassman said.

    Even those who worked 30 years receive an average of just $23,000 a year, he said.

    They haven’t seen an increase in their pensions for more than 5 years. The other places where the governor plans to cut is Medicaid and assistance to the indigent:

    Markell also wants to cut Medicaid costs, which are consuming an ever-increasing portion of the budget, and eliminate $3 million in cash assistance for adults who are unemployable, destitute and often homeless.

    Again, we haven’t seen the Medicaid proposals yet but my nose is twitching saying we’ll probably raise eligibility requirements, meaning people will lose their coverage. The rising cost of health care is taking a huge bit out of our economy.