Del. Governor Proposes $3.7 Billion Spending Plan - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

Del. Governor Proposes $3.7 Billion Spending Plan

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DOVER, Del. (WBOC/AP)- Four taxes raised in 2009 in Delaware wouldn't go back to their original levels as scheduled under the budget plan Delaware Gov. Jack Markell announced day. Those taxes are set to expire this year. It is a part of a $3.7 billion operating budget proposal for the fiscal year starting July 1.

Delaware raised these tax levels to help deal with the fiscal crisis at the start of Gov. Markell's first term. And that plan included a four-year sunset. Officials hoped the state wouldn't need the extra revenue at that point.

Gov. Markell's plan for the supposed-to-sunset taxes looks like this.

The top income tax rate has been dropping and would drop again from where it currently is but still be higher than it was in 2009. The exact same goes for the gross receipt tax on businesses. On the other hand, the corporate franchise and estate taxes will both stay where they are. This and some cuts close a $56 million revenue gap in the proposed budget.

"We're not going to cut our way to prosperity," said Gov. Markell. "We're not going to tax our way to prosperity. The only way out - the only way we want out - is to grow our way to prosperity. The economy takes off and we grow our revenue that way. But in the meantime, it's our responsibility to deliver a balanced budget and we think this makes the most sense."

People in Sussex County are mixed on the governor's plan.

"They have to pay someone to do state jobs," said Allison Pfeiffer. "So, why not keep the taxes where they are?"

"We are spending our tax money in our government very foolishly," Norman Miller said. "If we were a business of our own, we would find a way to cut expenses."

"I came to Delaware," said Sally Beaumont. "Because of all the low taxes. And a little bit extra won't hurt us all that much."

"A promise is a promise," Sen. Gary Simpson, R-Milford, said in a statement. "And when enough Republicans agreed in 2009 to enact these tax increases it was promised that they would sunset in a timely manner. And that promise should be honored to the taxpayers of Delaware. It's my feeling that they can better spend those dollars that are kept in their own pockets rather than giving it to the government and have the government spend those dollars."

The budget also includes about $7 million for items new this year, like putting 27 mental health professional in middle schools and six new state troopers.

"I think what people in the state look to us to do is get the very best return on their investment," Gov. Markell said. "That means investing in schools, putting people back to work, protecting the most vulnerable. That's exactly what this budget does."

The spending plan unveiled Thursday is 3.5 percent higher than this year's budget. It includes $40 million in additional spending for personnel costs and $35.8 million in new Medicaid spending.

The governor's office says the proposed changes balance the budget for 2014. But they will still likely lead to a 2015 deficit in Delaware.

There is likely to be a lot of discussion over the next month and a half about the tax rates not fully expiring. Lawmakers head into six weeks of budget hearings next week.

 

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