Del. Lawmakers Prepare to Wrangle Over Tax Increase Proposal - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

Del. Lawmakers Prepare to Wrangle Over Tax Increase Proposal

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DOVER, Del. (WBOC) - A vote to raise taxes on businesses is temporarily on hold in Delaware. The state House of Representatives was to have debated the proposed tax increases Tuesday.

Staff for the House majority says a key official, who would have testified on the bill, was unavailable. So, it looks like lawmakers will take this up next week instead.

The proposed tax hikes generate $51 million by increasing annual fees on limited liability companies and business partnerships, as well as the minimum corporate franchise tax. Gov. Jack Markell asked for the increases to balance next year's budget.

"We did see an opportunity to generate some additional revenue," he said. "And 90 percent of these additional revenues will be paid by people not in Delaware."

That's because Delaware is the technical home to more than one million businesses.
but House Minority Leader Rep. Danny Short, R-Seaford, says that could still hurt the state's business climate.

"When you take money from people - whether they are in state or out of state - they make changes in their businesses to offset that," he said. "You're really taking $51 million out of the economy right now and giving it to the state. I think it's really early in the process. We're considering these in March. We've got all the way to June to finish this budget."

Rep. Short worries about the message that sends to businesses. But Gov. Markell says the timing is right.

"The Joint Finance Committee has a lot of work to do," the governor said. "As they do that work, they need to know what revenue they can count on."

Republicans have also questioned taxing the existing business community more heavily saying it would be better to grow business in Delaware to generate more revenue. Gov. Markell believes it is growing.

"Our unemployment rate is at 6.7 percent. That's not as low as we'd like it to be. But when you're creating over 9,000 jobs over the last 12 months, that's a good sign."

These tax hike proposals are separate from the gas tax and water service fee increase proposals you've heard a lot about. The money that would come from those is not a part of the administration 2015 budget plan.

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