Delaware Lawmakers Leery of Cutting Senior Tax Subsidies - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

Delaware Lawmakers Leery of Cutting Senior Tax Subsidies

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DOVER, Del. (AP) - Delaware's legislative budget writers signaled Thursday that they have no political appetite to swallow Democratic Gov. Jack Markell's proposal to cut property tax breaks for senior citizens in order to balance the budget for the fiscal year starting July 1.

Currently, the state offers school property tax subsidies of 50 percent, or $500, whichever is less, to property owners ages 65 and older.

To help balance his $3.9 billion spending plan, Markell proposed saving $12.6 million by cutting the subsidy in half, to 25 percent, or $250.

The cost of the tax subsidies, currently offered to more than 60,000 residents, is expected to grow from $23.6 million this year to more than $46 million by 2025, a trend administration officials say is fiscally unsustainable.

But after being presented with several options by Markell's finance director, Tom Cook, members of the Joint Finance Committee refused to act.

"We're just going to put this issue on hold until some undetermined time," said committee co-chair Rep. Melanie Smith, D-Bear.

Several lawmakers made it clear that they want to preserve the senior tax break, especially for those already eligible for it.

Committee co-chair Sen. Harris McDowell III, who sponsored the legislation establishing the tax subsidy in 1999, said cutting it could make it more difficult for local officials to pass school funding referenda.

"Seniors have a tendency to pay attention. ... This small $500 benefit that we give them is really difficult for me to give up," said McDowell, D-Wilmington.

In an effort to make things more palatable for lawmakers, administration officials suggested allowing seniors a subsidy of 50 percent or $300, whichever is less, backing off their initial proposal of 25 percent or $250. Cook also suggested closing the subsidy program to new applicants and developing future means testing based on state income taxes to determine whether a homeowner should be eligible for the subsidy.

Committee members seemed more receptive to the idea of grandfathering currently eligible residents and exploring the idea of means testing, but they nevertheless declined to act.

"I don't think this is a decision we can just arbitrarily make," said Rep. James Johnson, D-Wilmington, suggesting that more members of the General Assembly should weigh in on the issue.

Meanwhile, the committee voted unanimously to reject Markell's proposal to give the state Department of Education $7.5 million in new state funding to sustain Race To the Top school improvement efforts, which were initially funded with a $119 million federal grant. Markell's proposal including using state taxpayer funds to pay for 10 DOE positions previously funded with federal money.

Several lawmakers said there's little proof that the Race to the Top has made any significant difference in improving student achievement, and suggested that the money has gone instead to bureaucratic expansion and expensive data collection efforts.

"I have not heard from one person at ground level who thinks this has done anything," said Sen. Karen Peterson, D-Stanton.

While eliminating the $7.5 million earmarked for the state DOE, committee members nevertheless agreed by a 7-5 vote, with Peterson joining dissenting Republicans, to add $3.75 million in new spending to sustain Race to the Top programs. That money covers teacher preparation and development and student standards and assessment at the local level, as well as $600,000 for the DOE to maintain an online student data portal used by teachers. 
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