UPDATE: Proposed Personal Income Tax Hike Fails in Delaware Hous - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

UPDATE: Proposed Personal Income Tax Hike Fails in Delaware House

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UPDATE: DOVER, Del. -- A proposal from Democratic lawmakers to hike personal income taxes failed early Saturday morning in the Delaware House of Representatives, leaving the path to passing a budget less clear on the first day of the new fiscal year.

Lawmakers voted 24-17 on House Bill 240, but short of the three-fifths supermajority needed to pass the legislation, which would have hiked personal income tax rates for anyone who makes more than $60,000 and created a new tax bracket for people who earned $150,000.

The vote fell along party line votes except for Rep. Andria Bennett (D-Dover), who broke from her caucus and cast the deciding vote against the legislation, citing constituents telling her to vote against the proposal because it eliminated itemized deductions. An amendment to the bill allowed people to elect to deduct the greater of the standard deduction of 50 percent of their itemized deductions.

The bill was seen by many lawmakers as a possible avenue for reversing a move to cut tens of millions of dollars in Grant in Aid funding, which was zeroed out by the Joint Finance Committee to balance the budget.

The cuts to the Grant in Aid have been strongly opposed by fire companies, nonprofits, and organizations that receive the money, saying it will threaten their ability to provide services in the state.

Original story:

Delaware lawmakers have entered the first day of the new fiscal year without passing a budget.

The General Assembly moved into a special session shortly after midnight on Saturday morning. Lawmakers in the House and Senate considered a number of bills that did not relate to the budget or proposed tax hikes.

Democratic and Republican leaders have been attempting in recent weeks to make a deal to balance the budget using tax hikes and spending cuts.

A proposal from Democrats to hike personal income tax rates and creating a new tax bracket for people who make more than $150,000 has been rebuffed by Republicans, who have said issued their own demands on implementing new fiscal restraints and changes to the state's prevailing wage policy.

Republicans have also said they do not want to eliminate itemized deductions, as currently proposed in the House bill enacting the personal income tax hikes.

Legislation to keep the government funded has been introduced in the event the impasse can't be cleared.

The budget process has also drawn rallies from firefighters and nonprofits who have been intensely opposed to the zeroing out of Grant-in-Aid funding, a move approved by members on the General Assembly's Joint Finance Committee that was used to balance the current budget proposal.

Warren Jones with the Delaware Volunteer Firefighter's Association, which helped organize a Friday night rally outside the statehouse attended by dozens of firefighters, said the lack of Grant-in-Aid funding and cuts to fire prevention money from the state would force fire companies to stretch their limited finances even further.

"No one's talked about cutting back on services but I'm sure that as time goes along some of them are going to take a look at that," he said.

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