Cape legislators: Too early to react to budget talks

One week into Delaware’s 148th General Assembly, Cape Region legislators say they know the state is facing serious financial issues, but the reality is, they said, with the transition from one governor to the next still fresh, it’s too early in the session to really begin figuring out how those issues are going to be addressed.

“There’s just a different mindset,” Rep. Steve Smyk, R-Milton, said Jan. 16.

Gov. John Carney was sworn in as Delaware’s 74th governor Jan. 17.

Less than a week before, Jan. 12, former-Gov. Jack Markell introduced a budget for fiscal year 2018 of $4.13 billion that closes a projected shortfall of $350 million by, among other things, increasing the realty transfer tax from 3 percent to 4 percent and increasing the state’s share of the tax; eliminating a tax subsidy for seniors; increasing the amount of transportation costs school districts have to pay for; eliminating money for farmland and open space preservation; agency budget reductions of more than $55 million; and changing state employee healthcare options for anyone hired on or after Jan. 1, 2008.

And while it’s Markell’s budget everyone has looked at, and reacted too, it will be Carney’s job to shepherd it through the process, having it ready for when session ends June 30.

It’s important to understand Markell was required to submit a proposed budget, said Speaker of the House Rep. Pete Schwartzkopf, D-Rehoboth. “It’s easy to propose things. The hard part is trying to make it happen,” he said.

Sen. Ernie Lopez, R-Lewes, said it’s far too early to really delve into Markell’s proposed budget. “He’s not governor anymore,” he said. “I’m not expecting just a tweaking from Carney. I’m expecting a whole new proposed budget.”

Schwartzkopf said in addition to a new governor, there’s going to be a special election in Lt. Gov. Bethany Hall-Long’s former senatorial district in New Castle County. If the Republican candidate wins that seat, the GOP will have control of the Senate, he said.

“Things are pretty much in flux until the results of that special election,” said Schwartzkopf, who still enjoys a super majority in the House.

Senior subsidy at risk

The Cape Region districts, which include Dewey, Rehoboth, Lewes and Milton, are some of the fastest growing in the state, and because many new residents are retirees from other states, the average age of residents is among the highest in Delaware. Not surprisingly, a proposal to eliminate a subsidy allowing property owners 65 and over to deduct up to $500 from their annual school tax bill didn’t sit well with the area’s legislators. The estimated cost savings is a little more than $25 million.

Schwarztkopf said he’d be in favor of implementing some kind of means testing to create a threshold for the subsidy. He said there are many cases where the subsidy does help older constituents who are living on a fixed income, but, he continued, there are just as many cases when people have retired here because of low taxes, and now they’re taking advantage of the subsidy also.

“It’s not being used the way it was intended,” he said. “They just don’t want to pay taxes, when they’re really, really low compared to where they’ve moved from in the first place.”

Smyk said he’d hate to see the subsidy go, suggesting a possible increase in the eligibility age.

“There’s still going to be a need for this,” he said.

Lopez said he didn’t see the proposal going anywhere.

Minority legislators: Wait and see

This is the first time Smyk and Lopez have been through a change in governors as elected officials. Smyk said he doesn’t know Carney as well as he knew Markell, but he said he had a good relationship with Markell, and he hopes to have the same with Carney. He said he’s been impressed with how Carney has taken the reins since winning the election.

“Lets see, when he gets going, what he does,” said Smyk of Carney.

Lopez said he’s looking forward to working with the new governor. Lopez said Carney has reached out to him on a couple of different issues, and that’s a good sign. It shows a willingness to work with a junior senator from the minority party, said Lopez.

“Solving problems is what matters to me,” he said.

This is the third gubernatorial transition Schwartzkopf has been a part of. When he first took office in 2002, Ruth Ann Minner was governor.

“It just makes me feel old,” he said, laughing.