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It’s time for lawmakers to step up

June 22, 2017

Delaware's statecraft will come to fruition over the next several days. The state's budget for the fiscal year starting July 1 must be approved by June 30.

The process began in January when the administration floated its first budget proposal. Budget cuts and revenue hikes have been batted around incessantly as legislators push and pull to reach agreement. This year's magic figure is around $400 million. That's the gap between anticipated revenues in the coming fiscal year and planned expenditures. That gap has to be closed with spending cuts or revenue increases.

The fundamental problem is finding more revenues from within our state's borders. Our taxes are artificially low because more than 40 percent of our operating revenues come from outside our borders in the form of corporate franchise taxes, abandoned property and other arcane sources related to Delaware's deep corporate history and chancery court system. Adjustments in income tax brackets would move that balance to a more sustainable level.

Income taxes spread the burden across everyone. Democrats have proposed income tax measures to generate millions with little pain. Republicans have proposed adding taxes to digital accommodation providers such as Airbnb and VRBO. That's a fairness measure. Why should some enterprises such as hotels and motels pay accommodations taxes while others don't? All visitors benefit from our great parks and beaches. All should have skin in the game.

Legislators are also eyeing increases in alcohol and tobacco taxes, downward adjustments to gross receipts taxes, and giving Delaware Tech bonding authority with the debt serviced by a small property tax increase. That revenue is desperately needed to improve the school's crumbling infrastructure. The measure would provide lots of jobs for Sussex Countians in the process. Del Tech has proven itself effective, accountable, responsible and transparent, and it deserves the funds so it can continue to educate our job force.

Legislators have cut plenty from spending. Even with these measures, they will have to cut more to balance the budget. But 2017 is the year to get ourselves on a more sustainable revenue track so we can move forward for the benefit of future generations.

 

  • Cape Gazette editorials are considered and written by members of the Cape Gazette editorial board which includes Dennis Forney, publisher; Trish Vernon, editor; Dave Frederick, sports editor emeritus; Laura Ritter, news editor; Jen Ellingsworth, associate editor; and Nick Roth, sports editor.

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