Recently, Gov. Jack Markell entered into discussion with legislative leaders on ways to generate more money for needed road construction, state park projects, dredging silted waterways and beach restoration.
According to one widely published report, the governor proposed a menu of options to raise as much as $80 million from tax and fee hikes, including a five-cents-per-gallon increase in the state fuel tax; higher motor vehicle document fees; and expanding the personal accommodations tax to include short-term, private rentals.
Tourism, the bulk of which is centered in and around our Sussex County resort communities, generates more than $1 billion in economic activity in Delaware annually. Increasing tolls, the state fuel tax, and the accommodations tax would directly impact the travel and lodging expenses of the people considering a trip to The First State.
Delaware already faces stiff competition from New Jersey, Maryland, Virginia and North Carolina’s Outer Banks for tourists interested in spending their leisure time near the water. Increasing their costs to come here will convince some of them to choose other options, resulting in lost dollars to the state and local economies.
Additionally, while most Delawareans would feel the impact of the higher taxes and fees, those negative consequences would be multiplied for businesses and nonprofit organizations.
I agree that we need improved maintenance of our inland navigable waterways, to ensure our beaches remain intact, to improve our state parks and finance needed transportation projects. Our tourism relies on the quality of all these assets, too. While I acknowledge these realities, I think hiking taxes and fees should be the last option, not the default position.
House Republicans recently offered a plan that would result in an additional $1 billion over seven years to fund transportation projects, without raising taxes. The proposal involves moving the annual operating budget for the Delaware Department of Transportation from a fund that is supposed to be dedicated to road and bridge construction back to the General Fund, which pays for all other state agencies. DelDOT’s funding was originally in the General Fund 20 years ago, but lawmakers in the early 1990s moved it to avoid some difficult budget choices they faced at the time.
The Republican proposal is not a panacea. It would require a multi-year commitment from the General Assembly to move DelDOT’s $230 million budget in equal annual installments, accounting for the additional expense at the start of each budget cycle. It would not be easy, but it is attainable.
Before the governor and state lawmakers ask for higher taxes and fees to fund the worthy goals they cited, both should make the commitment to a long-term course of action that will place the lightest burden possible on our citizens, businesses and nonprofits.
Rep. Steve Smyk
R-Milton-Lewes
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