Tax relief bill passes House

A bill to raise the standard deduction for state income taxes and also increase the earned income tax credit passed the House April 4 by a 39-0 vote with two absent.

House Bill 89, sponsored by Rep. Paul Baumbach, D-Newark, was filed after Gov. John Carney included the tax relief in his fiscal year 2024 budget. The bill approved by the House would increase the standard deduction to $5,700 for individuals and $11,400 for joint filers – a 75% increase.

Earlier this year, Secretary of Finance Rick Geisenberger said he expects 50,000 tax filers will switch to the standard deduction under the plan. Tax preparation would be simplified for 370,000 filers, officials said, and residents with an adjusted gross income below $75,000 would benefit most.

“This is going to make it easier for filers. We see a lot of simplification,” Geisenberger said, especially for those who take the federal standard deduction, but then itemize on their state returns. 

Under a proposed 7.5% increase in the earned income tax credit, another 20,000 tax filers are expected to fall off the tax rolls because their liability will go to zero.

Carney said the change will hopefully encourage more workers to return to full-time employment.

“So again, a mechanism to help workers there at the margin, moving around from one employer to another, and making it more beneficial to go to work,” Carney said.

HB 89 now heads to the Senate Executive Committee for consideration.

Medicaid coverage of abortions bill moves out of committee

A bill that would require health carriers to cover services related to the termination of pregnancy for low- and moderate-income women who have Medicaid healthcare benefits moved out of committee April 5 and awaits action in the House. 

Sponsored by House Majority Whip Rep. Melissa Minor Brown, D-New Castle, the bill aims to protect reproductive rights for women. Coverage provided would not be subject to any deductible, coinsurance, copayment or any other cost-sharing requirement.

“We made a promise that we would continue to strengthen reproductive health equity and remove barriers to care. With House Bill 110, we are delivering on that promise,” she said.

Rep. Jeff Hilovsky, R-Millsboro, said he has received 500 emails from people opposed to paying for this service.

“Is this a right that the public is willing to pay for?” he asked. 

The bill does allow for an exclusion for a religious employer “if the coverage requirement conflicts with the religious organization’s bona fide religious beliefs and practices. If such employer obtains an exclusion, it must provide its employees reasonable and timely notice of the exclusion.”

Rep. Bryan Shupe, R-Milford, said he also has received calls from constituents concerned with the bill. 

“This is such a broad slate to be funded through the state and mandated through private healthcare,” he said.

Pam Price, representing Highmark Blue Cross Blue Shield of Delaware, which provides insurance for state employees, asked for clarification of the term services in the bill.

She also said cutting out the cost-sharing requirement for abortion could be perceived as unfair and inequitable to members who have to pay for services for other health issues.

Minor Brown said a fiscal note will be available soon, since the bill will go through appropriations.