Do not be fooled by the Cape Gazette’s recent editorial about low taxes in Delaware, or Don Flood’s recent column about low state taxes. The state does not need more revenue; it needs better control and focus on what it spends. Higher taxes and more government involvement are not the answer.
Delaware has the fourth highest state spending per citizen in the country. Revenue is not the problem. The problem is out-of-control spending by the Democrats who have been in the majority and in control of the state for far too long: over 22 years of Democrats as governor.
Delaware spent $9,873 per person in 2013 while the national average for state spending was $5,344.
Source: http://kff.org/other/ state-indicator/per-capita-statespending/ There are only three state governments in the entire country that spend more money per citizen than Delaware.
People from surrounding states seem to be flooding to Delaware due primarily to high property taxes in neighboring states, and low property taxes in Delaware. However, in 2014, state spending per citizen in our three neighboring states ranged from $5,710 to $6,684. All have significantly lower state spending. The highest, Pennsylvania, is 67.7 percent (about two thirds) of what Delaware spends.
We are blessed with substantial revenue from being the incorporation capital, and the franchise taxes and escheated property that have flowed from that position. That used to enable Delaware to have great roads, great education, low taxes, and other benefits that made it a very desirable place to live and a reasonably good place to do business.
That has all changed, and we need to determine what to do to regain a position of prominence. Republican state Sen. Greg Lavelle’s recently proposed legislation to have right-to-work zones and a gross receipts tax break for new businesses coming to the state is arguably a good start, but the Democrats will not even allow the proposed legislation to come out of committee.
The number of manufacturing jobs in Delaware has declined by 25 percent in the past 10 years, but the Democrats in control are apparently too beholden to the unions that contribute to their campaigns to care about jobs for their constituents. So much for the Democratic Party being the party for the workers. When companies are searching for a site to build a new manufacturing facility one of the first things that they seem to do is eliminate states that don’t have right-to-work laws, which leaves Delaware out of consideration. Do we want to protect unions, or do we want the higher-paying jobs? There is evidence that right-towork laws, and the economic growth that they promote, have actually increased union jobs in some states.
Delaware is the only state that saw a decline in wages from 2009 to 2013, as the recent article in The Economist pointed out. Delaware also has the distinction of getting the least return on its tax payments to the federal government of any state in the U.S. While Delawareans paid $20,062 in federal taxes, we received only $6,560 in federal spending in return. However, what we desperately need are good jobs for our citizens so that we can have a thriving economy.
The Cape Region’s primary employment seems to be retail, restaurant and service jobs serving tourists and retirees, which do not provide a decent liveable wage. The availability of better jobs helps to drive up wages as employers compete for good employees. Most workers in our area have merely a subsistence income.
Popular Democratic Party proposals are not the answer. Forcing higher wages by raising the minimum wage is artificial and also has some adverse effects, and raising the gasoline tax is regressive. It takes a higher percentage of income in the form of a gasoline tax from lower income earners than those with higher incomes.
The Cape area and Sussex County are moving in the right direction by electing Republicans, but we need more Republicans elected so that they can actually have a say in state government and their ideas can be heard and taken into account. As a minority, they can be ignored by the Democrats. A healthy debate would produce better results than the Democratic leadership dictating policy. Republicans seem to have a better understanding of the private sector and how to create jobs.
Each new private-sector job improves the economy, generating something citizens want to purchase and tax revenue to support government. Additional government employees are a drag on the economy, an expense that must controlled because it becomes a burden that we all must carry. I do not think it is a coincidence that Delaware was ranked 15th in the number of state and local employees per capita with 259 government employees per 10,000 residents as of 2012. That translates to one state or local employee for every 38 residents of Delaware.
With an average state employee salary of $51,773 in 2012, for 38 residents every man, woman and child would have to pay $1,361 to fund that salary. There is a cost for government employees, and that would be $5,445 for a family of four. That is $5,445 that a head of household earning the average private sector salary of $51,759 has to pay toward the state employee, whose benefit package is usually worth far more than the private sector employee receives.
I think that the solution is good jobs in the private sector: concentrating on bringing good jobs to our state, and particularly to Sussex County. The debate should be about how to do that and what is preventing it from happening. Bloated state government, excessive regulation, high rates for electricity, protections for unions, an environment that may seem unfriendly to business, and perhaps a lack of properly trained potential employees are all candidates for consideration as impediments to economic growth.
We should insist that both political parties concentrate on working to improve the state economy for the benefit of all Delawareans. Private-sector economic activity provides the funding for the government.
Jim Reed
Rehoboth Beach
-
A letter to the editor expresses a reader's opinion and, as such, is not reflective of the editorial opinions of this newspaper.
To submit a letter to the editor for publishing, send an email to viewpoints@capegazette.com. All letters are considered at the discretion of the newsroom and published as space allows. Due to the large volume of submissions, we cannot acknowledge receipt of each submission. Letters must include a phone number and address for verification. Keep letters to 400 words or fewer. We reserve the right to edit for content or length. Letters should be responsive to issues addressed in the Cape Gazette rather than content from other publications or media. Letters should focus on local issues, not national topics or personalities. Only one letter per author will be published every 30 days regarding a particular topic. Authors may submit a second letter within that time period if it pertains to a different issue. Letters may not be critical of personalities or specific businesses. Criticism of public figures is permissible. Endorsement letters for political candidates are no longer accepted. Letters must be the author’s original work, and may not be generated by artificial intelligence tools. Templates, form letters and letters containing language similar to other submissions will not be published.
