The state of Delaware is in a do or die game of chicken when it comes to the budget, and it’s far worse than what most of us realize. Delaware Dem, a blogger from Blue Delaware, covers this rather well in his recent post, “Time To Shut It Down.” We have relied on LLC fees, corporate taxes, lower and middle-class personal income taxes, and casino revenue to make up our budget. All so we can keep a low top income tax bracket to avoid “over taxing” the wealthy, keep our property taxes low to attract residents, and maintain a poorly managed “Strategic Fund” that we can use to dole out millions to highly profitable mega-corporations. The problem with all of this is that it has created the very economic turmoil that we have now found ourselves in. So, what’s the solution?
Obviously, that depends on who you ask, and no matter who answers you it’s going to be a multifaceted solution. The left loves to say that we cannot cut our way to prosperity, and the right loves to rebut that we also cannot tax our way to prosperity. Well, guess what, they are both correct. Once again though, we should take a look around and examine what most other states are doing. After doing that we can easily see that the majority of states in the nation rely on personal income tax as the most stable source of revenue, and that’s because it’s directly tied in and correlated with whatever the current economic situation is at any given time. Most on the left will agree up to this point, where it all goes to pot is how we alter the codes to increase revenue. There are several bills already drafted and ready to be voted on, or soon to be filed. However, this should be a logical decision based on simple math and economics.
If you want to assure that the revenue stream remains stable, even in times of national and statewide economic disruptions, you have to rely on those who have the most stable source of income. After you do the math, and review the economy over the course of recent history in our state, and even more so nationally, it is rather clear that the upper class is impacted to a far smaller degree in times of economic turbulence, and when impacted they recover much faster. That is partially due to the fact that they can invest and save money to a larger degree than those in the lower and middle-middle class, and because they tend to rely on jobs and industries that are more likely to receive aid from the government. According to the Pew Research Center, from 2009-2011, during the recovery from the last recession, those in the top 7% saw an increase in wealth by about 28%, whereas the net worth of those in the remainder of the economy, 93% of earners, saw a decline of 4% (1). This is the evidence that many on the left cite when they explain why we need to add additional tax brackets to our state tax code. Relying on the lower and middle class with regard to revenue generated from personal income taxes is not a safe or logical thing to do. In the long term, we could land ourselves in a much sharper economic spiral if we do not look towards stable revenue streams. Other states around us have figured that out, and many have added additional brackets to ensure that no matter what the national economy is, they will have the funding they need to keep their lights on. New Jersey has a top bracket of $500k; New York $1 million; Maryland $250k; California $1 million; Arizona $152k; Connecticut $500k; Maine $200k, and the list keeps on going (2). Now, what the rates are for each state at these brackets varies, but they all have them because they know that this is where the stability is during economic crises.
Still, we said that it takes a balanced approach, so what about keeping the government operating efficiently and responsibly? What does that look like? Well, that depends again on who you ask. On the face of this issue, one would assume that this means that we keep our costs low by ensuring that departments are only staffed as much as needed to operate smoothly and efficiently; making sure we do not have duplicating efforts in the way of services and programs for our citizens; making sure that we are not investing our money irresponsibly; being sure to watch out for fraud or abuse of government provided services; and to make sure that we only add to our tax burden as a last resort when all these other things have been done and the need is still there for more revenue. However, that is not what is being done in Delaware. The DEGOP is not asking for an efficient and fiscally responsible government. They are asking us to revert to an individualistic and Darwinian form of government. They are asking that we cut services for the poor, and taxes for the wealthy. If we have waste, let’s bring it to light, and get rid of it. If there are duplicate programs or programs that have expired and should be reviewed by the sunset committee (which is staffed with Republicans and Democrats alike and has the sole purpose of cutting down on wasteful spending and redundancies in the government), then let’s work together and save the state some money.
Yet, this is not what is being asked of the public to accept in return for their votes for the additional revenue proposals. They are holding the budget hostage to pass more corporate friendly and chamber of commerce backed initiatives that will do nothing to help solve the state’s budget problems, and instead, do everything to help secure their future campaign donations. They don’t want to cut down on waste, they want to cut down on services for the poor, for the elderly, for our children and grandchildren, and for the working families of Delaware. How about instead of cutting services for our families, we cut the handouts to corporations in Delaware? How about we start making cuts to the failed investments that have cost our state millions of dollars a year with little to no returns for the tax paying families of Delaware? Before we make any cuts to services that our citizens rely on to survive, we need to cut down on the corporate welfare that is costing our state millions upon millions of dollars annually with no benefit to the average Delawarean (3). Why don’t we hear any calls from the GOP to cut these programs? Why isn’t the Chamber of Commerce pressuring them to cut costs by cutting wasteful investments in failing industries? How is it that we always have the money to give away to corporate America, but never the money to provide aid to seniors for their medications, or for the schools that our children attend, or the health care that the elderly and working poor rely on to survive?
Let’s be real, the only cuts that the Delaware GOP want are tax cuts for the rich, service cuts for the poor, wage cuts for our workers and unions, and education cuts for our children; and they are more than happy to play a drawn-out game of chicken with our budget in order to get them. If you live in a Republican-controlled House or Senate district, call your Rep and/or Senator today, and tell them to stop the games and come to the table with serious ideas on how we can solve this budget now and for the future. Demand that they vote yes for higher tax brackets, that they do their job to ensure that our revenue remains stable. Tell them you will not stand for any cuts for our workers, our working poor and elderly, and certainly not for our children. Remind them that we elect them to work for us, not the Chamber of Commerce, not corporate interests, not their highest donors; us. Remind them that if they do not want to do that job, then next year we will find someone who will.