The “New” Delaware Budget
As it stands right now, the working and middle classes just got royally screwed, again. Many people will look to the people who “run this state,” and no amount of media spin will change that; despite Carney’s recent post to try to do just that. At best, this was a quick fix by a group of Democrats in leadership who took expediency, and the ability to pass a budget quickly, over tackling the hard job of doing the right thing. Or, a group of Democrats in leadership who do not know how to hold back their cards from the DEGOP. However, what is clear is that the DEGOP are apparently masters at the game of chicken, because they got everything they wanted. Meanwhile, Progressives got taken for a ride and thrown out the passenger door. Carney is now saying, “The budget I signed tonight makes critical investments in education, healthcare, our environment, and in our correctional system.” However, the math is rather solid, and taking less money away from these areas is not the same as investing in them by any stretch of the basic principles of math.
Let’s review what just happened. Education was cut about $30 million. Senior services were cut about $7.5 million. Taxes increases mainly will take effect on the poor with increases in Sin Taxes. Grant in aid for nonprofits and public services was reduced across the board. Now they can say, we cut it 80% less than we would, and we cut $11 million less from schools, but gaking less money from the poor and the children of Delaware does not give them any better of a shake at life; it still hurts them, so don’t act like you are doing them a favor. Meanwhile, taxes for the richest of the rich in Delaware were cut across the board with the estate tax, and no increases in tax burden via the personal income tax.
Whose agenda does that sound like? Democratic or Republican? Republicans have been fighting for some of these cuts for decades. Meanwhile, Democrats have been trying to get upper brackets added since they realized it was a mistake to remove them back in the early 2000’s. We had that opportunity the other night, but some would rather fight for the ideologically perfect bill and now the opportunity is gone. Worse yet, it does not look to be coming back any time soon. We have talked till we’re blue in the face about why we need structural change in Delaware with regards to revenue, yet this is the budget that our leadership gave us. A few voted against it because it is a clear subjugation of the responsibility of leadership to make the changes that are needed to stop this from happening again in a year or two. Yet it passed with flying colors. This budget was handed down from leadership and Governor Carney, knowing full well that there are ZERO structural changes contained in it, and that it is simply, “kicking the can down the road.”
Let’s look at some particular parts of this Budget:
In an effort to make easy revenue, without raising taxes on any personal income brackets, the state legislature ruled to increase taxes on homeowners via the Real Estate Transfer Tax. This is the tax you pay, previously about 1.5% to the county and 2% to the state, calculated off the value of your home and is paid when you sell it. Now, with the passage of this budget, you will pay an extra 1% to the state only. This will not raise nearly as much revenue as the PIT bill they are trying to replace, and it will mainly hurt lower economic status families as they try to build equity so they can buy a better house in the future. When they sell their house they are going to pay a higher tax on the sale, which will only take more money away from their down payment on their next house. If realtors were so upset about the itemized deduction reduction in reference to homeowners, well this will without a doubt prevent new homeowners from getting into the market, or moving up in their housing situation. You know who it won’t hurt? The wealthy.
Additionally, as stated before, $30 million less of your state tax dollars will now go to the Public-School System, and they will not be able to raise your taxes with the one-time Match Tax that many of us thought was a terrible idea. Most school districts knew that this would be the death of any future referendums to be passed later down the road, and they are likely right, so they refused the opportunity.
The last part of the revenue package was Sin Taxes. To balance the budget, the House and Senate passed a group of Sin Taxes, on alcohol, tobacco and tobacco related products. The numbers for Alcohol are: The rate for beer increases by 2¢ per 12 ounce can. The rate for wine increases by approximately 3¢ per 5 ounce serving. The rate for spirits containing more than 25% ethyl alcohol by volume increases by 15¢ per 750 ml bottle.
For tobacco: Increases the tax on cigarettes from $1.60 to $2.10 per 20 cigarette pack. (2) Increases the tax on all tobacco products other than vapor products, moist snuff, and cigarettes from 15% of the wholesale price to 30% of the wholesale price. (3) Imposes a tax of 5 cents per fluid millimeter of vapor product. (4) Increases the tax on moist snuff from 54 cents per ounce to 92 cents per ounce.
So Now What?
Now, what comes next? Next year is an election year, and you could likely have any number of thoughts about that at this point. Some thoughts are likely to be: Burn it all down; primary every Democrat; kick them all out of office and start over; or just let the GOP take-over completely. Let me stop you right there. There is no doubt that some of these “Democrats” need to be primaried. However, even if you primary every Democrat, great then you are likely to either lose a lot of elections, or get some new crappy Democrats in their place who know how to raise money in-mass, or, in our opinion what’s even worse, have a full Republican takeover of the state. You think it’s bad with a close half Dem/half GOP breakdown in the House and Senate? Look what’s happening on the national level with a full GOP takeover. You think you can fight them all off? How is that going on the national level? Do some people need to be reminded who they work for, or removed from office? No doubt, but don’t be confused on who the enemy is here. The reason this budget is as bad as it is, is because the GOP have the upper hand in both houses of the legislature. We need ⅗ vote, a supermajority, to do the types of structural reforms that we have been fighting for, and we do not even have a united movement on the Left in DE. So, if we had that ⅗ in the general assembly, then we could completely blame the Dems, but that is not the reality of the situation in Dover. The actual reality in Dover is that the GOP knows how to play this game of spin, they know how to hold out, and they know how to get what they want. We do need a progressive take-over if you are asking me, but it has to be strategic, not birdshot. We need to take a hard look at the data from this session, and those in the past, and see who is really on our side and who is not. We may not agree with everyone all the time, but as we have said before, if you cannot stand with the people of Delaware then you need to look for a new job, and that means primaries. So, what’s another thought you are likely having? How can we expect change after we fought so hard, should I just give up? Absolutely not.
We have a short time to organize, and a lot of work to do. There are groups that are going to help, but they need your help first. We have the summer to work and to organize, and we expect everyone that is upset about this budget to get engaged and join efforts to make sure that next year this will not happen again. Within the next few days, we will have a meeting published and we hope that you will join us. We must unite if we want to create change. Now more than ever, we need to come together and Unite Delaware.