The best budget fix? Less spending.
It’s no surprise that Delaware lawmakers continue to promote new taxes and tax increases to cover their bloated spending. This has become the new norm and is likely to continue as healthcare spending balloons, new programs are established, and administrative costs climb.
Delaware spends more per capita than it’s neighboring states Pennsylvania, Maryland, and even New York. In fact, Delaware’s state and local government expenditures are higher than 43 other states, but why?
Our health care funding is out of control but has yet to proven to be worth it, with poor health outcomes and limited access to care. Our growing education budget has not improved the landscape for our students either.
No wonder our taxpayer return on investment (ROI) is 44th in the nation: Delawareans just aren’t getting any bang for their buck.
Despite this, we keep taxing and spending. The spend-then-tax structure that has been utilized through recent sessions has been to the detriment of many Delawareans, who cannot afford to pay more taxes, especially during the pandemic.
This spend-then-tax structure also impacts the businesses that provide jobs to Delaware citizens. Since the 2007 recession, state lawmakers have raised every Delaware business tax, many of them multiple times. These tax increases have been passed on to the people in higher prices and lower gains in wages. And it’s about to happen again.
At some point, taxpayers can’t afford to dole out their hard-earned money to cover an irresponsible spending structure. Instead of looking for new and pervasive ways to fund the budget, lawmakers should consider re-evaluating certain costs, programs, and regulations in order to reduce our spending.
This system isn’t just a burden, it’s unsustainable.
Delaware lawmakers could look to Illinois, who is looking to finally address their budget crisis. The state is considering adopting pension reform, right-sizing its union contracts and focusing education spending on classrooms instead of on administrative bloat.
If Illinois had implemented this plan just four years ago, the spending reforms would have saved a total of $12.6 billion, the bill backlog would be $4 billion lower, and could have enabled cutting the income tax. Illinois lawmakers could issue the tax cut as early as fiscal year 2024, or use surpluses to add to the state’s rainy day fund.
Delaware too could benefit from these exact measures.
There have been measures proposed in recent years to address this that continue to stall. The bipartisan Governmental Accountability Act would require agency evaluations for budget proposals and would promote more efficiency state spending. The constitutional amendment to codify our current budget stabilization measures would ensure that future Governors are also mindful of state spending by not allocating one hundred percent of the budget.
Implementing these measures that have already been drafted and proposed would help set up the First State for a better future, just as Illinois is attempting to do.
We can never escape this game of playing catch-up with our current model. Taxpayers will continue to carry the burden of the state as spending grows and unfunded debts climb. This is far from the path we should take to ensure a better future for our residents, families, and businesses.