Rethinking Taxes, Spending, and Education in Delaware
By: Jane Brady, Chair, A Better Delaware
There has been a lot of coverage and comment recently on the significant increases in property and school taxes. The significance of the increase was largely due to an irresponsible delay in property reassessment for over 40 years, resulting in discrepancies and unfairness in the amounts paid by property owners.
Assessments are taxes, and we have a lot of them in Delaware. Our legislature’s appetite is voracious. The growth in spending, and the increase in the rate of growth, when looked at over the span of the last 25 years, is alarming. The numbers below are from state government sources.
It was in 2001 when Delaware’s budget first approximated $1 billion. By 2009, that number had grown to $3.63 billion. In 2020, it was $4.4 billion, and in 2025, it is $6.5 billion. The pace at which we are spending is increasing.
Now, maybe you don’t mind paying taxes. After all, if the funds are helping people who need it, if the money is being spent efficiently and effectively, then there is reason to support the expenditures. I wish we could say it was so.
This year, in order to ease the burden of managing the spending of your money, the State has decided to just give every student a free lunch, not limiting that service to those who have a need. There is so much inaccuracy in managing the money in the unemployment program, they cannot accurately audit the funds to determine if the people we are paying truly qualify and if we are paying them the right amount. And, in education, students continue to test in the bottom of the nation.
The disappointing results in student performance continue despite the fact that spending on education has increased significantly. We are in the top tier of all states in spending on education. In fact, fully one third of our state budget is spent on public education. But we are 46th in student performance. Not effective spending at all.
Where does this money for our budget come from? On average, over the years, about 40% comes from individual income taxes, 40% from licenses, 15% from gross receipts taxes and the balance from miscellaneous sources. Our personal income tax rate is in the top 10 in the nation, and our corporate tax rate is as well.
If more spending does not improve our education system, do our tax and spending policies make our economy better? It does not appear so. According to USA Facts, Delaware’s annualized Gross Domestic Product (GDP) growth was 1.7% over 5 years, placing Delaware 46th out of our 50 states. And, according to the US Bureau of Economic Analysis, Delaware’s economy grew 0% in the first quarter of 2025.
What should be done to improve results and lower the tax burden on Delaware citizens? First, eliminate the gross receipts tax. After all, ultimately you pay it in the prices you pay for the items you buy. Gross receipts taxes are a tax on the sale of items in grocery and hardware stores, mom and pop bakeries and taco stands. It is a double tax that hits small business especially hard, because it taxes the money made on sales before the business owner takes out supplies, wages, and rent. Then, after the owner takes home a little money, that is taxed as income. Most states have eliminated this type of tax. Delaware should too.
We should demand that our education system start producing the product it promises – learning. Delaware should adopt the policy that Mississippi and other states have and require third graders be able to read at grade level before being passed to fourth grade. Mississippi, which had been at the bottom of the rankings for 30 years, is now ranked 21 among states for student performance. The difference in only six years? Their students can read. Every student, teacher, and parent was invested in a result that changed students’ lives – getting them to read well enough to be promoted. Now they can read, those students can learn!! We are graduating students in Delaware that truly cannot read. It is not fair to them, their families or the rest of us that we are failing them so badly.
And we should work to encourage a vigorous business climate in Delaware. Bring in good businesses with good paying jobs. Know that it will be difficult until we improve our education results, as the people who bring their companies to Delaware want their children to be able to learn. We should adopt tax policies that encourage young entrepreneurs to open and grow businesses and offer expanded learning and training opportunities for the trades and technology.
Delaware has been considered a leader since this country’s inception. The truth is tarnished, but the spark is not expired. We all have reason to be invested in Delaware’s success in the future – for our families and those who will come after us. Let us be committed – now – to A Better Delaware.
Jane Brady serves as Chair of A Better Delaware. She previously served as Attorney General of Delaware and as a Judge of the Delaware Superior Court.