The state budgeting process begins in February, and groups like A Better Delawarefounded by Chris Kenny are concerned that it will once again force tax increases onto Delaware residents without improving their quality of life.
The budget increased by more than 130 million last year, yet Delaware still ranks 45th in the nation for fiscal health, based on the inability to pay its debts, according to a report from the nonprofit Truth in Accounting. State revenues only cover 96% of expenses, and that percentage continues to decline.
A budget that doesn’t cover normal expenditures year-to-year is not sustainable – that’s just common sense – and it’s time to take a hard look at a budgeting process that continues to fail Delawareans.
How the budget is made
The current budgeting process is not transparent, and doesn’t leave much room for voter input. It begins in January, when the Governor submits a recommended budget to the Joint Finance Committee.
The Governor holds a significant amount of power in the process, which results in a near-complete state budget before hearings even begin in February. The Joint Finance Committee then operates within strict limitations of that budget, with pre-allocated funds for schools, government agencies and more, and must find ways to fund any additional projects.
The easy solution for lawmakers is to take more hard-earned money from Delawareans – who are already owed billions in unpaid, unfunded pension debts – by increasing taxes.
Why it’s a problem
With a budgeting process that gives the Governor so much sway, residents need to be able to count on their leader to make decisions in their best interest. Delaware Governor John Carney approved large tax increases in his first year, including higher corporate franchise taxes, realty transfer taxes, alcohol taxes and cigarette taxes—totaling around $200 million annually.
It’s no surprise that Carney received a D-rating from the Cato Institute, a libertarian think tank based in Washington, D.C., on a recent report card of governors’ fiscal spending. When tax increases resulted in a surplus, Governor Carney allocated the money to new spending projects, instead of paying down the state’s unpaid debt, or returning the money to over-taxed residents.
Delaware’s money problems aren’t going anywhere, anytime soon. The state’s long-term debt liabilities are higher than the national average, and the unfunded pensions that have been promised to residents total $13.75 billion; more than triple the current total state operating budget. With rising unemployment rates, stagnant economic growth, and, according to policy nonprofit Tax Foundation, a poor business climate, now is not the time for our Governor to continue to spend, but instead to focus on genuinely improving the economic outlook in the state.
What needs to change
A Better Delaware, a pro-growth issue advocacy group, believes it’s time for Delaware lawmakers to actually address the ever-growing budget, instead of choosing to raise taxes.
By instituting a policy of data-based spending, lawmakers can use existing funds more efficiently, investing in programs that improve life for the state’s residents, provide more economic opportunity, and begin to pay down the state’s crushing debt.
It’s time for a real solution. Delawareans deserve responsible budgeting of their money, a budget that can weather an economic storm, and better choices from their Governor to ensure a brighter future for the state.