Small Town News
State GOP offers budget plan
Lawmakers want lower taxes, changes at DelDOT
Gov. Jack Markell's plan to use the state's budget surplus to stimulate job growth in Delaware has produced a backlash among Republican leaders in the state House of Representatives. House Minority Leader Greg Lavelle, R-Sharpley, and House Minority Whip Gerald Hocker, R-Ocean View, have released a counter plan for the state's $320 million surplus.
"The governor says he wants to limit budget growth but has $54 million built into his proposed budget to give all state workers an extra paycheck," Lavelle said in a press release. "The governor says he wants to relieve the burden on business and working families but then proposes to give them only the most modest of tax cuts."
Hocker and Lavelle's four-part plan, released May 12, would end tax hikes, eliminate an extra paycheck for state employees, change the way road and transportation projects are funded and preserve Delaware's open spaces.
House Republicans would retire tax hikes that were enacted in June 2009 to close the budget deficit. This would end an 8 percent increase in the gross receipts tax, cut corporate franchise tax and reduce personal income tax from 6.95 percent to 5.95 percent. Under Markell's plan, personal income tax would dip from 6.95 percent to 6.75 percent.
Part of Markell's budget includes using $54 million for a 27th paycheck for state employees. The majority of state employees have a biweekly pay period, which accounts for 364 days in a 365-day calendar year. Once every 11 to 12 years, state employees will have 27 paychecks instead of 26. Fiscal year 2012 is scheduled to include a 27th paycheck for state employees, totaling $54 million. House Republicans propose keeping the extra $54 million and adding it to the budget surplus.
Rep. Ruth Briggs King, R-Georgetown, said in a press release this is not shortchanging state employees. "The occurrence of a 27th pay period is a well-known quirk of the biweekly pay system," she said. "Instead of giving these salaried workers an additional paycheck, divide their annual salary by 27 instead of 26. The biweekly check an employee receives would be
modestly reduced, but they would still receive their full annual salary over the course of the year," Briggs King said.
Brian Selander, spokesman for Gov. Jack Markell, said the Republican's 27th pay proposal is actually a pay cut for state police and other employees who have already earned the 27th paycheck. Selander said 11 years ago, the state began using a biweekly pay system; that is 11 days state employees have worked and not yet been paid for. "It's now time to make up that extra pay," Selander said.
Markell's plan includes $40 million to improve transportation in Delaware. House Republicans say the Transportation Trust Fund is expected to see a $169 million shortfall for fiscal year 2012. House Republicans also say a long-term structural imbalance in the fund will lead to delayed and cancelled transportation projects.
Republicans propose moving Delaware Department of Transportation's operational expenses to the General Fund over a five-year period, opening up more than enough money in the Transportation Trust Fund to make up for the $169 million shortfall.
Like Markell, House Republicans propose investments in infrastructure and open spaces. Markell's plan would dedicate $35 million towards maintaining state assets, such as historic properties, state buildings and parks. Markell would also use $10 million to preserve Delaware's open spaces to maintain Delaware's high quality of life.
House Republicans propose $20 million to preserve open spaces and farmland. "The price of land and development rights are depressed, and taxpayers have an opportunity to get more bang for their buck than they have had at any period in the last decade," Hocker said.
The four-part plan also includes putting $100 million towards the Bond Bill and $80 million towards the following budget to be used for environmental and safety needs in infrastructure.
"This plan does everything the governor claims he wants done," Lavelle said. "It does not overly rely on one-time money, it reduces taxes and it spurs economic development and creates jobs."
Markell says his three-part plan, released in three installments on May 4, 5 and 6, would use the budget surplus to enhance employment across
Delaware. Markell's Building Delaware's Future Now plan focuses on investments, tax cuts and improving education. "The governor's plan is a responsible approach to putting people back to work and cutting taxes," Se-lander said. Markell seeks to limit
Delaware's dependence on unreliable revenue sources, such as abandoned property, and cap the amount of money from these sources that can be used to fund the operating budget. The governor also proposes limiting expenditures, reducing taxes and paying down the state's debt.
"They've implemented a number of our proposals into theirs," Selander said.
He said both proposals include tax cuts and preserving infrastructure, open spaces and farmland.
The Republican's plan does not support programs to put people back to work and help the job market longterm, Selander said. He added, the governor's plan is reasonable, responsible, and gives tax cuts to the hardest hit by the recession.
To see both proposals, visit delaware.gov.
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