Small Town News

Governor proposes job creation plan

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State to use surplus to ease recession

Gov. Jack Markell wants to use a $320 million budget surplus to enhance employment across Delaware. On May 6, Markell announced the final proposal in a $135 million plan to use the surplus for job creation.

Building Delaware's Future Now is a three-part plan to reduce unemployment. The plan would give the governor and General Assembly leeway to invest part of the funds, cut taxes and improve education. "Our top priority remains getting Delawareans back to work who need jobs and creating more economic opportunity for people who are already working," Markell said in a press release.

Building Delaware's Future

Now plan has three goals. First, to limit Delaware's dependence on unreliable revenue sources, such as abandoned property, by capping the amount 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.

$135 million for job creation

The first part of the plan, announced May 4, would establish a $135 million fund designed to help Markell and legislators make calculated investments that would stimulate job creation and retention. The fund would give $40 million to improve state infrastructure to attract new businesses, $40 million to improve transportation so more Delawareans can get to work and $35 million toward maintaining state assets, such as historic properties, state buildings and parks.

Markell also proposed spending $10 million on housing for low-income families, and $10 million for preserving Delaware's open spaces to maintain a high quality of life.

Rep. Ruth Briggs King, R-Georgetown, said in an email she agrees the state needs to improve

infrastructure and transportation systems. "However, before we provide any more funds to Del-DOT (Delaware Department of Transportation), we need to address the oversight of DelDOT and ensure our funding is working for projects," Briggs King said. She suggests taking administrative costs out of the state's Transportation Trust Fund and putting those costs into the General Fund.

Cut taxes, reduce debt

The second part of Markell's plan would cut taxes in areas he says are stifling job creation. "We have a chance to focus these cuts in a way that could help Delaware attract businesses large and small to locate here and put people to work," Markell said.

Markell proposed reducing the gross receipts taxes by $6 million. The reduction would help small businesses and manufacturers by increasing the monthly exclusion by 25 percent, or $20,000. The tax reduction would also take 330 businesses off the gross receipts tax roll.

Markell also wants to put $20 million towards the state debt to decrease the debt burden on taxpayers.

Senate Minority Leader Gary Simpson, R-Milford, said the tax reductions would surely create more jobs in Delaware. "Overall, the program for the surplus is excellent," he said.

Simpson said he would like to see more of the surplus go toward debt reduction, especially if

the budget surplus continues to grow. "I think I would double it. Where I would take it from, I'm not exactly sure," he said.

An $8.5 million tax cut is aimed at creating financial services jobs, giving that industry a jolt. According to Markell, about 25,000 Delaware residents work in the financial services industry. The governor's proposal would slightly lower bank franchise taxes by providing an alternative method for computing the taxes and provide a new tax credit for employers who create financial services jobs.

Part two of the proposal would also give an enhanced tax credit to banks that bring 200 or more new jobs to Delaware. Banks would receive a $1,250 credit for 10 years for each new employee, totaling $12,500 per job over 10 years.

The proposal would invest $9.5 million in a program to promote energy efficiency and reduce the cost of long-term energy savings to business owners. Public utilities tax would decrease from 5 percent to 4.25 percent for gas and electric.

In the fall, interest payments on some federal loans are scheduled to begin, which would cause higher assessments on businesses. Under this proposal, interest payments would be made through an unemployment trust fund. The $37 million fund would help employers avoid higher employment taxes.

The second prong of Markell's proposal would also use $6.8 million in state funds to reduce personal income tax from 6.95 percent to 6.75 percent for all taxpayers.

Sen. George Bunting, D-Bethany Beach, runs a branch of State Farm Insurance in Re-hoboth Beach. Bunting said with some tweaking, he believes Markell's plan will be a success. Specifically, he said, lowering public utilities tax, lowering overall debt and establishing an unemployment trust fund are all excellent ways to stimulate job creation. "He's a tremendous thinker," Bunting said of Markell. "He is the man for the time."

Invest in education

Markell recommends investing in early childhood and higher education to help Delawareans find jobs and improve their chances for employment in the future.

The proposal to improve higher education includes enhancing facilities at Delaware State University in Dover, University of Delaware in Newark and Delaware Technical & Community College campuses across the state. "We're going to make investments that put people to work building new research and training facilities at our colleges so they can graduate more students with the strong science backgrounds the fastest-growing industries demand," Markell said.

Under the proposal, the government would invest in a $10 million optics research lab at Delaware State University.

A second $10 million investment would benefit multiple research labs at University of Delaware. Delaware Technical & Community College would receive $10 million in state funds to initiate an aviation power plant program in Georgetown, its dental hygiene program in Wilmington and its nursing and science

programs in Dover and Stanton.

The proposal to improve early education in the state includes a $22 million investment to encourage quality teachers and increase wages for childcare and education workers.

Of the $22 million, $13 million would be dedicated to higher pay, grants and technical assistance for teachers who participate in Delaware Stars for Early Success.

The program rates educators and rewards those who obtain higher education degrees.

"We're going to invest in early^ childhood education so that more kids can show up their first day at public schools ready and able to succeed," Markell said.

Simpson is assistant director of university relations for University of Delaware.

"Anytime you can invest in education, be it K-12 or higher education, it's a good thing to do," Simpson said.

For more information on MarkelFs Building Delaware's Future Now jobs plan, visit gov-ernor.delaware.gov.





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