Thursday, June 18, 2009

Budget Solutions Far Away

Good evening from Dover. The House just put up three revenue bills: A wine and beer tax, an alcohol licensing fee, and a cigarette tax. ("sin taxes")

All three bills went down to defeat in a Party line vote. In order to get the 3/5 for a revenue bill, the Democrats must hold their caucus and peel away one Republican. They were not able to do that tonight...three times, 16 Republicans voted no, and one voted present.

Before the vote, Minority Leader, Dick Cathcart spoke on the floor about why his caucus would not support the bills. He spoke about the need to see a holistic budget package to have a complete picture for his caucus to consider. He said they needed a package without pay cuts to state employees. Cathcart said he was not comfortable with passing revenue in a piecemeal fashion.

This situation is close to what we had the first part of the session when the Governor decided he wanted a particular gaming bill, his way, on his timetable, weather or not a deal was made with stake holders. The Governor eventually got a bill, but in some ways we are still paying for it.

The Governor will have to deal with the Republicans to get a budget. Fortunately, for state workers and education employees the Republicans seem to be saying "no pay cuts" as loudly as DSEA and our coalition partners.
In an earlier blog it was reported that there are $531 million in unpaid corporate taxes. This is true, but it is deceptive. This amount is taxes owed by corporations that no longer exist. If a company goes out of business Delaware keeps them on the books for their last year of taxes. If they ever come back into business and seek another incorporation, then Delaware collects from them. Last year, Delaware collected $14 million in this fashion. However, it is almost impossible to project annual revenue from this pool of owed taxes.

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