Wednesday, June 24, 2009

Still Here Still Fighting

My apologies to followers who have not seen a post from me in a couple of days.

First, the President Pro Tempore of the Delaware Senate passed away on Tuesday. This is a great loss to the state; so many years of public service, so many lives touched.

Theoretically, the legislature, by Constitution, must have a budget by June 30th. As discussed in other posts, there are procedural tricks to get you beyond the deadline: A supplemental budget could be passed and then the legislature could roll into Special Session. The legislative day of June 30th could magically last longer than 24 hours.

At Leg Hall, people are thinking of these tricks because a budget seems far away. A major obstacle continues to be the pay cut for state employees. Although the Joint Finance Committee has recommended a 2.5% pay cut, the entire House Republican Caucus along with 9 Democrats are refusing to vote for a budget with pay cuts.

Furthermore, revenue bills are not having an easy time of it. The failure to pass revenue day after day forces the JFC to balance the budget on cuts. The budget mark up will supposedly be completed on Friday. This document will probably be rather frightening because of the deep program cuts it will contain.

The DSEA has lobbied for revenue and gave testimony today in the House Revenue and Finance Committee on several bills. In addition to our testimony, we entered documents into the public record. One set of documents showed the overall "tax burden" of Delaware compared with other states. Tax burden is the logical way for a state to assess the taxation of their citizens. Instead of looking at isolated taxes and comparing rates, all state and local taxes are combined and then a state is ranked against other states. Using this method, with "1" being the highest tax burden on citizens, Delaware is ranked 24th. Our neighbor New Jersey is ranked number one as the most tax burdened, Maryland is fourth in the nation and Pennsylvania is eleventh.

The ranking of tax burden became important because of a story in Leg Hall that income taxes cannot be raised or people will move away. Now, that is a ridiculous idea to begin with. After a percentage increase on income tax, does someone sell their home moving away from job, family, school, and community? No, that does not make sense and there is no evidence to support this ridiculous idea. Did I already say, "ridiculous idea".

Another document entered into the record by DSEA was a letter from Noble Prize winning economist Joseph Stiglitz. Stiglitz wrote Governor Patterson of New York about the prospect of cutting public services and pay for state workers verses raising taxes.

Stiglitz encouraged Patterson to raise taxes verses state cuts: "The reasoning is straightforward: in a recession, you want to raise (or not decrease) the level of total spending - by households, businesses and government- in the economy. That keeps people employed and buying things, and makes it more likely that businesses will want to invest to serve that consumer demand. Budget cuts reduce the level of total spending. Raising taxes on high income households also will reduce spending, but by less than the amount of the tax increase since those with plenty of income typically spend only a fraction of their income- and some of what they spend is spent on luxury goods made abroad.
By contrast, every dollar of state and local government spending enters the local economy right away, generating a greater economic impact. The impact is especially large when the money goes for salaries of teachers, policemen and firemen, doctors and nurses and others that provide vital services to our community."

One hundred and twenty New York economists signed onto this letter. The argument laid out by this brilliant economist is what DSEA has been trying to tell the Governor and legislature for months.

Representative Longhurst has sponsored HB157 a bill which guarantees that teachers on FMLA leave will return to their exact same teaching position. In order to gain votes needed to move the legislation, Longhurst changed the bill to only apply to Colonial School District. (This is the District that has purposefully denied FMLA teachers their previous positions.) Today, with the change, it passed the House and is now on track for Senate consideration.

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