CRI News

(Originally published on March 1, 2019 by Delaware Business Now.  See link below to be directed to the originally article or to contact the publisher, Doug Rainey.)

Good afternoon,

Constituents spoke out and a plan to provide a reliable source of funds for maintenance and related expenses at Delaware Technical and Community wasdropped like a hot rock.

In the past few years, opposition to property and gas tax proposals have ended efforts to deal with polluted waterways and infrastructure.

Delaware Tech is a key player in efforts to adapt to a new economic reality by providing an option that does not lead to massive amounts of student debt. The institution also offersspecialized training and instruction for workers in need of new skills.

The college should have received a reliable source of funding from the onset of its operations. The institution was also caught in the nationwide trend of legislatures here and elsewhere cutting back on the percentage of funding that supports state colleges and universities.

It may be too late to stick property taxpayers with the backlog ofprojects that were pushed back during periods when state revenues or bonding capacity was limited. 

A number of forces are at work here. The biggest may be the combination of the state’s high personal income taxes and the pride residents take in low gas and property taxes, not to mention thezero sales tax.

Legislators and even some business leaders in an unguarded momentwill admit that the state’s revenue base rests on a two-legged stool of corporate fees and income taxes.

It leads to revenuesbeing subject to wide swings that lead to spending cuts followed by catch-up spending with little incentive to set aside surplus revenues for bad times. Add in health care and pension costs for an army of state workersand the result is an unsustainable situation.

Another problem is accountability. The state’s heavy hand in areas such as education and social services leads to voters being detached from decision-making that in other jurisdictions takes place at the local level.

It would be a good time to take a look at the entire issue of taxation and public services, with an eye toward making more decisions at a level that is more accessible to voters.

To be avoided is the usual step of blue-ribbon commissions that are typically comprised of insiders content with the status quo. We saw that movie before with a panel on school district consolidation.

Also required is a hardlook into the future of the state’s dependence on corporate fees in a global economy that could slashrevenues in a Beijing minute.

Best practices from other states and counties should be weighed with current methods that were designed for a state with a half a million people, not 950,000.

Coupled with a long-running public outreach effort the state might have a chance to deal with issues that are too often addressedwith kneejerk social justice, not invented here or anti-tax responses.

Finally, if this newsletter was passed along and you like what you have read, sign up here to get your own copy. If you have any commentspro or con, or news tips simply hit return attach the item or type away. – Doug Rainey, publisher.  





Subscribe to receive CRI Policy analysis, updates, and event notifications!