The News Journal | by Scott Gross
A proposal to change how the Delaware General Assembly allocates tax dollars has died without a single vote being cast – marking another defeat for Gov. John Carney at the hands of his fellow Democrats.
A Constitutional amendment that would force lawmakers to limit spending in good years and save that extra revenue for tight years will not be called up for a vote before the end of the legislative session on Saturday, despite being co-sponsored by half of the state’s lawmakers.
“That’s unfortunate if that is what the outcome is,” said Carney, who publicly championed the measure. “I’ve tried to explain to everybody that it’s a better way to manage state finances and taxpayer dollars responsibly.”
Multiple sources told the News Journal the decision to hold the bill was made by Democratic leadership in both chambers.
In perhaps the clearest sign the “budget smoothing” proposal was on the ropes, House Majority Leader Valerie Longhurst, D-Bear, removed her name from the list of sponsors earlier this week.
“We want to take a step back and look at it a little more in depth, especially with all the retirees that we have in our caucus,” she said, referring to the 11 incumbents leaving offices in the House and Senate.
“We’re going to have a whole new General Assembly next year,” she said. “Those people should be the ones making the decision, not the ones that are only here for two more (legislative working) days.”
The bill’s failure to come up for a vote comes just weeks after an assault weapon ban the governor requested – and urged the state Senate to call up for a vote – was defeated in committee. That measure then failed to get the support from Democrats needed to force the measure to a floor vote.
This time the resistance is occurring in the House, where lawmakers say they have concerns the budget smoothing proposal could severely hamper their ability to address the needs of vulnerable populations.
The decision to hold the bill was made after Carney personally addressed the House Democratic caucus to push the bill, which he and other proponents say would take the volatility out of the budget process.
Developed by a task force that included Republican Treasurer Ken Simpler and Carney’s Finance Director Rick Geisenberger, House Bill 460 would place a cap on year-to-year spending growth based on a series of economic indicators.
Lawmakers then would be required to evenly split any revenue beyond that benchmark between one-time expenses and a special fund set aside to cover future shortfalls in tight budget years.
A constitutional amendment must be passed by both chambers of the General Assembly in successive legislative sessions, which span two years. That means the budget smoothing bill’s next window for passage would not come until 2021 – one year after the next gubernatorial election.
Carney had hoped to get the bill through the Legislature this year and tie its final passage next year to legislation that would raise revenue through the personal income tax, largely by eliminating itemized deductions and consolidating a myriad of senior citizen tax discounts into a single break based on means.
Yet some of the Legislature’s more liberal Democrats such as Joint Finance Committee co-chair Sen. Harris McDowell, D-Wilmington, and Rep. John Kowalko, D-Newark, have been quite vocal in their opposition to the budget smoothing bill.
They and other Democratic lawmakers fear the proposal could prevent them from using surpluses to meet growing costs from school enrollment and state worker health care and providing more funding for special education, raising reimbursement rates for nonprofits that serve adults with disabilities and providing pay raises for state workers – all initiatives funded in next year’s $4.27 billion operating budget.
The proposal, they say, also would block the state from taking on major new spending in the event of upheaval, such as the elimination of the Children’s Health Insurance Program once proposed by President Donald Trump.
The budget smoothing plan would allow the Legislature to lift the spending cap with a super-majority vote. But that provision likely would place Democrats – who hold a one-vote advantage in the Senate – at the mercy of Republicans.
House Democrats are reportedly working on an alternative proposal that would not involve a Constitutional amendment. Details of their bill were not immediately available.
Republican lawmakers on Thursday blasted their Democratic colleagues for backing away from House Bill 460, which would not become binding without being passed again next year.
“It is outrageous for the Democratic Leadership in the General Assembly to block the passage of landmark budget reform that is supported by a majority of the legislature, the Governor, the State Treasurer and a significant number of media and citizens groups,” the Senate Republican leaders said in joint statement. “There can only be one reason for this action: the Democrats want to preserve the ability to recklessly spend as much as they can find, and then use the ensuing fiscal chaos to force tax increases, as they did in 2017.”
Longhurst said the decision to hold the bill was about making sure all lawmakers know how the proposal would work and how it would impact their ability to govern.
She noted the task force released its report just a month ago while the actual legislation was not introduced until June 12.
“Not everybody understands it and they have to understand it to explain it to their district,” she said. “We all take a Constitutional amendment very seriously and I haven’t even had a chance to run it by the firemen, senior centers or anyone that could eventually be impacted by the change.”