Bold action, not alarmism, will fix Delaware's budget: Delaware Voice
Sen. Harris McDowell
Special to the News Journal
We're nearing the end of 2017, and the approach of an election year has brought with it a familiar chorus of baseless alarmist rhetoric over Delaware's fiscal health.
Claims that we're on the same track as New Jersey or Kansas make for good politics; but those talking points don't align with the reality in Delaware.
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Let's put aside the rhetoric and consider some basic facts:
Delaware has had AAA ratings from all three rating agencies for 17 years in a row, a streak matched only by a small handful of states.
Our state employees' pension system is widely recognized as one of the country's most solvent.
Private sector wages in Delaware grew faster than any other state's last year.
Delaware has passed balanced budgets for more than 40 years running. Pennsylvania and New Jersey have each experienced two government shutdowns in the same time frame.
We achieved all of that while paying for county and local services more generously than any state, and maintaining one of the lowest tax burdens in America.
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Contrary to the trite talking point that we are a "tax and spend" government, I've served under seven governors — three Republican and four Democratic — and in that time we've passed a net 12 cuts to the personal income tax, yielding an overall tax cut of 66 percent for the top bracket. Last year we even repealed the estate tax.
The facts simply don't support a narrative of fiscal irresponsibility. If anything, our state has defied fiscal gravity for decades.
Where we all agree, though, is that the halcyon days of getting a lot for a little are numbered. Our population is growing, public schools are taking on more students, and our revenues aren't growing with our economy. Times have changed, and we must change with them.
Cynics opt to reach the future through the path of least resistance: draconian cuts to classrooms, health care, and nonprofits to maintain a tax burden lower than Mississippi or Louisiana's. That approach comes up short.
Comprehensive change can only be achieved through a vision that goes beyond one-off tax credits and special funds. A budget agreement shouldn't just close our deficit; it should provide the direction and resources to tackle our challenges in education, health care, and infrastructure.
So what can we do?
For one, Delaware's government needs to be fair-minded, creative, and courageous. We need set aside the Washington-style games and performances that derailed a meaningful budget debate last year, and we need to return to our reputation as a government that gets things done.
We've been given bipartisan advice to reform our taxes so that our revenues, and the services they support, can grow with our economy and our population. The legislature should budget with the flexibility to meet today's challenges rather than yesterday's prescriptions.
We must find more efficiency and better practices in the short term, and address long-term spending — including in our overextended criminal justice system — carefully and deliberately. And we should revisit what might be the state's largest subsidy: the counties.
County budgets are pegged to property values, which have soared since the last county reassessments (35 years ago, on average). Each year, the state subsidizes that inaction on two levels.
In the short term, we subsidize local services that the counties can't or won't fully fund. And, in the long term, we pay the infrastructure and environmental costs incurred when the counties opt to fund themselves through development.
Property values have increased more than five-fold since the last county reassessment. That gap is our bandwidth for progress—making up even a fraction of it would be a game changer for our schools, which already receive less per-student than all but one state in the region.
We shouldn't have to shrink from challenges like education, health care, or addiction to subsidize a political luxury for the counties.
Beyond the arithmetic, Delaware needs to use its small size, and the agility that comes with it, to its advantage. Technology and creativity can help us efficiently maximize employee time and talent—and that's increasingly imperative as we streamline our budget and strive to compete in a global economy.
In the coming months, I will advocate for policies that break the mold, spur economic growth, improve quality of life and invest in our future. I believe the Carney administration shares that view. If my colleagues do, too—and if we commit to working together—we can show true leadership and choose to create a future rather than settling for one.
Sen. Harris McDowell is a Democrat representing Wilmington, Bellefonte and Claymont. He co-chairs the General Assembly's Joint Finance Committee.