Reverse the Spending Cuts

Last year it was deficits the far as the eye could see, requiring deep cuts in education spending and money spent on Grant-in-Aid programs.

This year we have a big surplus that just got larger last week.

But Gov. John Carney (D) and his future Republican opponent in 2020, Treasurer Ken Simpler (R), warned legislators on and off the Joint Finance Committee to not use the surplus for new spending and to instead place the surplus funds into yet another reserve fund (yes, one already exists, but we don’t ever touch it, because its purpose is to preserve our Triple A credit rating.).

I would like to thank the Governor for accepting Republican framing that any new spending that takes place is obviously irresponsible and more akin to a credit card binge.  That was helpful.  Governor, it is long past time you exceed your Carperdyne programming.  If Data and The Doctor on Star Trek can do it, you can too.

If I might, I would like to offer a suggestion for the use of the surplus:

Restore all the cuts.   And by that I mean, raise the budget baseline for education spending and for all Grant-in-Aid programs to what it was before last year’s budget cuts.

Restore everything that was cut because Andria Bennett and her Republican allies refused to raise taxes on the wealthy.

Then use the rest on infrastructure projects that are needed.

19 comments on “Reverse the Spending Cuts

  1. Like it, almost as much as I dislike Carper, Carney and Coons.

  2. cassandram

    Disability nonprofits fear crisis because state doesn’t fully fund workers

    As you read that, keep remembering that the State of Delaware was telling Amazon not too long ago that there was plenty of money for *them* to relocate here.

    • They weren’t offering budgeted money to Amazon. They were offering to allow Amazon to keep a portion of the tax revenue their 50,000 employees would have generated for the state. A rebate That’s totally different than throwing millions of tax payer dollars to the Interfaith Housings of the world and many others who are apart of Delaware’s grant and aid scheme. Grant and Aid, with a few exceptions, is a process that is mostly about political favors for friends and donors of legislators. I wouldnt fight on this battlefield.

      • cassandram

        I’m not sure there is much of a difference in “budgeted money” and a “rebate” in this instance. This “rebate” has the state specifically foregoing the benefit of a large company being placed here and that is a portion of the tax revenue that would normally accrue to the state. No matter how you name it, you have the state providing balance sheet supports to a company that doesn’t need them while still starving some of its vital services. And vital service people. And keeping itself in a position to keep starving its vital services because Amazon has the money we could have used to improve this situation.

  3. I’m sorry but that’s just uncharacteristically short sited of you. The economic principle of a rebate is that you generate more demand over time, thus greater revenue. Providing a rebate over, let’s say 10years, to a company that would never come without it, allows the company to receive a benefit for ten years in return for, in many cases, for a 20plus year commitment. Over time you make more money than you ever would not offering a rebate at all. And its revenue neutral because you have not allocated those dollars to other services and are only offering a portion of their withholdings back to them, not all of their withholdings. So you would still have the increased revenue needed to fund services, and could fully realize the total impact of the company’s growth after 10 years. Not to forget that you have 50,000 new workers paying into gross receipts tax, state and local taxes, and property taxes.

    How on earth is that not better than funding some Senators’ neighbor’s french fry machine. Come on… I get that dems hate direct economic development, but a full throated defense of Grant and Aid? Give me a break.

    • cassandram

      Except that isn’t what happens. It’s another variant of the trickle down theory. In the meantime, you (in theory) have the impacts of 50,000 new workers to deal with — the additional infrastructure for offices and housing and all of the other overhead for new corporate office space so you have increased your costs (and in areas where you are already in deficit). Amazon gets the certainty of $X/year from the state, while the state gathers up whatever is left. If any. Amazon can go to the capital markets and get every red cent they need to build the most deluxe corporate palace they can. Instead of doing that, we’ve decided that Delaware taxpayers need to substitute for those markets without a single mechanism to ensure that they get an adequate return. David Cay Johnston is required reading on this. And we are still telling those who are in most need of state help that they have to wait. Gant In Aid can certainly be fixed, maybe we ought to start with tax rebates for these organizations?

      • A rebate for non profits? They already don’t pay taxes!!! Hahahah

        Look, I’m not saying I like this type of corporate welfare. My point is that it makes way more sense than funding most of what comes out of grant and aide. Over $40million per year. 4x the funding of the Strategic Fund. Alby mentioned that there is not system for ROi on these tax rebates, but there is even less information on the ROI on the General Assembly’s favoritism slush fund. Check how many former legislators and staffers have bs non profits being funded. Sure there are good ones weaved in, but not 40million worth. Dems should be fighting for infrastructure and education, not making sure that Harris McDowell can keep his friends flush with cash.

        • elizabeth allen

          Bane: These grant in aid programs fund the thousands of severally disabled in this state. The state gave away the right to care for these folks themselves, sohave hired outside providers to do the job. Those providers haven’t had a raise since Minner cut their guts out. The most severe in this state are provided (not) services by people paid $10.00 a hour without proper training. The State has always kept the severelly disabled starved and neglected. Its time to pay the providers, and demand they deliver raises to the direct care staff and train them. The State cannot contact away its responsibility under the law…our kids are at the mercy of their caretakers…they are the silent majority, out of sight, out of mind…except they are human beings…thank the creator you arent one of them.

          • Then make the Grant’s go through the cabinet agencies. I assure you, programs for the disabled are not the bulk of the $40million. This is not about supporting the disabled or not. This is about good governance. What does Harris McDowell know about determining metrics for programs like this? If they are that important, give the money to DHSS to assure proper oversight and to ensure that monies are spent effectively and in line with other goals. In any other government, contracts for health services come from health agencies. Not the joint finance committee. We’ve been so used to the Delaware Way that it’s become normalized.

          • Grant and Aide funds waaaaaaay more than programs for the disabled. I hope you aren’t under the impression that that $40million per year all goes to Easterseals…. Sounds like you need to take a look at last years list… Beauty Pageants and non profits belonging to family members of legislators. If contracts are worthwhile, they should be done through the agency responsible for that subject matter, not the legislature.

            Give them raises? All programs get raises? How would you determine who gets a raise when they dont even have to report on their outcomes!

            • The term is grant in aid, not grant and aid.

              • Thanks, but I like my way better. Grant in aid insinuates that the funding is merely in support of existing programs and initiatives with other existing streams of revenue. Grant and aid infers rather that there are two classes of applicants. Those receiving aid and those being granted a no show taxpayer funded revenue stream. But keep using their spin, by all means.

        • cassandram

          That rebate could certainly be on the wage taxes taken from their employees. This is not going to be alot of money for a non-profit like the organization in the NJ article, but it is something. No doubt Grant In Aid should be rethought. I suspect it started as a way to funnel funds directly to community organizations doing vital work. My point is that throwing money at Amazon seems an odd priority in a state where we have documented deficiencies in education funding, treatment and care for the severely disabled, affordable housing, services for the homeless, etc. And the business of doing more with less always seems to mean that those who need the most are first in line to do with less.

    • Cassandra is right. The state does not keep track of ROI on these tax abatements; the public never gets a full accounting. Do you think it would do that if it could prove this approach is cost-effective? I don’t. I think they know it’s not and therefore don’t want to document it.

      Sometimes your automobile keeps running well after you’ve made the last payment. Often it doesn’t. It’s a gamble, and it gets ugly when you lose the bets. Ask Markell.

      • I agree with you. My point is that it’s better than the G&A slush. Alby you mentioned that there is not a system to show the ROi on DEDO tax rebates, but there is even less information on the ROI on the General Assembly’s favoritism slush fund. There are no reported outcomes, nothing. Check how many former legislators and staffers have bs non profits being funded. Sure there are good ones weaved in, but not 40million worth… annually. Thats double the size of Fisker. That’s 4x the size of the Strategic Fund.

  4. Like Bloom Energy. In 2016, in 4 years we paid 130 Million in Energy Surcharges!

    • Yes, just as wasteful Anono… Not sure if that was your attempt at a checkmate. Again, I dont support these agreements, but I’m also not going to sit here and act as though the legislatures slush fund is all made of Mother Theresa type programs.

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