Delaware already has a balanced budget requirement. We already have a Reserve Fund. What we don’t have, apparently, are legislators in the House and Senate willing or able to do their jobs every year. Or maybe they are scared to do their jobs.
And so, we have this monstrosity, a Constitutional Amendment thought up by a Republican, endorsed by a Democratic Governor too cowardly to possess his own mind, and for some inexplicable reason, sponsored by the House Democratic Leadership and every Republican in the GA.
What HB460 would do is, when there is a surplus, like this year, it will force that surplus into a second reserve fund to be used only in emergencies, and only when TWO THIRDS of the General Assembly agree. We couldn’t get two thirds of the General Assembly to agree that women are equal to men earlier this year. And you can never get any Republican to vote for emergency spending in times of crisis. Remember their treasonous and evil actions during Hurricane Sandy and Hurricane Katrina, and this past year with Puerto Rico?
And in times of deficit, if we cannot agree to tap the emergency fund, then this bill would require us to slash programs for the sick, the young and the poor.
In reality, this bill is an abdication of our governing responsibility just because we had one bad year last year in figuring out the budget deficit. It is as if one year of partisan rancor scarred for life these Democratic legislators who are used to the amiable Delaware Way of civility and bipartisanship.
Grow. The. F*ck. Up. Will you please, Democrats?
You are willingly giving up your spending power to craft a budget to meet our priorities to Republicans. You all are idiots if you think that Republicans will ever agree to tap that Emergency Fund in times of deficit. This is all a trap to get you all to agree to never raise taxes and to always slash spending in times of deficit. And then, in times of surplus, we can never use that extra money to address the many problems Delaware actually has.
You know, if we wanted Republicans to represent us, we would vote for them. If you want to establish a savings account lock box to put some of the surplus in to save for a rainy day when we have a budget deficit again, fine. But do give the Republicans the key to the box. I highly encourage any Democrat sponsoring this bill to immediately get your name off it today. Mere sponsorship of this bill is enough to condemn you in the eyes of many of your voting base.
Dating back to the work and discussions of the so-called expenditures study committee appointed by former Gov. Jack Markell, there is little doubt that the original moving force for this idea traces directly to Treasurer Ken Simpler.
And who thinks that the ultimate goal of “the second reserve fund” is to turn it into tax cuts for the rich after it sits there a few years? If it originates with the Republicans this is always the method to the madness.
So I came here to write about this very thing this AM. It is ridiculous to think about “budget smoothing” when your budget is so out of whack in the first place. While we have a budget surplus now, some of that is from the shifting of some corporate compensation for tax scam purposes. We do not know seriously what the effect of the tax scam will have on our budget. If there is a need to do “budget smoothing”, the first order of business ought to be fixing the budget’s structural problems. Raise the upper tax brackets. States that raised their rates are booming (Minnesota and California) and are busy fighting over investments like transportation and health care and education rather than hiding behind financial schemes that are meant to deteriorate the lack of investment we make in ourselves further. Make a deal that you put this up for acceptance AFTER we fix the revenue issues. Spend some of the windfall on a reassessment so that you can untie counties hands some and relieve some of the pressure on your budget. PUT THE MONEY BACK YOU TOOK FROM SCHOOLS LAST YEAR! Fix the revenue THEN fix the management of windfalls.
And you know what? That’s EXACTLY what any business would do.
I spoke to a legislator this morning about this very bill. The argument for HB460 is that this is a leverage play to get recalcitrant Democrats like Andria Bennett and Republicans to vote for Income Tax Reform like new rates, brackets and closing of loopholes. Democrats would pass this HB460 this year and then promise not to pass it a second time unless reforms and raises are agreed to. I told him my trust in the GA on taxes is at zero and I would need to hear that from the Speaker himself. But even if they were successful in getting taxes reformed and raised, I would still oppose HB460. It is a bad bill, a Republican straight jacket on the budget.
Huh. Inside baseball that gives Simpler something to campaign on. Go Figure.
And the Bump Stocks bill is up today, so the rush to get this through gets to hide behind the gun circus.
Flying under the radar today is Senate Bill #242. A Pay For Success bill. Sponsored by two legislators I respect dearly. Which completely baffles me they would let this legislation go through as is. This opens the door to kill the bidding process for state contracts and lets even more of the corporate education reformer wolves into our schools.
Take two minutes. Make a difference.
Called today and left a message. Hope it works.
HB 460 was introduced on a Tuesday, will have a committee hearing on Wednesday and be brought to the House floor for a vote on Thursday. It is the first leg of a proposed constitutional amendment and one might ask why such a matter of utmost significance is being rushed through in the final days of a session. Why is there no time for a fair assessment of the ramifications of a constitutional change. The woefully lacking excuse from the sponsor is that this bill will have to be passed again in its current form next session. That is a ridiculously disingenuous excuse to push a piece of legislation through a mostly uninformed (on this particular bill) legislature. In fact HB 460 is an attempt to pass a Grover Norquist conservative dream known as a ‘balanced budget amendment”. The reality of such constitutional amendments is that they will establish a certainty of budgetary constraints that will place the services and programs of the most vulnerable Delawareans on the chopping block and establish regressive taxation policies that will hurt the working families, small businesses and poorer workers. The bill itself refers to the “Advisory Panel to the Delaware Economic and Financial Advisory Council (DEFAC) on Potential Fiscal Controls and Budget Smoothing Mechanisms (Panel) as supportive and integral to the process. You may recognize the work of the “Panel” in its previous 2016 report that resulted in corporate tax cuts and the unforgettably damaging repeal of the “EstateTax” at a tremendous cost to taxpayer revenue resources. The most recent report of the Panel, referred to in HB 460 (lines 11-12) released 6/1/18 once more fails to even consider creating additional PIT brackets. It has the audacity to suggest taking away deductions from Delaware taxpayers as a way to reform Personal Income Tax. This is one of the most regressive taxation reform proposals that I’ve ever witnessed. It should come as no surprise considering the make-up of the Advisory Panel consisting of Chamber of Commerce and various conservative lawmakers and government agency heads. This bill should not be passed at this time and a serious consideration of its intended and unintended consequences ought to be discussed with the entire General Assembly and the public over the course of the summer.
Representative John Kowalko 25th District
The piece on budget smoothing is live here: https://www.delawareonline.com/story/opinion/contributors/2018/06/19/dont-buy-spin-budget-smoothing-means-budget-cuts/713676002/