HB60 – Republicans bailing out DelTech through debt financing

Dilapidated buildings and antiquated systems have led Delaware Technical Community College administrators to seek more state funding to repair and improve those buildings and technology systems over and above what they already receive from the state. DelTech President Mark Brainard lined up the support of Senator Harris McDowell, who introduced Senate Bill 50. To provide the funding DelTech wanted, McDowell’s bill would create a Community College Infrastructure Fund to help finance mounting maintenance concerns at each of the four campuses in the state through a statewide property tax that is levied by the Board of Trustees.

Needless to say, this mechanism of funding generated some significant intraparty and interparty opposition. Some opposed the statewide property tax in general, basically because they oppose raising taxes for any reason whatsoever (Republicans), and others opposed how the tax was going to be levied and by whom (Democrats). That opposition led to the withdrawal of support from one of the Republican co-sponsors Stephen Smyk, and from Brainard himself. McDowell, the bill’s main sponsor, has also indicated the he will pull this bill, even though it is already out of committee and ready for a vote on the Senate floor.

So, this leads us to House Bill 60. The Republican bill primarily sponsored by Representative Kevin Hensley, is nearly identical to SB60 except for the funding mechanism. Instead of a statewide property tax, DelTech will be given the ability to issue bonds to finance the cost of the repairs and improvements DelTech seeks. The legislation also provides a mechanism, but not an obligation, for the state to provide matching funds for minor capital improvement projects consistent with existing matching provisions for public education. So instead of finding state revenue to meet DelTech’s needs, the state will allow DelTech to go into massive debt to fund the capital improvements. If that isn’t a symbol of Republican approach to government, I don’t know what is.

Where is the bill? House Administration 2/28/19

Democratic Sponsors —

Republican Sponsors — Hensely, Wilson, Ramone, M.Smith, Smyk, Delcollo, Pettyjohn, Briggs King, Dukes, D.Short

Yes Votes — 

No Votes — 

Delaware politics from a liberal, progressive and Democratic perspective. Keep Delaware Blue.

6 comments on “HB60 – Republicans bailing out DelTech through debt financing

  1. cassandram

    So do we have a good sense of how DelTech got into this situation? I walk by the facility on 4th St regularly and you can tell from the outside that they have been ignoring maintenance. But they *do* have solar panels over a couple of parking lots. Perhaps funding for these solar panels (a good thing!) came from somewhere else. But the point of all of this is that schools all over the state (DelTech, public schools) have been robbing peter to pay paul for a very long time to get to the point where buildings are crumbling. Is this the GA not appropriating enough money? Is this DelTech expanding without having the right facilities for it? Is this the GA sending money to DelTech that they aren’t providing adequate oversight for?

    I do not know why this is going on here, but I do get it for public schools.If we have a building maintenance issue at DelTech and the state’s public schools, we have a systemic issue that needs a big fix. Debt for capital improvements is fine, but debt just to do the maintenance that should have been done all along is irresponsible. If the GA not giving DelTech enough money to keep up their buildings is a problem, then the GA should fix what they caused.

  2. “So instead of finding state revenue to meet DelTech’s needs, the state will allow DelTech to go into massive debt to fund the capital improvements.”

    This is an absurd way of explaining the issuance of bonds. Such “massive debt” is how virtually all state-funded construction is paid for.

    @cassandra: The GA ignored the requests for years, and now it’s too much money to make it up out of the general fund. DelTech compounded the problem by insisting on the designated-property-tax solution rather than presenting the problem and forcing the GA to come up with its own solution.

    So now the Republicans have come up with one. Does DelDem oppose it for a better reason than the one he offered, or is it offensive because Republicans have come up with a viable solution that Democrats did not?

    DelTech wants to brag about its low tuition, and it wants taxpayers to foot the bill for that. No sale.

    My solution is simple: Reduce the demand for DelTech by admitting more Delaware students to UD, instead of forcing Delaware kids into 2 years at DelTech. The maintenance got out of hand because the expansion got out of hand.

    As is so often the case, no other state does community college this way. And as is so often the case, doing it the Delaware way has led to uncommonly high levels of nepotism, feather-bedding and incompetence.

    If DelTech wants my support, all they have to do is fire the current president and elect a new board. If they don’t, I oppose the school unilaterally.

    • In-state tuition at UD is almost $14,000 (just tuition, this does not include any mandatory fees) a year, so a simple solution is not to force UD to take more students. Are you saying we should make students take on massive student loan debt?

      • Nobody can force you to go there. Currently we ARE forcing kids to DelTech. See the difference? You can still go to DelTech, but you’d have the option to go to UD for an actual education instead of two years of high school remedial learning.

  3. cassandram

    state-funded construction

    So I called it “capital improvements”. But if DelTech is basically looking to catch up from neglected maintenance, then that is a result from long term neglect of their current account funding, which is how maintenance gets done. If they are doing capital improvements because their lack of maintenance means that is what they have to do now, then we are looking at malpractice somewhere.

    • I wasn’t criticizing what you called it. I was talking about bond issuance for DD, who seems to have some misperceptions about bonds. Calling “massive debt” implies it’s a bad idea, when in fact it’s how the state funds all its construction projects.

      Somebody wrote about the upkeep failure, I think maybe in the State News, last week. It boiled down to the GA gave them the same amount of money no matter how much DelTech asked for. The piece also made the point that “students graduate without debt.”

      I agree it’s malpractice, but I think the blame is shared. It can all be traced back to Lonnie George getting the presidency of the school and running it as his personal fiefdom for two decades. That’s where the arrogance of telling the GA the manner in which it should raise the money originated.

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