After the Biden American Rescue Plan passed, states have been flush with cash. And one way some states have been been using that money is to provide assistance to their residents as we deal with the inflation resulting from the supply chair issues of the Pandemic and the Russian War in Ukraine.
Add Delaware to those states.
On Thursday, Democratic and Republican lawmakers and Governor John Carney announced a plan Thursday that would provide direct economic relief to state taxpayers this spring. The relief plan, agreed to in principle by the leaders of each of the four party caucuses, would send $300 in direct payments to every Delawarean who filed a 2020 tax return, which is the most recent tax year where returns are available. Another reason why they are using the 2020 returns rather than 2019 or 2021 is that an increased number of people filed returns that year who normally wouldn’t simply so that they could access stimulus checks earlier in the Pandemic. So by using 2020, the state is casting the wider net.
Legislation is being drafted to enable the relief payments is expected to be introduced during the upcoming session break and considered when the General Assembly returns in April.
My first thought was that we better not be using money needed for the budget, and I worried that they would pass this but then would need to cut funding or raise taxes this or next year. But it would appear that the surplus is so great that that is not even an issue, both from federal funds through the American Rescue Act and from standard boosted revenues resulting the excellent Democratic economy. The projected fiscal 2023 budget surplus is approaching $1 billion, and that was before the Delaware Economic and Financial Advisory Council met last week to review updated revenue projections for the current fiscal 2022 and forecasted an additional $206 million in revenue for this fiscal year above previous estimates, which would be used to fully fund the rebate program.
Providing a $300 rebate for each of the more than 600,000 Delawareans who filed a 2020 tax return would cost approximately $186.6 million.
House Majority Leader Valerie Longhurst: “Like most of the country, Delaware has weathered a difficult storm during the pandemic. Our economic recovery has been strong in many ways, but it has also slammed residents with new challenges of increasing costs in almost every facet of their life. Delawareans emerging from the pandemic are facing higher prices at the grocery store, at the gas pump, and for many of the goods and services they rely on every day.”
“All four caucuses recognized that economic issues like inflation are not partisan – they impact everyone in every corner of our state. Fortunately, the state has been blessed with a record surplus that has allowed us to make numerous investments in our infrastructure and environment. Now, we have the opportunity to invest in our residents and provide direct relief to every taxpayer in the state. These rebates are one way we can help offset residents’ recent hardships and ease the burden many are facing. I’m looking forward to a swift and strong passage of this proposal.”
Senate President Pro Tempore Sen. Dave Sokola: “Throughout the COVID-19 pandemic, my colleagues and I in the General Assembly have fought to help Delaware families struggling to keep food on their tables and roofs over their heads, strengthen our economy and chart a path of recovery and progress. We have raised the minimum wage, improved investments in primary care, expanded access to free higher education, and in the coming weeks, we will finally have a paid family and medical leave program in the First State.
“Now, with a record $1 billion surplus on the table, we are putting aside our political differences to put money back into the hands of Delawareans. These direct payments will help stimulate our economy, help families pay their bills and provide much needed relief to a workforce that labored through one of the most difficult moments in our nation’s history. This legislation is more than good public policy. It’s the right thing to do.”
Governor Carney: “My hope is these direct payments will provide some measure of relief for Delaware families who are dealing with higher costs at the grocery store and the gas pump. Every taxpayer I’ve ever talked to expects us to manage their money in a way that’s responsible and sustainable over the long term. These direct payments to Delaware families are part of a broader, responsible budget proposal that will invest in education, our economy, and Delaware communities, and increase our reserves to prepare our state for the future.”
State House Minority Leader Danny Short: “The state has hundreds-of-millions of dollars more than what is needed to pay for our annual funding bills, including prudently setting aside money in reserve. Hopefully, this rebate will not be treated as a final solution, but rather as a good start towards balancing the state’s needs with those of our citizens.”
Senate Minority Leader Gerald Hocker: “Delawareans are struggling, and this rebate will help provide some much-needed relief as we deal with rising inflation and high fuel prices. I am pleased that the four caucuses were able to come together and work on this proposal to help the citizens of our state.”