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Archive for the ‘Delaware Legislature’ Category

 

State support for higher education is slipping with one large exception at the University of Delaware. One department, actually one individual, at the university is slated for a 38% increase according to the latest draft of the state budget.  This is in contrast to the state contribution for university operating expenses falling from about 21% in 2000 to about 12%, according to the University’s 2015 Investment Office Annual Report.

The currently proposed 2017 Fiscal Year proposed budget consists of fifty-nine pages of tables of budget numbers by department, and two hundred and twenty-six pages of “epilogue” language.  The epilogue pages are similar to footnotes and most of it is innocuous and a pretty boring read.  It can also be a place where bad policy goes to hide.

This may be the case with Section 285, page 199, which reads:

Section 285. Section 1 of this Act makes an appropriation to Higher Education, University of Delaware  (90-01-01) for the College of Arts and Sciences. Of this amount, $290,000 shall be allocated to the Center for Energy and Environmental Policy for research supervised by Dr. John Byrne as principal investigator

Yes, while other departments struggle as costs rise faster than state contributions, Dr. Byrne is expecting $290,000 to use as he sees fit, not even with direction for what he is researching.  The transfer effectively raises the earth sciences budget 38%.  Dr. Byrne and the University of Delaware have not responded to requests for comment.  A similar transfer was authorized in the last three year’s budgets but was designated more generally to the Center for Energy and Environmental Policy run by Dr. Byrne.

Unlike specific legislative bills there is no acknowledged sponsor of epilogue language.  However, Dr. Byrne and State Senator Harris McDowell (D – Wilmington North) have worked together for over a decade.  Senator McDowell is Co-Chairman of the Joint Finance Committee that writes the budget, and of the Senate Energy Committee.  Dr. Byrne and Senator McDowell jointly chaired the Sustainable Energy Utility (SEU) and its Oversight Committee over the last decade.  Dr. Byrne would be expected to consult with Senator McDowell in his role with the Center for Energy and Environmental Policy.  The obvious question is Dr. Byrne getting special treatment in the state budget because of his relationship with Senator McDowell.  Senator McDowell has not responded to requests for comment.

Senator Greg Lavelle (R – Sharpley) commented, “Based on the fact Dr. Byrne’s name is specifically mentioned in the epilogue language is a unique event, and we will be asking questions”.  He went on to say. “It would make one think that authority for use of the funds rests with Dr. Byrne and not the Center for Energy & Environmental Policy”, or the University.

David T. Stevenson, Policy Director

Center for Economic Policy

 

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Every year, the General Assembly finds a way to balance the budget, as they are required to do by our state constitution, or at least use accounting gimmicks to move spending around so future liabilities aren’t held against the current FY budget.

This year, the state’s “in a pickle”, so to speak, or maybe something to do with scrapple would fit better. There is a budget deficit in the neighborhood of $70 million, which increased after legislators caved to state employee demands not to pay additional expenses for their healthcare policies due to a wage freeze for most state employees, a freeze which has lasted for years. Not only did they not make this move at the request of Governor Markell, but they added $21 million to the deficit with money we don’t have to keep their constituents happy.

Meanwhile, the state wants money to pay for infrastructure spending, cleaning up the waterways, investing in startups/businesses to grow the economy, paying for increased Medicaid and public education expenses, services for the increasing number of senior citizens retiring into Delaware, and so on. As spending goes up, the state is collecting less from casino revenue and  personal and corporate income taxes than in previous years. You can see where we’re going to run into problems, and we’ve predicted for some time that the next governor of Delaware is going to have a serious fiscal mess to fix.

So what do our elected officials have in mind to balance the budget? Some new ideas include: raising state income taxes on top earners from 6.7% to 7.6%, increase Delaware’s per-gallon gas tax, motor vehicle fees, and taxes levied on wholesale fuel deliveries to fund new road and bridge improvements, increasing the gross receipts tax, reduce corporate income taxes, eliminating the estate tax, and actually cutting personal income taxes across the board.

“There’s not going to be a split of these issues that will give us the transportation money and we’ll figure this out later,” Lavelle told the News Journal. “I didn’t fall off the banana truck yesterday. I’ve been fooled more than once down there and it ain’t going to happen again.”

Did you see what was missing among these ideas? Ways to cut state spending. This is how our state does “the water dance,” similar to how many indigenous tribes around the world pray for rain; they do a symbolic dance and hope the sky will open up and rain will just fall and provide much-needed water to grass and crops so they will grow and life can continue. Replace the actual dancing with accounting “dancing” (tricks), and the rainfall with moneyfall, and otherwise the concept is the same.

Now some of this has already been done; we know the state Department of Education is about to take a big hit, as Legislators have become increasingly opposed to the Governor’s education plan, which includes Secretary Murphy. Race To The Top funds are phasing out and school district referendums continue to alternate between passing and failing, which means some districts have found themselves cutting back on spending and hiring while freezing wages for some district employees.

Yet when we see the final budget, which must be passed by June 30, where else will the state consider making cuts? Senator Lavelle went on record suggesting that tax increase were off the table unless the prevailing wage law is reformed or repealed. Will Delaware Democrats be willing to stand up to their union supporters and change the prevailing wage law?

Another way the state could make cuts is to get us out of RGGI, which is a regional cap and trade scheme. RGGI does not do anything for the environment, but it does increase our electric bills by an average of $50/year per household, and thousands more per year for most industrial businesses, who have most of the remaining few manufacturing jobs Delaware still has. Will the GA make an effort to pull us out of RGGI?

Delaware has plenty of room where cuts could be made, the only determination will be whether they make them or not. In the meantime, please visit caesarrodney.org

for the latest news and information you can use to learn about our state’s fiscal situation and click on the “Impact Delaware” link to learn more about how you can make a positive impact on Delaware.

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In response to Senator Karen Peterson’s (D-Stanton) letter to the editor in The News Journal on February 12, 2015:
We want to set the record straight. First, We will address Senator Peterson’s first point that our information on legislative salaries is incorrect. The difference is the Senator wants to compare the average legislative salary in 2007 and 2013 separately. This biases the data downward due to the high turnover in the Senate and the even higher turnover in the House. What we did was to view data from all years 2007-2013. The reason the data is different because of the turnover between legislators who left office, whether by election or some other cause. When we give the average pay we mean total pay, including expense stipends and leadership/committee position bonuses. We are not exclusively talking about base pay, which the Senator clearly is.

All of our data comes from the Delaware Office of Management and Budget (OMB) which we received by FOIA request. Using publicly available data Dr. Stapleford viewed legislative salaries from 2007-2013,. but divided legislators into two categories: Those who were members of the General Assembly for the duration of time 2007-2013, and those who were legislators in 2013 but not 2007.

All data below is for the following individuals who were in the State Senate in 2007 and are currently still in the State Senate (other pay is the $7,334 legislators are allowed for expenses, which we have included as part of their pay). Regular pay has factored in leadership bonuses.

Regular Overtime Other Total
Blevins,Patricia M $51,826 $0 $7,334 $59,160
Bonini,Colin R. J. $46,184 $0 $7,334 $53,518
Cloutier,Catherine Ann $51,958 $0 $7,334 $59,292
Ennis,Bruce C $46,487 $0 $7,334 $53,821
Hall-Long,Bethany $42,332 $0 $7,334 $49,666

All data below is from 2013:

Blevins,Patricia M $63,934 $0 $7,334 $71,268
Bonini,Colin R. J. $47,893 $0 $7,334 $55,227
Bushweller,Brian J $55,474 $0 $7,334 $62,809
Cloutier,Catherine Ann $53,667 $0 $7,334 $61,001
Ennis,Bruce C $53,667 $0 $7,334 $61,001
Hall-Long,Bethany $47,893 $0 $7,334 $55,227
Henry,Margaret R $49,841 $0 $9,328 $59,169
Hocker SR,Gerald $47,656 $0 $7,334 $54,990
Lavelle,Gregory F $51,835 $0 $7,334 $59,169
Lawson,David G $53,312 $0 $7,334 $60,646
Lopez,Ernesto Braulio $47,656 $0 $7,334 $54,990
McBride,David B $56,417 $0 $7,334 $63,751
McDowell,Harris B $55,500 $0 $7,334 $62,834
Peterson,Karen E $53,667 $0 $7,334 $61,001
Pettyjohn,Brian Guy $47,656 $0 $7,334 $54,990
Poore,Nicole $48,337 $0 $7,334 $55,671
Simpson,Franklin Gary $56,417 $0 $7,334 $63,751
Sokola,David P $49,701 $0 $7,334 $57,035
Townsend,Bryan Jeffrey Schurgard $47,656 $0 $7,334 $54,990
Venables Sr,Robert L $48,619 $0 $7,334 $55,953

As you can see if you look only at “regular”, or base, pay, Dr. Stapleford’s number is off the mark. But when you include other pay, these numbers increase. Title 29 Chapter 7 of the Delaware Code explains this further in detail.

The second charge by Senator Peterson is over the time legislators spend working. The work commitment for Delaware legislators of 6 months plus a few days comes directly from the Delaware code. (Not to mention that legislators not involved with the Joint Finance Committee are not required to work for this 5 week period) Legislators do attend meetings and events with constituents, lobbyists, and advocacy groups during the year but they are a) not mandated by law to do so and b) do not always do so for 40+ hours a week that most full-time salaried private sector workers are expected to work consistently.

We also want to point out according to the National Conference of State Legislators, Delaware ranks 12th in base salary for legislators. Each state has different session dates and while some states pay more and have fewer open dates than Delaware (Wisconsin, Illinois, Alaska, and Hawaii are also very generous with legislative pay), most states have part-time legislators who have similar responsibilities but get paid much less. We respect the Senator’s opinion on this but we do want to note that the majority of states do not have full-time legislators. Becoming an elected official ought to be a gesture of public service to one’s community, state, and country, not a full-time career path.

The third charge is over how legislative salaries are set. On this issue Senator Peterson is correct and CRI stands corrected on the original passage Dr. Stapleford published:

“To be clear, however, the legislators do not set their own salaries and stipends. This is done by the Delaware Compensation Commission of whom 5 out of 6 members are legislators and 1 member is from the private sector.”

From Title 29 of the Delaware Code, Section 3301:

“There is established a commission known as the “Delaware Compensation Commission,” hereinafter referred to as the “Commission,” consisting of 6 members, 2 of whom shall be appointed by the Governor, 1 by the President Pro Tempore of the Senate and 1 by the Speaker of the House of Representatives. The fifth member shall be the President of the Delaware Round Table. The Director of the Office of Management and Budget of the State shall serve as an ex officio and nonvoting member of the Commission. The appointees shall be persons not holding any public office nor employed substantially full-time with compensation by this State while serving on this Commission.”

The bottom line is that in 2013, according to the U.S. Bureau of Labor Statistics, the average wage in Kent County was $40,664 a year and in Sussex the average wage was $37,856, less than the average State Senator’s pay but without the allowance for up to six months of non-work time. Even factoring in New Castle County, the average wage in 2013 $53,820, which is still less than what all of our State Senators made that same year.

*Update: We are including State Representative data as well. We note the average pay for a Representative in 2013 was $55,801, or a little over $3,000 less than state senators. We’ll note that 14 state reps made than than the average wage but all cleared $50,000 once the constitutionally-mandated expense stipend is factored in.

Name base pay overtime other pay total pay
Barbieri,Michael $44,041 $0 $7,334 $51,375
Baumbach,Paul S $44,041 $0 $7,334 $51,375
Bennett,Andria L $47,834 $0 $7,334 $55,168
Bolden,Stephanie T $47,834 $0 $7,334 $55,168
Brady,Gerald L $48,549 $0 $7,334 $55,883
Carson Jr,William J $53,519 $0 $7,334 $60,853
Dukes,Timothy Dale $44,041 $0 $7,334 $51,375
Gray,Ronald E $44,041 $0 $7,334 $51,375
Heffernan,Debra J $53,519 $0 $7,334 $60,853
Hudson,Deborah $51,865 $0 $7,334 $59,199
Jaques JR,Earl G $44,041 $0 $7,334 $51,375
Johnson,James $53,667 $0 $7,334 $61,001
Johnson,Samuel Q $48,549 $0 $7,334 $55,883
Keeley,Helene M $47,904 $0 $7,334 $55,238
Kenton,Harvey R $53,519 $0 $7,334 $60,853
King,Ruth Briggs $44,189 $0 $7,334 $51,523
Kowalko JR,John A. $44,111 $0 $7,334 $51,445
Longhurst,Valerie J $56,417 $0 $7,334 $63,751
Miro,Joseph E $53,667 $0 $7,334 $61,001
Mitchell,John L $44,189 $0 $7,334 $51,523
Mulrooney,Michael P $47,893 $0 $7,334 $55,227
Osienski,Edward S $44,041 $0 $7,334 $51,375
Outten,William R $47,834 $0 $7,334 $55,168
Paradee III,William Charles $44,041 $0 $7,334 $51,375
Peterman,Harold J $47,834 $0 $7,334 $55,168
Potter,Charles $44,041 $0 $7,334 $51,375
Ramone,Michael J $47,893 $0 $7,334 $55,227
Schwartzkopf,Peter C $63,934 $0 $7,334 $71,268
Short,Bryon H $44,041 $0 $7,334 $51,375
Short,Daniel B $56,447 $0 $7,334 $63,781
Smith,Melanie George $55,472 $0 $7,334 $62,806
Smyk,Stephen T $44,041 $0 $7,334 $51,375
Spiegelman,Jeffrey N $44,041 $0 $7,334 $51,375
Viola,John J $51,865 $0 $7,334 $59,199
Williams,Kimberly A $44,041 $0 $7,334 $51,375
Wilson,David L $47,834 $0 $7,334 $55,168

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Legislative Hall in Dover, Delaware

This article originally appeared at the Watchdog.org website on January 20, 2015. Read the original at http://watchdog.org/193657/legislative-priorities-2015-delaware-way/

Last week was the first week the state Legislature was in session, but they will soon adjourn for budget and finance hearings before getting back to lawmaking in mid-March. Five new representatives and one new senator took their oaths of office for the first time, but this Legislature looks almost identical to the last one: the Democrats control the governor’s mansion, the House of Representatives 25-16, down from 27-14 last year, and the Senate 12-9, down from 13-8.

Notably absent from the last General Assembly were bills to make Delaware’s economy more free as the state—well-known as the “Switzerland of America” for its easy incorporation process and fair Court of Chancery—faces competition from Nevada and North Dakota for corporate business and from the Sun Belt for jobs. This year the Caesar Rodney Institute hopes to see legislation to address the following issues:

1. Education Savings Accounts: Delaware has “school choice”-IF your idea of school choice is to allow a child to transfer from one public school district to another (provided that district has room).While that’s better than nothing, that’s not really school choice.

CRI supported a bill last year called the “Parent Empowerment Education Savings Account Act” (PEESAA) which would have introduced Education Savings Accounts as an option for low-income and special-needs students who are the most likely to need additional services not being offered by the traditional public schools. This bill was tabled in the House Education Committee but we hope ESA’s and other bills encouraging school choice are brought up this year.

2. Prevailing Wage (PW): Delaware has an insanely wide range of wages a that business who wants a public construction contract has to pay its employees to get the contract.

Every January the state Department of Labor mails out its PW survey to union-friendly contractors and conveniently “forgets” to remind non-union-friendly construction companies to ask for, and return, the survey. This results in wage variance like $14.51 per hour for a bricklayer in Sussex County, but $48.08 per hour for the same job in Kent and New Castle Counties. Not to be outdone, boilermakers get $71.87 an hour in New Castle County, but “only” $30.73 in Kent County.

These high rates prevent many construction projects from being started and make those which are done more expensive for taxpayers. If the PW won’t be eliminated, we hope the state will instead use the U.S. Occupational Employment Statistics survey. This would reduce rates by almost 40 percent on average and free up nearly $63 million of spending from the State’s FY15 capital budget, including almost $18 million for more school capital improvements.

3. Make Delaware the next right-to-work state: Delaware is not a right-to-work (RTW) state and, between that and our inconsistent-as-applied PW law, many businesses outside the state choose not to move here. Incorporating and buying office space in Wilmington for some high-paying executive jobs is one thing. But Moody’s Analytics in late 2013 said Delaware was the only state at immediate risk of falling back into a recession and a lot of this is due to more businesses closing than opening in Delaware. Pass legislation to end forced unionization and support pro-job growth policies instead.

4. Tax and regulatory reform: Only five states have a Gross Receipts Tax, which is a tax on revenue generated before profit and loss is factored in. Three of those states have no further taxes on corporate earnings and the only other state (Virginia) that does has lower tax rates. Between this tax, high personal and corporate income taxes, franchise taxes, and overall over-regulation by state agencies, Delaware is increasingly threatening its “Incorporation Golden Goose” as Nevada and North Dakota work to take business from the state. This needs to be addressed.

5. Work to lower energy prices: Delaware has electric rates 25 percent higher than the states we compete with for jobs like nearby Virginia. We import close to one-third of our electricity from out of state, the highest rate in the nation. Some of this is due to our geography, but a lot of it is due to the state’s failure to build a network of natural gas pipelines from the Marcellus Shale to Delaware.

Coupled with the state’s participation in the Regional Greenhouse Gas Initiative (RGGI) carbon tax scheme and taxpayer subsidizing of “green” companies like Bluewater Wind (gone), Fisker Automotive (didn’t build cars in Delaware), and Bloom Energy (still has not brought the promised 900 high-paying full-time jobs), Delaware cannot grow its economy if energy prices are high. We want the Legislature to pass natural gas pipeline extension and end participation in RGGI and subsidies for “green” companies.

What issues do you think the state Legislature should focus on this year?

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