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Archive for the ‘DelawareSpends’ 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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Delaware spends more than 46 other states for per-capita spending per resident, at nearly $9,800 per person per year (National Association of State Budget Officers and the Kaiser Family  Foundation). The News Journal decided to explore this topic in an editorial:

Tax dollars not buying progress for Delaware

How much is it going to cost?

That’s a question we ask ourselves almost daily, whether we’re at Wawa for gas or on amazon.com for, well, you name it.

That’s a question we rely upon our lawmakers to answer when it comes to the major issues facing Delaware.

Lawmakers asked those questions on Thursday.

First, the Board of Education declined to approve the Wilmington Education Improvement Commission’s plan in part because board members want clearer cost estimates.

Then, after Gov. Jack Markell’s final State of the State address, some lawmakers wondered if taxpayers are already spending too much on education.

Based on the health of our state, the question shouldn’t be “How much is it going to cost?” Rather, we need to start asking “What are we getting in return?”

Indeed.

Let’s hope this year our public decision-makers figure out how to balance thew budget without negatively impacting our lives or the future of the state.

Do you believe we’re getting our money’s worth from state spending? Why or why not?

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Every once in a while we at CRI like to think about economic freedom issues that don’t directly relate to our mission. One such story which showed up in our chilly, soon-to-be-snow-covered inboxes is this one on DelDOT helping the Newark Police patrol the roads near Exit 1 and the Maryland border (route 896, Christiana Parkway, Route 40) where some truckers have been known to exit the highway and then rejoin I-95 about 2 miles away without paying the toll.

Barring the unusual traffic delay this move adds maybe 10 minutes to one’s commute in exchange for saving $4 in tolls. Clearly a large number of truckers believe adding 10 minutes to their commute is worth saving $4 for. So how does the state respond? by hiring more “enhanced” enforcement of toll evasion by heavy trucks and commercial vehicles along Newark-area routes restricted to local deliveries only. The enforcement will be more infrequent but they will reserve power to pull trucks over and check the drivers’ records to make sure they are on local roads on their way to make a local delivery.

Now from a locals’ point of view, trucks block lanes, wear down roads, and slow down normal traffic flow, all so a trucker can save $4 in toll fees. It should not surprise anyone then that keeping trucks who are not making local deliveries off the roads would be popular in the Newark area where this is occurring. From the article:

“During the first two months of patrols in November and December, state troopers and Newark officers conducted 386 total inspections, according to DelDOT.

Police took at least five trucks and nine drivers out of service due to violations in that time, said DelDOT’s Brian Motyl, assistant director of finance. Overall, they issued 179 citations, including weight, equipment, licensing and registration-related issues. Data for January was not yet available.”

That’s a lot of inspections! Over six a day, holidays included. There were nearly three citations issued a day. Each citation carries a fine ranging from $77-$95 and two points on the driver’s license. DelDOT says it’s spent $60,000 through January 31 on the enhanced enforcement; using the $95 fines for every citation issued, the state took in $17,005. That’s a loss of roughly $43,000 going by the math alone, and that’s if every ticket issued was for the maximum amount. On the other side getting heavy trucks off local roads might save money on construction repairs since heavier truck usage requires more repair work done but given New Castle County’s astronomically high Prevailing Wage rates any savings from fewer repairs would be wiped out by the PW and the cost of enforcing this program long-term.

We can safely conclude using this enforcement is costing the state more money than it takes in from citations or from forcing these “toll dodgers” to pay $4 at the toll booth. The article mentions an uptick in tolls collected from commercial traffic but notes tolls collected from larger vehicles has been down for some time. Now the enforcement campaign could pressure truckers to pay $4 rather than risk a $95 fine and points on the license might scare some truckers into staying on the highway, but now we move into the morality: is this way of enforcing laws an aspect of a free society? Having police do random checks for papers to make sure you comply with the local ordinance? Suppose the state lowered the toll to $2. Might that discourage all but the most toll-evading of truckers to just pay $2 rather than dodge the tolls, a move which would save the state tens of thousands of dollars on road repairs and enforcement?

Let’s hear your thoughts: Do you support this enhanced enforcement program? Or should the state try alternative means to discourage truckers from leaving the highways?

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The official posture of the De. State Government is that Delaware has a state-sponsored health insurance exchange, Chooseheathde.com. The Supreme Court and the federal Department of Health and Human Services (DHHS) say otherwise, that Delaware has a federal exchange. Why does this matter?

It matters to the 90% of the people who purchased their health insurance through the DE exchange and received a tax subsidy. It also matters to the other 5 million people in the US who did the same. If the Supreme Court decides FOR the plain language of the Affordable Care Act in the King v. Burwell case, which will be heard in March, and upholds the ACA, which is likely, then those aforementioned people lose their subsidy, and likely their insurance, and may have to refund the IRS in their next tax filing for 2014 and 2015. They would be retroactively declared in default of their policy and therefore responsible for their health care costs directly.

The case is very likely to be ruled in favor of the legislation as written, that on January 28th the House Committee on Energy and Commerce requested the contingency plan in writing for the expected ruling from the Supreme Court. The same question put to the office of the Insurance Commissioner and the state Department of Health and Social Services referred me to the Federal DHHS and Sylvia Burwell for answers. Whereas the federal government has a contingency plan should the Supreme Court rule in favor of the plaintiffs in King v. Burwell, Delaware does not have one.

The only possible interpretation of this is that Delaware does not have a state-sponsored exchange and therefore is financially vulnerable to the outcome of the Supreme Court case. The state government should be aggressively making contingency plans for this outcome which will affect not only the thousands of Delawareans who are relying on tax subsidies to cover the cost of insurance plans purchased through the state exchange, but also for our state’s budget, should the cost of health insurance be dumped onto Dover from Washington D.C.

Chris Casscells, M.D.

Director, Center for Healthcare Policy

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Just recently CRI began a campaign to keep Transparent Delaware, our government payroll and vendor contract data website, open to the public by asking people to donate towards our goal of $5,000.

https://www.indiegogo.com/projects/help-keep-government-spending-data-open-to-all/x/9753455

Our campaign pitch:

“We operate the website Transparent Delaware, which provides the public with open data on state payroll spending and state vendor payments. Want to know who the highest paid state employees are, by division or year? We have that. Want to see why an employee who was given a $60,000 base salary received $164,000 is overtime and “other” pay? We have that too.

We would like to obtain state pension data but we have been blocked multiple times in our efforts to find out how much the state spend on employee pensions. While we recognize that state workers are human beings too the fact is, it’s our money and we should know how it’s being spent. With extremely few exceptions government spending data should ALWAYS be open to the public.

What we need from you: It costs us about $5,000 a year to keep Transparent Delaware open to the public. All money collected for this campaign go to paying our web developer and host to keep the site up, or else we’ll have to shut it down :(. The exception is if you reach a donation threshold, we will send a small gift of thanks.

Even if we do not meet the $5,000, the more money we receive towards this goal, the more we can pay our web developer to keep the site open. They are great people but they have bills to pay too!”

As many before us have stated, “freedom isn’t free.” Now generally people who use this line are nearly always speaking about military service and the need for people to make some kind of meaningful sacrifice to keep our freedoms alive. But this axiom should apply as well to keeping information about our government available to the public.

We have to pay our web host and site developer, and while they may be awesome people they have bills to pay too. Understandably many people are used to internet content being free or “freemium” and the more successful web pages can place ads on the site to make money, but we are a non-profit and we cannot, and will not, rent our website space over to advertisers. Thus, we need the generous support of people like you to help us reach our goal and keep Delaware state payroll and vendor data available to the public.

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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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2015 will soon be upon us and for those who are passionate defenders of freedom and liberty our work just goes on when the clock strikes midnight. Here is CRI in review and our goals for 2015:

  • Dave Stevenson’s lawsuit against DNREC and former DNREC Secretary Collin O’Mara is still ongoing. Dave and the other three plaintiffs, including CRI Director John Moore, won standing to continue their lawsuit. We will refrain from making a prediction on a court ruling less we jinx the lawsuit but we are optimistic the Plaintiffs will win. This is because in order to get standing the Plaintiffs had to prove they had a valid reason to sue in the first place, such as being aggrieved by the Defendants actions. Winning means stopping DNREC from changing the rules on how many carbon permits can be sold at carbon auctions, saving Delaware taxpayers over $100 million a year in increases in utility bills.
  • We testified in favor of HB353, the Parent Empowerment Education Savings Account Act (PEESAA). Jim Hosley, our former CEE Director, spoke in favor as did a dozen Wilmington parents and grandparents (and one student!) and the leaders of Tall Oak Classical Academy. The bill was tabled in the House Education Committee, a move we are unfortunately not surprised by. However, we hope 2015 will be a better year as more and more people realize the need to improve Delaware’s education system, and the only effective way to make the changes our students need to be prepared for the future is to provide parents with school choice options to do what’s best for the child. CRI will always maintain the belief that parents and/or legal guardians can make a better choice about their children’s education than politicians and bureaucrats in the state Department of Education.
  • We brought in Dr. Bartley Danielsen, business and economics professor from North Carolina State University to keynote our Sixth Annual Dinner. Dr. Danielsen has proposed a theory tying in environmental benefits to school choice. The basic theory is, parents moved to the suburbs to flee poorly performing public schools which left a lot of people uneducated and unable to find respectable work, and many turned to crime as a result. His theory is if inner city schools were to improve their quality, many families would move back to the cities from the suburbs and the result would be a reduction in traffic and environmental pollution from people driving from the suburbs to the cities. View is presentation here and here

In addition to these challenges, we still have issues Delaware must resolve in order to improve our economy:

  • End to the prevailing wage which makes public construction costs so expensive many end up getting no work at all. See: Rockwood Museum.
  • A Right to Work law for Delaware. Union leaders are pushing the “scab” theory that somehow union members will drop out and reap all the benefits the union “works” to get. We have responded by noting that a) manufacturing businesses have responded by moving factories elsewhere, depriving Delawareans of job opportunities. See: loss of auto industry, Valero plant, Evraz Steel plant, Georgia Pacific plant. b) as a moral issue, should union bosses have the right to take someone’s money just because someone works at a particular location? What if the union bosses don’t serve their member’s needs, such as organizing or donating to political causes or candidates the members don’t support?

We wrote: “While in the short run unionization may force wages up for those involved, in the long run closed shops reduce capital spending and induce the out-migration of jobs and workers.”

Read HERE and HERE and HERE

  • tax reform. Delaware is one of just five states with a gross receipts tax (tax on sales, even before factoring in profit/loss and expenses). Three of the other four don’t have an income tax and the only state with both like Delaware is Virginia who has lower tax rates. Coupled with high corporate and personal income taxes while Nevada and North Dakota compete with us for corporate business, and without reforms we will see money and jobs leave the state at even higher numbers.

Merry Christmas, Happy Hanukkah, Happy Holidays, and a Happy New Year to all. Let’s be thankful for a good 2014 and hope for better things in 2015.

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