Tax hikes won't fix budget woes (Kevin Dombrowski)
According to the lead-in, DE spends approximately $11B per year to fund the state government. Of this, about $4B "is related to the General Fund" and half of the $4B is paid by someone else, e.g., the federal government and "exported revenue and user fees." One might like to know more about the other $7B, but this part isn't explained. According to the National Association of State Budget Officers, DE spends the second highest per capita on state expenditures ($10,751) - more than double the national average. Also, there are some big items on the balance sheet according to Pew Charitable Trusts: $5.6B in unfunded retiree healthcare costs, $11B in unfunded state pensions, and $2.3B in outstanding debt. And with the top income tax rate already standing at 6.6% (2x PA), tax increases don't look like a great idea. Compounding the First State's problems, some affluent folks are moving out of the state, casino revenues and unclaimed property revenues are dwindling. Clearly, a restructured system with meaningful limits on spending and broader source of less erratic revenues would be nice. "Fortunately for Delaware, we have state officers studying this issue." To learn more about what is going on, please join us at one of our Revitalize Delaware events.