Delaware's prospects aren't so rosy (Whipple)

According to a recent column by Gov. John Carney (7/21/19), the state government is making encouraging progress in several key areas including improving schools (more high school students are graduating, never mind that SAT scores show many of them are not college ready) and responsibly managing taxpayer dollars.

In the latter regard, it’s said “Delaware is on sound financial footing just two years after climbing out of a $400 million budget deficit.” Thus, in the state’s latest budget “we set aside $125 million in reserves to guard against budget cuts and tax increases the next time we face an economic downturn,” which is “in addition to the $250 million Rainy Day fund.”

If government spending is allowed to continue growing faster than the state economy, however, this relatively comfortable state of affairs won’t last long. And to make matters worse, billions of dollars in unfunded obligations (notably post-employment healthcare benefits for state employees) have accumulated that will come due in due course.

Barring major policy changes, periodic tax increases will be inevitable in coming years. It would be helpful if the state’s political leaders provided a more realistic assessment.

William Whipple III

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