Budget vote stalled, frustrations high

 

DOVER — As of 10:30 Thursday, the second-to-last day of the fiscal year, representatives were still waiting to take the floor to vote on bills raising taxes. Democrats and Republicans did not have a deal for balancing the budget, increasing the possibility of the General Assembly exiting the state capitol in the early morning of July 1 without a finished budget.

Republicans were anticipating Democrats introducing legislation that would hike taxes on income, with the vote expected to fall along party lines.

As lawmakers return today, many questions persist, and distrust between the two parties remains strong.

Lawmakers attempted to negotiate a deal earlier in the day but could not come to an agreement. Republicans unveiled a compromise proposal Thursday that would raise taxes on income, alcohol and tobacco, make cuts to state employee health care and fund grant-in-aid, one day after the Joint Finance Committee balanced the budget by zeroing out grant-in-aid.

Democrats, however, were unwilling to support the plan, with House Speaker Pete Schwartzkopf, D-Rehoboth Beach, saying in a statement it “simply kicks the can down the road once again,” and Senate President Pro Tempore David McBride, D-Wilmington Manor, calling it “the epitome of political theater and 11th-hour gamesmanship.”

The budget created by JFC is set to be voted on today, but its fate remains in limbo: Although lawmakers of both parties approved most of the cuts, opposition is coming from both sides of the aisle.

Democrats may be willing to bite the bullet and vote for a budget they dislike in order to keep state services running for another year, but it would only take one Democratic senator or five Democratic representatives to derail the bill if no Republicans back it.

The spending plan was finalized after the Democratic-led budget-writing committee cut $88 million Wednesday, closing a shortfall. Among the votes was the elimination of all funding for grant-in-aid, which provides funding for nonprofits and totals $45.9 million in the current year.

The vote triggered mass complaints from nonprofits, volunteers and supporters of whom rallied outside Legislative Hall Thursday.

Republicans have been pushing for changes to prevailing wage, which governs the pay given to workers on state-funded construction projects, but following months of negotiations, the party appeared to compromise Thursday.

Their proposal would raise taxes on alcohol, tobacco and personal income, which Democrats have pushed for. Unlike Gov. John Carney’s recommendations, the Republican plan would not eliminate itemized deductions, which means it would bring in much less money. It also includes a provision that the income tax hike would expire in one year, although Senate Minority Whip Greg Lavelle, R-Sharpley, said Republicans would be willing to vote to extend the increase if Democrats commit to stemming the growth of government.

Under the plan, the surveys filled out by government contractors, which set prevailing wage, would be accepted by the Department of Labor only when the construction company that pays wages returns the form, and companies would not be allowed to submit more than one survey per job. Republicans say union shops complete a survey for every step of the job, skewing the wage rates.

Rates for certain jobs, such as bricklayers, painters and sprinkler fitters, have been locked in since the passage of a 2015 bill. The Republican strategy would allow the rates to change every year based on the survey results.

The GOP proposal would adopt Gov. Carney’s recommendations for employee health care cuts, part of what the governor has called necessary structural reform but was approved in a watered-down form by JFC.

A $15 million cut in funding to school districts, first presented by Gov. Carney and included in the budget Wednesday, would be undone under the plan. A $22 million decrease in funding would be kept, however.

Republicans are pushing a bill, which Democrats have signed onto, to study costs and look for ways to save money in state government. Because of distrust of the Democratic majority, members of the GOP are insistent on including promises that recommendations from the reports will be followed, not ignored.

Although not included in the final plan, Republicans also suggested using money from the Delaware Sustainable Energy Utility to balance the budget.

Democrats appeared caught off-guard by but hostile to the budget proposal, taking exception to the proposed tax sunset.

“I told them here that’s unacceptable. I’ve said from day one and I mentioned it to them, they know, that I’ve told thousands of people that I was looking for a sustainable solution, a responsible solution,” Gov. Carney said. “They all know what’s responsible. Some of those folks have expertise in finance, have their own organizations and you don’t have a one-year tax deal.

“When I was in Washington, if I had a nickel for every time a Republican said to me they want consistency in the long term around tax policy and regulatory policy, I’d be a millionaire, and that’s exactly what my budget provides. So, to say we support you as long as you do something we know you can’t do is not support.”

Republicans fired shots at Democrats earlier in the day, decrying what a GOP news release called “deplorable actions” by the Democratic majority.

“Democrats control the entire process,” House Minority Leader Danny Short, R-Seaford, said in a statement. “They hold an 8 to 4 majority on the budget-writing Joint Finance Committee and have crafted a spending plan especially designed to create maximum pain in an obvious attempt to bludgeon the minority into submission. If they want to pass this disgraceful sham of a budget, they will do so without a Republican vote and they will be solely responsible for the consequences.”

Democratic lawmakers have refused to change prevailing wage, which Republicans say drives the cost of projects up by 24 percent. Members of the GOP have introduced three bills that would suspend prevailing wage on different projects, but the measures have languished because of opposition from the Democratic majority.

Under the wage, an electrician on a state-funded construction job in Delaware earns $66.85 an hour. The average hourly wage for an electrician nationwide is $27.24.

Republicans have alleged the process that sets the rates is rigged, calling it “an incestuous relationship between ruling Democrats and their political allies in the state’s labor unions.”

The minority has also dropped the word “corruption,” seeking to paint Democrats as the villains.

Democrats, for their part, blame Republicans for the elimination of grant-in-aid.

“The Democrats are ready and willing to vote for revenue that would offset these cuts,” Rep. Schwartzkopf said.

Despite his displeasure with the budget, he said he will vote for it because it is his “job.”

Asked if he would sign the budget, Gov. Carney said he does not support the spending plan, but he did not say if he would exercise his veto power for the first time. The governor canceled a scheduled meeting with lawmakers Thursday afternoon, saying in a statement Democrats are “serious about moving forward when” Republicans are.

As the night dragged on, legislators continued to wait, unsure of when they would exit the building — and of what the path forward looks like.

Reach staff writer Matt Bittle at mbittle@newszap.com

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