Lawmakers fail to pass budget, set to meet again Sunday

DOVER — Five months of negotiations wasn’t enough.

In an ignominious first for the Delaware General Assembly, lawmakers failed to pass a budget on the last day of the legislative session and entered fiscal year 2018 without a permanent spending plan.

With Democrats and Republicans bleary-eyed and at a stalemate early Saturday, the General Assembly and Gov. John Carney agreed to a temporary solution, funding the state government for 72 hours.

The bill was passed around 5 a.m. Saturday, allowing the state to continue offering services, paying its employees and funding nonprofits in the immediate future.

Legislators will return today at 1 p.m. in an effort to come to a consensus.

“The whole damn building’s disappointed right now,” House Speaker Pete Schwartzkopf, D-Rehoboth Beach, said around 2 a.m., after a vote that would have helped balance the budget failed. “This has never been done before. We’ve never, ever done this before.”

Governors have vetoed budgets before, most recently in 1977, but this marks uncharted territory.

Gov. John Carney

“I saw a lot of this kind of thing when I was serving in Washington and I’m very disappointed I saw it here in our great state,” Gov. John Carney, a former U.S. representative, said after it was announced a budget would not be reached Saturday.

Attorneys for both Democrats and Republicans were studying the Delaware Constitution in the lead-up to Friday in the event the General Assembly failed to pass a budget. That research was vital Saturday morning, when what once seemed impossible became a reality, leaving the state without a permanent budget.

Lawmakers were trying to pull together a deal at the 11th-hour because they could not agree on cuts and tax hikes despite meeting regularly behind closed doors throughout the entirety of the session to discuss the state’s fiscal planning.

The prevailing wage question

Gov. John Carney proposed closing a gap of nearly $400 million with an even mix of cuts and revenue, a plan largely supported by Democrats. Republicans, however, refused to vote for tax increases without substantial changes to state government.

Many issues came up, but prevailing wage was the sticking point.

Prevailing wage determines what laborers on state-funded construction projects are paid, and it often allows workers to earn several times what they would be paid on a private job. An electrician on a construction job paid for with state funds earns $66.85 an hour, while average hourly wage for an electrician nationwide is $27.24, for instance.

The wage is a serious issue for Republicans, who believe it is determined by a “rigged” process, but Democrats have refused to budge and alter a law they feel helps middle-class families.

Without changes to prevailing wage, Republicans would not agree to back income tax increases, and with the Democratic Party lacking the three-fifths supermajority needed to raise taxes, the GOP has leverage.

The minority caucuses introduced bills to suspend the wage, but after months of negotiations, Republicans compromised Wednesday, suggesting a plan that would instead impose greater regulations on how prevailing wage is determined.

Democrats, however, balked at another portion of the Republican proposal: placing a one-year expiration date on an income tax increase.

The measure “simply kicks the can down the road once again,” Democratic leaders said.

Democrats attempted to apply political pressure Wednesday by eliminating grant-in-aid funding for nonprofits in the budget, leading to volunteers, employees and service-recipients of various not-for-profit organizations protesting outside Legislative Hall.

The Delaware Senate meets on the final regularly scheduled day of the General Assembly on Friday. Delaware State News/Marc Clery

Thursday night, Democrats upped the ante, combining income tax increases and grant-in-aid funding into one bill. The measure, introduced in the House, would have raised taxes on individuals earning more than $60,000, created a new bracket of more than $150,000 and halved itemized deductions and then used that money to fund grant-in-aid at 80 percent of the level in the fiscal year that ended June 30.

Democratic leadership was hopeful a few Republicans would throw their support behind the bill, generating revenue that would go to nonprofits, but the move infuriated members of the House Republican caucus.

Upset at legislation representatives felt was sprung on them, and protesting the fact the bill was voted on just 30 minutes after it was introduced, Republicans walked out. Because grant-in-aid needs a three-fourths supermajority, the bill failed along party lines, with one Democrat voting no for procedural reasons.

House Democrats tried again around 1:30 a.m. Saturday, separating the income tax proposal into a separate bill. Once again, the bill failed — but for different reasons. While the Senate cannot pass tax bills without support from both parties, such measures can pass the House if the Democratic caucus sticks together.

That didn’t happen Saturday.

Rep. Andria Bennett, D-Dover, broke with her party, saying her constituents did not support provisions halving itemized deductions.

“They don’t elect me, right?” an emotional Rep. Bennett said of her caucus members after the vote. “The people of my district (elect me). So, you know what, is everybody upset with me? Absolutely. Am I the only Democrat? Absolutely, but what am I going to do? They don’t put me here. These people in my district put me here. I have to listen to them. I can’t listen to being bullied by these people.”

Tearful, she then walked away.

Members of the House paused deliberations after the vote to go into their separate closed-door caucuses, while the Senate continued to debate legislation.

Even in the dead of night, Legislative Hall was buzzing, although the tenor was different than in many past years. The leaders of each caucus were in and out of Gov. Carney’s office throughout the night and morning, but they could not come to an agreement.

Finding little appetite for a budget that did not include nonprofit funding, House Democrats opted not to bring the bill to the floor.

Just shy of 4 a.m., representatives returned to the House chamber, and Gov. Carney announced legislators would be giving up pursuit of a budget for the time being.

High stakes and tensions high

Republicans have pushed for cuts but were unhappy with the decisions made the Joint Finance Committee Wednesday, blasting them as blatant political theater. Their counterparts across the aisle may be in the majority, but they could not craft a budget they liked and were unhappy with the idea of passing a poison-pill budget.

“While I believe we have a constitutional responsibility to pass a balanced budget, I also believe we have a moral responsibility to ensure that the budget we pass is fair and just for the people of our state,” Senate President Pro Tempore David McBride, D-Wilmington Manor, said in a statement. “It became clear to me and other members of leadership that despite the progress made today, we were not yet in a position to deliver on our promise of a fair budget at this late hour.

Senate President Pro Tempore David McBride on the floor on the final day of the General Assembly. Delaware State News/Marc Clery

“The budget, in its current form, is not something we can pass in this General Assembly. And nor should we, particularly when the state’s fiscal calendar gives us a handful of days to continue working to get a better deal for Delawareans without inflicting immediate pain on our residents, non-profit community or our state employees. We know time is of the essence, and that’s why we are coming back here tomorrow to keep pushing forward.”

Tensions between the two sides — and Republicans and the governor — remain high, with longtime political observers calling it unlike anything they have ever seen in Legislative Hall.

Asked Thursday if the vaunted “Delaware way” — a political viewpoint founded on cooperation and selflessness, according to many Delaware politicians — still exists, Rep. Schwartzkopf intimated that frustrated Democrats had opted to play hardball.

“Well, we tried the Delaware way for five months,” he said. “We were this close to doing something positive in this building when they chose to turn around and walk away. Why don’t you ask them if that’s the Delaware way?”

Republicans introduced legislation Friday night that would have provided grant-in-aid funding by making a 1.1 percent cut to all state agencies, shifting additional costs of state employee health care onto workers and using funds from the regional Greenhouse Gas Initiative, but Democrats did not call the bills up for a vote.

“I don’t know what we need to do to get an agreement with the governor,” Senate Minority Leader Gary Simpson, R-Milford, said in a statement. “We approached the situation with creativity and flexibility, offering several different packages.

“We even offered to drop our proposals to reform prevailing wage, in exchange for checking government growth, holding the line on taxes and maintaining needed services for Delawareans. It’s profoundly disappointing this did not get done.”

Frustration boiled over early on when Sen. McBride engaged in a loud argument with Sen. Colin Bonini, R-Dover, shortly after the Senate went in around 7:30 Friday. Sen. Bonini was unprepared to discuss a bill he is sponsoring and attempted to table it, and a Senate attorney had to be called to settle the issue of whether a motion to table a bill could be shot down.

Senate Minority Whip Gregory F. Lavelle, R-Sharpley, was all smiles on the first day back for legislators. (Delaware State News/Dave Chambers)

Senate Minority Whip Greg Lavelle

Other Republican and Democratic senators engaged in a debate over transparency at one point, angering Republicans who were already frustrated the Senate started business three hours later than the House and was delayed in posting a public agenda.

In the House, an attempt to run one final bill before breaking for the day failed when Republicans warned Rep. Schwartzkopf they would not back the measure, which would make the upcoming Aug. 4 Barack Obama Day.

Despite the bad blood between Republicans and Democrats, lawmakers did speak of a desire to work together.

But while Gov. Carney believes there will be added pressure on lawmakers to pass a budget, it remains to be seen if either side will be more willing to bend.

Democrats have shown no signs of caving on prevailing wage, and Republicans believe Democrats have tried to “bully” them. Gov. Carney in particular has been in the minority’s crosshairs of late.

“The governor’s failed the state of Delaware today,” House Minority Whip Greg Lavelle, R-Sharpley, said Saturday morning.

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