Task force considers new taxes to clean Delaware waterways

DOVER — A coalition of state government and business leaders is debating the creation of several new fees to raise money to clean up Delaware’s waterways.

Several participants are objecting to the proposals by saying small businesses and residents in Delaware are already paying enough in taxes.

The Clean Water and Flood Abatement Task Force, formed by a General Assembly resolution, has for several months been exploring ideas to develop a fund to be used for water projects.

The current proposal would add a $35 fee to income tax filings, a $75 charge to business licenses and an additional $180 cost to the Gross Receipts Tax, an expense paid by companies based on a percentage of revenue.

It is estimated the new taxes would take in about $22.4 million annually.

Sen. Bryan Townsend

Sen. Bryan Townsend

Sen. Bryan Townsend, D-Newark, the main supporter of the initiative, argues the state as a whole would benefit from additional money going toward water.

“At the end of the day, this is a question of the role of infrastructure in our economy, all the different people in Delaware who participate in the infrastructure-based economy and how, on infrastructure, whether it’s waterways or roads, we and much of the rest of the country just don’t do investment anymore,” he said.

“We don’t invest. And you can measure that based on bridge degradation, road degradation, water quality, flooding. There’s all kinds of ways to measure that.

“So at the end of the day it’s very much sort of how do you acquire and pool resources, how do you spend it in a way that will benefit the broader community economy.”

The plan was discussed for two hours Wednesday at a task force meeting, with a general consensus in favor of the proposal.

A few panel members raised concerns.

“At some point, when you keep taxing the small-business guy, the one that’s carrying the load in Delaware, people are going to go to other states,” said Rep. Ronald Gray, R-Selbyville.

Rep. Gray and Sen. Bryant Richardson, R-Laurel, argued in favor of moving existing funds around to serve the purpose rather than imposing new costs on taxpayers.

They, like many Republican lawmakers, believe state government is too large and needs to be willing to make cuts in some areas to support initiatives elsewhere.

Rep. Gray raised concerns that Delaware residents would become hesitant to start small businesses because of the increased costs associated with them, a notion Sen. Richardson seconded.

“How much more can you increase taxes without further damaging the economy?” the senator said.

Other task force members were largely in favor of the proposal.

Patty Cannon of the Delaware Economic Development Office advocated for funding the clean water account in part with charges added to the gasoline and public accommodations taxes.

Those taxes catch many out-of-state visitors, meaning some of the costs would be shifted away from Delaware residents.

“I think most people, whether the average citizen filing taxes or a business of any size, would be able to support it at less than 10 cents a day,” she said of the proposed $35 fee that would be added to the personal income tax.

Supporters are working to create a list of projects in hope of shifting the discussion from the theoretical to the practical.

Sen. Townsend said he plans to introduce a bill soon after the task force finishes discussing the idea next month.

Republicans are expected to oppose the proposal. and with Senate Democrats falling short of the three-fifths supermajority needed to pass tax increases, their dissension is no small matter.

Despite that, the main sponsor is hopeful.

“I’m confident Democrats and Republicans both care about clean water,” Sen. Townsend said. “I can’t imagine a more informed, comprehensive solution than what this very diverse task force has developed.”

Reach staff writer Matt Bittle at mbittle@newszap.com

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