War in the General Assembly? Reps furious after Dems attempt income tax hike

DOVER — In an unprecedented move, House Democrats introduced legislation a few minutes shy of 11 p.m. Thursday that would raise income taxes and restore nonprofit funding, leading to every Republican representative leaving the chamber.

Republicans returned a few minutes later, but the measure, which requires a supermajority to pass, failed, and the possibility of lawmakers leaving the state capitol in the early morning of July 1, the first day of the new fiscal year, without a budget grew.

Pete Schwartzkopf

Thursday’s vote, Republicans fumed, was an “outrage,” and “b——t.”

“This is the epitome of everything we should not be doing,” Minority Leader Danny Short, R-Seaford, said on the floor.

The bill was defeated, with House Majority leader Valerie Longhurst, D-Bear, voting no for procedural reasons. Every Republican left the chamber before the vote.

House Speaker Pete Schwartzkopf, D-Rehoboth Beach, said afterward he wanted to get the vote on the record.

“We have talked about these issues for five months. We have been in private meetings … for five months. This is not new to them,” he said of Republicans. “The only thing that’s new to them is what’s put into the grant-in-aid bill because we need to show the people out there that this money’s directly tied into restoring the cuts for grant-in-aid.”

Asked if House Democrats, Senate Democrats or the governor’s office came up with the plan to combine the two proposals, Rep. Schwartzkopf said he did not recall and noted he had been in several budget meetings throughout the day.

He said the vote would have taken place about three hours earlier but Legislative Hall’s computer system was down, preventing lawmakers from printing the bill.

Democrats are still hopeful a budget can be passed today or in the early hours of July 1, but their move could backfire: Republicans appeared more resolved than ever as they left the building around 11:30.

Democratic lawmakers suspended rules, introducing the bill on the floor, conducting a 10-minute committee hearing and then voting directly on the proposal.

Danny Short

The process left Republicans outraged. Members of the GOP protested they did not have time to read and comment on the bill, and they accused Democrats of playing politics by tying grant-on-aid to income tax increases.

“This bill has not been through the Joint Finance Committee process and is being railroaded through this chamber,” Rep. Short said. “This is a sham of the committee to hold a public meeting without any public comment. I’m really ashamed that we’re doing (this).”

The Democratic grant-in-aid bill would provide $36.4 million for nonprofits, a 20-percent cut from the current year’s total of $45.9 million. All nonprofits, including fire companies, senior centers and veterans’ organizations would absorb the decrease evenly.

The Joint Finance Committee on Wednesday zeroed-out grant-in-aid to balance the budget, triggering protests by nonprofits.

The tax hike proposed by Democrats late Thursday would create a new top bracket of all income above $150,000. Income between $60,001 and $150,000 would be taxed at 6.8 percent, up from 6.6 percent currently, and a 7.1 percent tax would be levied on income exceeding $150,000.

Itemized deductions would be halved under the measure, a compromise based off Gov. John Carney’s proposal to completely eliminate them.

The bill would also increase the eligibility age for some tax credits from 60 to 65 in one-year increments. It would generate about $55 million next fiscal year.

Legislative Hall

“By linking it to the grant-in-aid package, there’s several of them over there that do want to vote for it, because they want to vote for grant-in-aid,” Rep. Schwartzkopf said, referring to his hope some Republicans would have voted for the bill.

Rep. Melanie George Smith, D-Bear, the co-chair of the budget-writing committee, laid out the stakes before the tally: “The money we vote tonight will save lives,” she said.

But furious Republicans, who have spent months working toward a budget compromise with Democrats, refused to take the bait.

The GOP unveiled a proposal earlier in the day that would have raised some taxes, made cuts to state employee health care and changed prevailing wage. Democrats, however, rejected the plan, protesting the prevailing wage alterations and the planned sunset on the income tax hike.

Senate Republicans plan to file their own version of the grant-in-aid bill today.

The two parties spent part of Thursday taking aim at one another through press releases, seeking to cast blame for the elimination of grant-in-aid and potential failure to pass a budget.

Republicans called Democrats “self-serving” and accused them of “buying votes,” while Democrats argued Republicans are more focused on winning elections “than helping our state overcome its economic challenges” and their plan “kicks the can down the road once again.”

Gov. Carney, a Democrat, was not exempt from GOP criticism, with House Minority Whip Deborah Hudson, R-Hockessin, saying she was “still trying to get the tire marks off (her) dress from being tossed under the bus by the governor’s office” in budget talks.

If lawmakers cannot agree on a budget, they would need to pass a resolution to temporarily fund the government. Such a step is unprecedented, however, and questions remain about the exact procedure.

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