Carney vetoes 2 tax bills sponsored by fellow Democrats

DOVER, Del. — Delaware Gov. John Carney vetoed two tax bills sponsored by fellow Democrats on Friday after being forced to take action on the measures.
One bill would have converted a $400 school property tax credit for senior citizens to a refundable income tax credit based on eligibility.
The second bill changed Delaware’s earned income tax credit program, which allows low-income workers a nonrefundable credit of up to 20 percent of the corresponding federal earned income credit. The bill would have made the credit refundable, meaning a person could get a tax “refund” even if he didn’t owe any tax, while limiting the credit to 5.9 percent of the corresponding federal credit.
Both bills were passed months ago on the last day of the legislature but were not sent to Carney until this week, giving him 10 days to veto them, sign them or allow them to become law without his signature.
“It’s a long-standing custom for us to hold bills until the governor calls for them to take action,” House

Pete Schwartzkopf

Speaker Pete Schwartzkopf said in an emailed statement. “However, we have a constitutional obligation to present all bills that have passed to the governor for action, whether that’s a signature or veto.”
“Our first obligation is to following the constitution and to our members. Their bills overwhelmingly passed the General Assembly this year, and action needs to be taken on them,” added Schwartzkopf, D-Rehoboth. “The clock was running out, so we made the decision to send them to the governor to either sign or veto them.”
Had Democrats not sent Carney the bills, they could have quietly died at midnight Nov. 6, which, as Election Day, marks the formal, final adjournment of this year’s legislative session.
“The governor takes his obligation to review legislation extremely seriously, particularly when considering a veto,” Carney spokesman Jon Starkey said in an email. “These bills would have had a real impact on the lives of Delawareans, and the governor believes it’s more important to take a little more time and make the right decision, rather than making a decision based on political pressures or timelines.”
Carney said making the earned income tax credit refundable for some low-income workers would result in a tax increase on about 35,000 families.
“This would significantly hamper the progress these families are making toward getting ahead and reducing their reliance on other government programs,” Carney wrote, adding that he supports expanding availability of the credit, but not at “significant cost” to families already benefiting from it.
Rep. Paul Baumbach, chief sponsor of the bill, said Carney’s reasoning was flawed.
“I remain unpleasantly surprised that the governor is unwilling to provide fairness to tens of thousands of working poor Delaware residents,” Baumbach wrote in an email.
“The governor’s stated justification, related to the shifting of dollars from some working poor residents to another, is unsound,” Baumbach added.  “The current program assists about 35,000 low-income working families, but it abandons about twice as many low-income working families, families that the federal EITC program assists. This bill would have evened the playing field, providing all Delaware low-income working families the same match of their federal EITC.”
Baumbach, D-Newark, vowed to continue pushing for passage of the legislation, which received bipartisan support.
Meanwhile, Carney said the bill converting the senior property tax credit to a means-tested income tax was a well-intended effort to stabilize costs but flawed in several ways.
Forcing taxpayers to request a refund after paying the property tax would create cash flow and filing burdens, especially for seniors who do not meet the minimum income threshold for filing income tax returns, Carney suggested. He also said that although considering means-testing for tax preferences is appropriate, it should be done in the aggregate, and not in isolation.
Rep. Kim Williams, chief sponsor of the bill, said she was “extremely disheartened” by Carney’s veto.
“My legislation, which passed with broad bipartisan support, would have stabilized and protected this credit, preserving it for years to come,” Williams said in an emailed statement. “As seniors are on track to make up nearly one-fourth of the state population by 2020, this kind of reform is desperately needed. Costs for the program are projected to grow to $46 million by 2025, five times more than its original price-tag.”

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