Legislators: Older Delawareans should pay more in school taxes

DOVER — Budget-writing lawmakers on Monday opted to reduce a property tax break for older residents and declined to vote on proposals to increase the amount that current and former state employees would pay for health care insurance.

The Joint Finance Committee, scheduled to continue meeting through next week to beginning crafting a final budget, convened for about five hours and cut approximately $51 million from a large gap between projected revenue and spending.

The cuts were directly based on Gov. John Carney’s proposal, but legislators left arguably the most controversial portion for another day, choosing not to vote on health care insurance costs.

Gov. Carney’s recommended budget included what amounts to a cut of $6.5 million for health care subsidies by shifting, on average, 3 percent of the costs to state employees. Delaware currently covers 90 percent of the costs for health care.

Under the proposal, monthly costs would rise by about $20 for a family in the First State Basic plan, $27 for a family in the CDH Gold plan, $35 for a family in the HMO plan and $77 for a family in the PPO plan.

Meanwhile, eliminating an arrangement that allows spouses who both work for the state to obtain health care insurance for $25 a month would save the state government $3.5 million.

The governor, a Democrat, has called the potential cuts a key part of slowing expenditure growth, but lawmakers in the Democratic-dominated legislature were not keen to make the changes Monday.

“There’s no way to tell at this point,” JFC co-chair Rep. Melanie George Smith, D-Bear, said of the likelihood of the changes being approved. “There’s no way to tell whether it’s frankly even going to be necessary, and that’s one of the reasons we’re waiting.”

The committee is expected to discuss health care insurance costs more next week.

Then Gov. Jack Markell proposed raising health care costs and changing plans the past two years, but his ideas were largely shot down by lawmakers amid public outcry.

JFC did reduce a tax break for senior citizens by 20 percent Monday, despite opposition from some members of the committee.

The state currently gives a subsidy of the greater of $500 or 50 percent to Delawareans who are at least 65 and have lived in the state for more than three years.

The subsidy is used to help offset local property taxes for elderly individuals, who generally do not have children in schools and thus receive no benefit from the school taxes they are forced to pay.

Gov. Carney proposed cutting the tax break to $400 and 40 percent, and legislators voted 9-3 to adopt his recommendation. The issue remains controversial, however, and JFC spent time discussing the pros and cons.

“Elderly people are on fixed income, and I think that we essentially had a contract with them when this bill was made years ago and I think it is wrong to take it from them,” said Rep. William Carson, D-Smyrna, one of three JFC members to vote against adopting the change.

A greater cut put forth by Gov. Markell in 2015 gained no traction in the General Assembly.

JFC made a number of other eliminations Monday, getting rid of 178.5 vacant positions and lowering the reimbursement rate for Medicaid dental services from 82 percent to 70 percent.

Funding given to nonprofits that provide services for the state, known as “pass throughs,” saw a 10 percent across-the-board reduction. Lawmakers did temporarily exempt the Modern Maturity Center, postponing a vote on the $2,600 the organization stands to lose.

“I think it’s kind of an outrage that we would be cutting Modern Maturity … when they’re already providing the service at roughly one-third the cost that the state agency is,” Sen. Brian Bushweller, D-Dover, said.

The Modern Maturity Center offers many services for seniors, such as day care and memory-loss programs.

Legislators also held off on $37 million in proposed cuts to school districts, a controversial part of Gov. Carney’s budget.

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