First State Times

State legislators debated restoring a tax subsidy reduction for seniors, age 65 and older, to the level it was three years ago in a committee meeting.

Led by Rep. Mike Ramone, some committee members on the Joint Committee of Capital Improvement said the subsidy on a school property tax, which was cut from $500 to $400 in 2017 should be made $500 again, according to Delaware State News. Ramone said state revenue projections for the current fiscal year have risen $200 from September to now. The fiscal year ends June 30.

Gov. John Carney and a group of legislators are against the change to the subsidy, or at least against changing it in the committee or as a singular tax measure. 

Sen. Dave Sokola (D-Newark) said the action should be decided in legislation in the whole state house and senate, not in a committee. 

Ramone countered by saying the 2017 cut was made by the Joint Finance Committee. He also said he put forth a bill on the same issue in 2019 and it hasn’t had a committee hearing.

Mike Jackson, director of the Delaware Office of Management and Budget, said the action is not in the Joint Committee of Capital Improvement’s precedent or purview. 

Gov. John Carney vetoed a bill to make the subsidy means-tested, or not applicable to anyone with an annual income $50,000 or more, in 2018. The governor declined to comment for an article in the Delaware State News.

“While I believe it is appropriate for the state to consider means testing tax preferences to help broaden the state’s tax base, we should look at these preferences in the aggregate and not in isolation, developing a streamlined and consistent means test,” Carney wrote in a letter explaining the veto in 2018. “This approach would also help avoid the tax benefit ‘cliff’ contained in this legislation, where $1 of income in excess of the income means test results in the loss of the entire potential $400 benefit.”

The subsidy was enacted in the 1990s. It is meant to discourage seniors from voting against referendums for additional education and capital project spending.

Ramone withdrew his motion. Jackson said the governor was planning to release a recommended budget later in January and said Carney would agree to look into the subsidy.