First State Times

The Delaware Economic and Financial Advisory Council revealed the state currently holds a $200 million budget surplus after revenue projections earlier this year. 

As some politicians consider this as a sign of new project funding, other organizations are determining a budget surplus could signify poor state management.

Political advocacy group A Better Delaware published an article on Delaware Online explaining where the surplus could have originated, where its funds will go, how Delaware handled surpluses in the past and how taxpayers can challenge the state’s current budget situation.

A Better Delaware cited new tax increases on corporate franchises, realty transfers, alcohol and cigarettes over the past several years as the main reasons for the $200 million additional revenue. The organization calls this a move designed to overtax Delaware residents.

The Tax Foundation concluded that 10.2 percent of Delaware’s income goes to state and local taxes, a higher percentage than the national average. Delaware also imposes a high 8.7 percent corporate income tax and is one of the six states in the nation to apply a gross receipts tax.

“A Better Delaware, therefore, wants taxpayers to know that they have been ‘overcharged,’” the organization wrote in their article on Delaware Online. “Tax increases enable the government to authorize additional spending, when many people feel that they’re paying too much in taxes already.”

Delaware, compared with the rest of the U.S., has the ninth highest combined corporate tax rate, ranks No. 41 in personal income taxes and has among the highest real estate transfer taxes, the article states.

Initially, the idea was to wait for an Economic and Financial Advisory Council final projection in June to fairly distribute its funds once the surplus was announced. However, it was later revealed that Dover politicians promised almost all of the $200 million would finance several projects.

In the article, A Better Delaware fears that voters will not have an opportunity to decide how the state government spends the extra funds and will not receive any refunds.

“The new proposed spending has been raised with minimal transparency or public input into how to remedy the situation,” the article said.

The group referenced when Rep. John Kowalko (D-Newark) condemned a surplus from last year that derived from extra charter school transportation financing, calling it “a shocking display of disregard for taxpayer money” if the charter schools kept the funds to themselves.

A Better Delaware advised that the excess funds should be returned to the respective taxpayers while calling on residents who wish to object the budget spending to contact their local legislators. Voters can also advocate for better Joint Finance Committee scrutiny for budgeting anytime a new tax is introduced.