Delaware Democrats revive plan for gasoline tax increase

Matt Bittle
Posted 5/6/15

A number of potholes dot the westbound lane of Westville Road, near Moose Lodge Road in Wyoming. A number of potholes dot the westbound lane of Westville Road, near Moose Lodge Road in Wyoming. Gov. …

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Delaware Democrats revive plan for gasoline tax increase


A number of potholes dot the westbound lane of Westville Road, near Moose Lodge Road in Wyoming. A number of potholes dot the westbound lane of Westville Road, near Moose Lodge Road in Wyoming. Gov. Jack Markell has pushed for more funding to fix potholes, build bridges and provide other repairs. (Delaware State News file photo)

DOVER — Democratic lawmakers are pushing for an increase in some DMV fees and reviving last year’s failed gasoline tax hike proposal as a way to fund $780 million in infrastructure projects over the next six years.

But Republicans are saying “not so fast.”

Gov. Jack Markell has pushed for more funding to fix potholes, build bridges and provide other repairs.

Lawmakers were set to meet today to continue negotiations. A meeting last week was canceled by Republican leaders because the process was moving too quickly, they felt.

Members of the minority caucuses sought to further discuss issues amongst themselves, Minority Leader Rep. Daniel Short, R-Seaford, said.

Speaker of the House Peter Schwartzkopf, D-Rehoboth Beach, said he wants a proposal to at least be introduced by the time the General Assembly goes on a two-week break after May 14.

Despite pushback from the minority, Rep. Schwartzkopf thinks the two sides are zeroing in a deal.

However, Rep. Short disagreed.

“There’s ongoing discussions of a variety of things, and they range all over the place, so I don’t think at this point that we’re, as was perceived by others, close to anything,” he said. “I think there’s a real conceptual and philosophical discussion that has to go on and then there’s some real detail that has to be finished up.”

According to both sides, such a deal would likely contain some Division of Motor Vehicles fee hikes and could include a gasoline tax increase. The goal, Rep. Schwartzkopf said, is to bring in $50 million a year, a figure put forth by Gov. Jack Markell last year.

The DMV increases would likely focus on late fees and other areas that would not impact many Delawareans, according to the speaker; the gasoline tax hike would affect most heavily those who drive frequently.

One benefit of the tax, Rep. Schwartzkopf said, is it could potentially bring in millions from tourists alone.

Every cent of the state’s 23-cent gasoline tax brings in $5 million annually.

Last year, Gov. Markell proposed a 10-cent a gallon increase, which was immediately pilloried by Democratic and Republican lawmakers alike. Legislators objected to the governor dropping a bombshell, as they saw it, without advance notice. An approaching election also played a role in discouraging some politicians from supporting it, as well.

But times have changed. Pivotally, the general consensus both inside and outside Legislative Hall has shifted, officials claim.

Rep. Peter Schwarzkopf Rep. Peter Schwarzkopf

“People that told me last year, ‘Don’t do that,’ are now telling me, ‘Hey, we need to do it, we need to get some revenue in here,’” Rep. Schwartzkopf said.

Since the last snowfall of March 8, DelDOT has fixed close to 27,000 potholes at a cost of nearly $480,000, according to the agency.

Any gasoline tax increase this year would fall short of the 10-cent proposal, likely sitting at just a few cents, Rep. Schwartzkopf said.

Although that would not get the state to the $50 million figure lawmakers are aiming for, it would bring in millions for the Department of Transportation.

It’s no certainty, however, particularly as the proposal faces Republican opposition.

Just considering a gas tax increase would require some concessions from the other side, Rep. Short said. Republican leadership has put forth proposals it would like to see implemented in exchange for supporting the tax.

Implementing right-to-work laws, revamping prevailing wage and shifting DelDOT’s budget out of the Transportation Trust Fund are key talking points for GOP lawmakers.

It’s likely they’re also sticking points for the other side.

“I think we’re pretty close to any of the money side,” Rep. Schwartzkopf said. “I think there are some other issues that they would like to have addressed that we didn’t think were on the table.”

Although he declined to identify the specific areas holding up negotiations, his counterpart in the House minority caucus said Republican leadership would be willing to agree to a compromise that included at least one of those items.

“I think the good news is we’re talking, because in past years there hasn’t been a real firm conversation about what it is,” Rep. Short said.

Democrats, he added, have helped talks progress behind closed doors this time around by avoiding negotiating through public comments.

Since at least last year, Republican officials have been pushing state officials to transfer DelDOT’s $300 million-plus budget from the Transportation Trust Fund to the General Fund. The TTF has been dedicated solely to funding DelDOT for the past 22 years.

The House minority caucus last year proposed a plan that would move about $37 million per year out of the trust fund and into the General Fund over a seven-year period.

Doing so would free up more than $1 billion for transportation projects, Rep. Short argued.

Naturally, it would also result in a higher General Fund, meaning the state would have to make up money elsewhere.

No concrete plans have been offered publicly as to how the state would counterbalance the additional funds.

Rep. Short said there was a desire in the party to wait until the Delaware Economic and Financial Advisory Council puts out its next revenue projections on May 18. He thinks it’s a “stretch” behind-the-scenes negotiations are finished by then.

On the contrary, Rep. Schwartzkopf said he would have preferred the deal have been finalized by now to keep it separate from the budget process, although that is no longer an option.

Once lawmakers go on break after next week, the Joint Finance Committee will meet to finalize the budget bill. The JFC will have the newest DEFAC figures, which will include income tax data from the current year.

That gives lawmakers a clearer picture to use when crafting the state’s nearly $4 billion spending plan.

Some other discussions, such as proposed casino relief, have been put on hold while legislators attempt to work out an infrastructure deal that everyone can live with.

A deal involving a tax hike would need bipartisan support, thanks to a clause requiring a three-fifths supermajority.

It would also have to start in the House, which still has numbers enough to pass the bill without a single vote from the minority caucus.

The trouble for the Democrats lies in the upper chamber. Because the caucus lost a pivotal seat in the Senate in November’s election, the party no longer has a firm hold on the entire General Assembly.

Something has to be done by the time the Legislature goes on recess in July for the rest of the year, Rep. Short acknowledged, but when that actually happens is unknown. Such a deal could emerge in a matter of days, as Democrats hope, but opposition could prove strong enough to slow it for weeks.

At least publicly, Democrats are optimistic. Republicans are considerably less so. The negotiations could prove to impact the state for years to come.

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