DOVER — Skeptical lawmakers opted Thursday to halve the recommended funding for Race to the Top programs and push back any vote on a proposed senior property tax subsidy cut.
The Joint Finance Committee spent more than an hour on each topic, with lawmakers passionately arguing for several solutions as they continued plotting the $3.9 billion budget for the fiscal year starting July 1.
Most of the discussion spent on the Department of Education in the afternoon revolved around Race to the Top programs. Federal funding for positions and initiatives put into practice with the $119 million received from the government expires June 30, and the Department of Education had requested $8.5 million worth of funding be moved to the state’s General Fund.
Gov. Jack Markell’s January budget recommendations included $7.5 million for Race to the Top-sponsored actions, with $1.55 million going to 10 positions that fell under the auspices of “teacher and leader effectiveness” and “accountability and performance management” within the Department of Education.
Lawmakers questioned top education officials when they appeared before JFC in February, with legislators wondering when Race to the Top would end and why some of the 10 positions would pay more than the job of cabinet secretary. JFC members are far from the only officials in the General Assembly who openly have criticized the department.
That was on display Thursday, as lawmakers referred to the proposed funding as “bureaucratic blah, blah, blah” (Sen. Karen Peterson, D-Stanton), a “poor investment” (Sen. David Lawson, R-Marydel) and at best a “mixed bag” (Rep. Melanie George Smith, D-Bear).
“I’ve not heard from one person at ground level who thinks that this has done anything or will do anything,” said Sen. Peterson.
In addition to the 10 positions, the recommended $7.5 million would have gone to data analysis, teacher recruitment and the Educator Insight Portal, which was developed as a result of Race to the Top.
Instead of $7.5 million, the committee’s budget called for continuing the funding of Race to the Top programs to the tune of $3.75 million. The 10 positions were not included in that total, meaning the current workers will be transferred to vacant slots or simply no longer be employed by the state.
Five JFC members supported a motion to remove all Race to the Top initiatives from the General Fund. The motion, which was supported by all four Republican legislators on the panel, failed 7-5.
Several legislators expressed concern the money will go to the department rather than individual districts. The $3.75 million will be used for the Educator Insight Portal, new science standards and general teacher improvement plans, although the latter has been sliced down from higher amounts requested by the department and recommended by the governor.
“The definition of insanity is doing the same thing and expecting different results, and our governor is stopping insanity and I give him a lot of credit for really sticking with his guns and sticking with a plan for change,” Rep. George Smith, the co-chair, said.
After the amendment to eliminate all efforts started by Race to the Top failed, committee members voted 12-0 to pass the $3.75 million allocation.
That was not the only topic discussed with great interest Thursday, as options in regard to the planned cut of a senior property tax subsidy were also on the agenda.
Proposed by the governor, the plan would slice a subsidy for those older than 65 down from the lesser of $500 or 50 percent off their local school property taxes to $250 or 50 percent.
A rapidly aging population, which includes many retirees who move to the state due to its low property taxes, is placing a burden on the shoulders of budget officials. Seniors have the option to receive several tax breaks, and the school subsidy is estimated to cost the state $23.6 million this fiscal year. That figure is projected to double in 10 years. About 60,000 elderly Delawareans receive the subsidy.
“We have $130 million of tax credits that we give to seniors, and no one’s saying they’re not deserving, but these are tough times, and you’re sitting on some very tough deliberations right now, and tough times and tough decisions, and whether you’re an appointed official like myself or elected officials like you, we are asked to make these decisions,” Mr. Cook said to the council. “So if we don’t address this issue in some way and bend that cost curve, then quite honestly, I’m afraid we’re not doing the citizens of the state a justice.”
Originally instituted in 1999, the idea was designed to discourage seniors from voting against property tax increases, which provide funding for districts. As seniors are less likely to have children in schools, they may not receive a direct benefit from the local educational districts.
As Mr. Cook explained, an eligible senior living in a $400,000 house in the Caesar Rodney School District has a school tax of $682. Currently, he or she would receive the lesser of $500 or 50 percent off the tax, so that individual would end up paying $341. If the plan is changed to $250 or 50 percent, the resident would pay $432.
In February, JFC suggested studying the possibility of means-testing the subsidy, so those in need could receive the full value while individuals above a certain income level would get the halved value.
Facing constituent outcry, a number of legislators have been hesitant to approve the administration’s plan. The cut would close $12.6 million of the deficit facing budget-writing officials, who are trying to erase an $83 million shortfall.
A number of options are on the table, including means testing, barring new applicants and changing the dollar cap.
While having the counties means-test recipients is not feasible, Mr. Cook said the state could do it using income tax statements. That could not be done for fiscal year 2016, however.
Excluding new applicants or lifting the residency requirement from three to 10 years also would not provide any savings in the next fiscal year.
Changing the subsidy to $300 or 50 percent would save the state about $7.2 million in 2016 and about $13 million in 2025.
Lawmakers appeared unwilling to make major changes, expressing concerns about the impact a lower subsidy would have on the elderly population.
With no consensus on a particular option and more information requested, JFC opted not to vote but to wait until June.
Mr. Cook said afterward he had not expected a vote Thursday. Acknowledging the cut has drawn a passionate response from people, he noted the subsidy is costing the state money and challenging budget times require hard decisions.
Some legislators had similar sentiments.
“This problem didn’t start overnight, we’re not going to solve it overnight, and this is going to be the most important vote that members of this committee takes, I guarantee you,” said Sen. Bruce Ennis, D-Smyrna.
JFC will meet again next week Tuesday through Thursday to discuss outside programs receiving state funding. Legislators still will have their work cut out for them, as more than half of the $83 million shortfall still remains, although officials did not have a specific figure when the meeting ended Thursday.