By Glenn Rolfe

DOVER — A mix of good and bad.

Republican legislative leaders Thursday gave Gov. John Carney’s proposed budget for fiscal year 2023 a C/C- grade, commending his caution budgetary approach while saying his spending proposal doesn’t do enough for working Delawareans and small businesses.

No significant tax breaks for the working/middle class are included in the proposal, GOP legislators contend, considering a significant projected surplus that was in excess of $800 million during the governor’s State of the State address last week.

“My biggest concern, the thing that I am most hopeful for is that there will be some type of incentive, tax decreases that we return to the middle class and the small businesses,” said House Minority Whip Tim Dukes. “That is really valuable.”

“We heard a lot about how money is going to be spent. But there is really nothing said about giving that windfall back to the taxpayers of Delaware, whether personal income taxes, reduction of realty transfer tax etc.,” Sen. Pettyjohn said. “Our caucuses have introduced legislation to actually give some of that money back. We hope that the governor and the majority gives serious consideration to that, especially considering the windfall that we have now.”

In a virtual session Thursday afternoon, Rep. Dukes, Sen. Pettyjohn, Senate Minority Leader Gerald Hocker and Rep. Ruth Briggs King, a member of the Joint Finance Committee, offered insight several hours after Gov. Carney unveiled his $4.9 billion spending plan, which the governor says will strengthen Delaware’s economy, expand opportunity and support Delaware’s families and workforce.

“When I think about our working families and how much they have endured during COVID, and we look at the surplus money we have in the state we really need to say, ‘What are we doing? Can we reduce this personal income tax? Can we reduce some of the realty transfer tax and look at our corporate fees?’” said Rep. Briggs King. “Some of these are not sustainable and we need to be looking at what we are doing for working families who have struggled through this, and also for our many businesses.”

Sen. Hocker said the state in lean fiscal times has have gone to the taxpayers to bail them out. “Now we have a surplus and I didn’t hear him say anything … that anything is going to go back to the taxpayers to thank them for contributing to the state’s economy when it was needed. We need to give those that bailed the state out back some of their money,” Sen. Hocker said.

GOP leaders say the governor’s plan does not adequately address current inflation and worker crisis.

“There is a statewide worker shortage, not just in the public sector but also big-time in the private sector. When he said he was going to give 2% raise to state workers with a 7-plus percent inflation there are not getting ahead,” Sen. Hocker said. “It’s a big-time problem in the state of Delaware and I don’t see anything at all where we are trying to ease that problem.”

Contacted Thursday afternoon, Republican Rep. Bryan Shupe agreed, saying more support is needed for working individuals and families.

“We see a $1 billion surplus going into FY 2023. I think a very beneficial thing that we could do to help with this workforce crisis is decrease the personal income tax,” said Rep. Shupe. “I think that would allow for individuals who are looking to go back into the workforce and businesses to say, ‘I get to keep more of my own money’ to deal with this inflation, with escalating prices for gas, bread, milk and everyday staples.

“While there were good things in there, I think from my conservative viewpoint, we (Republicans) introduced several pieces of legislation … to help provide some tax relief for some of our senior citizens who are feeling very much stressed by this unprecedented inflation rate,” said Rep. Briggs King. “I think for me having served on Joint Finance Committee, I wasn’t surprised by anything in the budget presentation.”

Republican lawmakers commended Gov. Carney on some of his budget plans. These included his $30 million commitment to farmland preservation/open space, more than $300 million earmarked for the savings/rainy day fund, education and investment in clean water.

“The clean water, I am glad to see there is state money, over $12 million, and leveraging over $350 million in federal funds as well,” Sen. Pettyjohn said. “Clean water doesn’t just affect what you get out of your faucet at home. It’s also our waterways, our tax ditches, drainage, a lot of agricultural interests are interested in clean water.”

There was applause for budgetary support for a new Troop 4 Delaware State Police barracks in Georgetown, and new schools, including a new Sussex Technical High School and Sussex Central High School, among others.

Rep. Shupe commended the governor for his continued commitment to put money in reserves.

“I think that is one of the reasons why we weathered the pandemic early very well. As you can see, he put $300 million in that reserve account this year,” said Rep. Shupe. “It is one of the things that he did as an executive order that we on the Republican side of the aisle we have been trying to put into law, because it is such a prudent and good government way to have money in the economic bad times, that you won’t have to reactively cut services or raise taxes.”

Rep. Shupe said he was frustrated that there was no discussion on the current workforce crisis that small businesses are facing right now.

“Last week Gov Carney discussed how there are 35,000 open jobs in Delaware, but there is only 26,000 people looking for work, according to the Department of Labor. We’ve seen labor shortages. There has been increased inflation instability of our small businesses,” said Rep. Shupe. “One of their tax policies was going to have taxpayers committing $25.2 million to give individuals that didn’t work the ability to skip paying taxes on their state unemployment checks. I think that was kind of the focus in the wrong direction. I think the real focus is getting out of this current workforce crisis, and that is helping employees that worked overtime during the pandemic, and also helping the small businesses that have managed to support our families … despite the current workforce crisis.”

Overall, Rep. Dukes said the governor’s budget presentation lacked “where we are going in the future.”

“We spent a lot of time today listening about what is happening and where money came from,” said Rep. Dukes. “Now, really the work starts this coming week when the Joint Finance meets and then you do the deep dive into this budget, and we begin to really to do a real analysis of it.”

“One thing that I do like, and it is something I have liked about all of his budgets, and that is he is cautious about the budget and growing the base budget,” Sen. Pettyjohn said. “I do like that he does do a more cautious, more shall I say conservative budget than previous governors have done.”

Rep. Dukes did note that about 20% of the near $5 billion budget is federal dollars.

“He talked a lot about the federal funds that we received through coronavirus, to the tune of $1 billion. He laid it out where that money is spent,” said Rep. Dukes. “I think the interesting thing will be is how in the end that will really be disseminated as you get into the weeds of it.”