Delawareans' taxes are likely going to have to go up, Governor John Carney said as he brought his budget reset conversation to the WDEL airwaves.
Carney is grappling with a $350 million budget deficit which has been building for years.
"Our revenue's increasing at a rate slower than expenses, and most folks can understand the expenses that are driving that side of the budget, which are additional students showing up to Delaware public schools every year and health care costs--those two big things," said Carney on WDEL's Rick Jensen Show Wednesday, March 8. "On the health care side, it's Medicaid, which is an $800 million state obligation--basically 50 percent is covered by the federal government. In addition, we have health care costs for state employees and retirees, which includes school district personnel...as well as health care provided to prisoners."
Carney said the health care costs are rising at twice the rate of the economy--a problem that exists nationally. He also noted Delaware's a bit too competitive compared to Pennsylvania, New Jersey, and Maryland in one big area, hinting that the low property taxes Delawareans enjoy could afford to be raised.
"Here's the way I look at taxes: they ought to be fair; they ought to be simple; they ought to generate revenue; and they ought to enable us, as a state, to be more competitive," he said. "[That's where] we are too competitive. People move to our state because our property taxes are so low. I hear people who've moved here from Pennsylvania, from New Jersey, from New York: 'I got a bill and I thought it was a quarterly or monthly payment.' But that's their payment for the year."
Carney said he'd also like to see a proposal to slash the Grant-in-Aid bill, which provides money to various non-profits, because solving this budget crisis will require what he called "shared sacrifice." He said the resolution will be achieved through a mix of cuts in state spending and additional revenues.
"I hear from everybody that has a particular program or interest that says, 'Look, we've got to cut spending in state government, and we should cut everything else, except my little thing over here;' we have to prioritize," he said.
On Carney's wishlist: 1 percent more economic growth and 1 percent lower health care costs, which doesn't sound like a lot, but amounts to millions to help close the budget gap.
The governor is also seeking Delawareans' input to solve the state's budget crisis. He's hosting the following "budget reset" conversations up and down the state:
- 6:00 p.m. – March 8 – Carlisle Fire Hall, Milford, hosted by Senator Gary Simpson and Representatives Harvey Kenton, William Outten, Charles Postles, and David Wilson
- 7:00 p.m. – March 16 – Thomas McKean High School, Wilmington, hosted by Representatives Deborah Hudson, Joseph Miro and Mike Ramone
- 8:00 a.m. – April 5 – Caffé Gelato, Newark, hosted by Representative Paul Baumbach
- 6:00 p.m. – April 10 – Delaware State Police: Troop 3, Camden, hosted by Representative Lyndon Yearick
- 7:30 a.m. – April 11 – ChesDel Restaurant, Middletown, hosted by Representative Kevin Hensley
- 7:30 p.m. – April 26 – Rose Hill Community Center, New Castle, hosted by Senator Margaret Rose Henry and Representative J.J. Johnson