Some changes may be better for Delaware in the long run.
Lawmakers looking to tweak Gov. John Carney’s proposed budget should set their sights on an increase to the state’s realty transfer tax, an item that was included in former Gov. Jack Markell’s proposal but was absent from Carney’s proposal.
Markell’s proposal to increase the realty transfer tax from 1.5 percent to 2.5 percent caused grumbling among the state’s three counties because it also included a 0.25 percent reduction in the amount that would go back to the counties. But the state could keep the current percentage and still raise the transfer tax, generating an additional $4 million in revenue.
The increase would help both the state and county budgets.
Delaware’s population has increased about 6 percent since 2010, according to the U.S. Census Bureau. Over that same period, the number of housing units increased by about 6,000. And with the economy continuing to improve, the growth is likely to continue. Why not increase the transfer tax which, while it would impact people changing residences in the state, would mainly hit people moving in?
The state also needs to undertake a comprehensive reassessment, something which hasn’t been done in decades and which would help level the playing field across communities.
Some parts of Carney’s proposal, such as reducing the senior property tax credit by $100 (a tax credit Markell wanted to eliminate completely), a reduction in higher education spending and a reduction in funding for open space, farmland and energy efficiency seem a bit short-sighted. The senior population is growing, and many are already struggling to pay bills. According to the Census, about 25 percent of the population in Sussex is age 65 or older. In Kent it is 16 percent, and in new Castle it is a little more than 14 percent. Even a $100 reduction can hurt this segment of our population.
In other areas, once farmland has been sold to development you can’t get it back, and investments in things that reduce our carbon footprint through energy efficiency result in savings that we will continue to see well into the future.
Putting together a budget is difficult. Putting together a budget that pleases everyone is impossible. But hopefully lawmakers will recognize areas where they can make changes that look more toward the long-term, and less toward the quick hits that get us a few dollars today but end up costing us more in the long run.