DOVER – Members of the Delaware House of Representatives took a step toward implementing some of Governor Jack Markell’s (D) proposals for investing or spending part of an additional estimated $365 million in state revenue.
Proposals approved by the House Thursday include a reduction in personal income taxes for those in the bracket above $60-thousand a year, a cut in the gross receipts tax, and cutting public utility tax rates.
House Majority Leader Pete Schwartzkopf (D-Rehoboth Beach) said lawmakers faced the difficult decision of raising personal income taxes in 2009 when the state was facing a deficit of $800 million. A sunset date to expire the tax increases was set for 2014, with the intention to revisit them if state revenues started to improve.
Now that the state has a more encouraging revenue picture, House lawmakers passed legislation to cut the personal income tax for Delawareans making $60,000 or over from 6.95% to 6.75% for 2012 and 2013. The sunset provisions would take over in 2014, when the rate would revert to 5.95%.
Schwartzkopf said the action would return $6.8-million back to the taxpayers in Fiscal Year 2012 and $17-million in FY ’13. While State Representative Deborah Hudson (R-Fairthorne) said she’d rather roll the taxes back all the way, Schwartzkopf cautioned that “the money we have available is not all stable revenue,” and that some sources of funding remain “volatile.”
Members of the House also approved a cut in the gross receipts tax of three-percent across-the-board. A reduction in public utility tax rates from 5% to 4.25% was also approved 37-1, but House Minority Leader Greg Lavelle (R-Sharpley) said he was concerned about a provision that would create an Energy Efficiency Investment Fund. The fund would receive the first $5-million in process generated by the public utility tax, and would be used to finance energy efficiency projects designed to “reduce overall energy use and create jobs.”
“I don’t know why we’re creating a new fund,” Lavelle said, adding that he is also troubled that funds could be administered “in consultation with” the Sustainable Energy Utility. He said the SEU has $26-million in unspent funds and that it has high administrative costs and audit issues.
The three bills now head to the State Senate for consideration.
