Breaking: 8% Pay Cut Among Markell Proposals
Jack Markell has proposed an across-the-board 8% pay cut for all state employees, including teachers. This would include both merit and non-merit employees and, coupled with benefits reduction and holiday adjustments, will reduce employee compensation by about 10%.
The News-Journal’s Ginger Gibson has done a superb job of explaining Gov. Markell’s entire proposal, and you can read it here.
Gibson reports that:
The governor wants to cover the state’s estimated $751 million budget deficit in several pieces — $371 million in budget cuts and moving funds, $166 million in new taxes, $155 million in stimulus funds, $55 million in gambling revenues and $12 million in new fines and fees.
Markell said the decision about where to cut and which taxes to raise were based on three principles, fiscal responsibility, compassion and shared sacrifice. He said his administration is committed to ensuring that long-term goals are kept in mind while keeping in mind the need for core government services and not placing too much of the burden on a particular group.
The Governor also calls for an increase in the personal income tax for those making over $60,000 annually, an increase in tobacco and alcohol taxes, and increases in gross receipts and corporate franchise taxes.
Markell also calls for legalized sports betting that will not be limited to just the racetracks. That should make for some interesting political negotiations.
There is a lot more in Markell’s proposal and in Ginger Gibson’s article. Please read her piece and come back here and speak your piece.
Tags: Delaware Budget, Markell
I also just heard Jack say that he was open to up to three new casino locations. I think I just heard the entire Baker Administration AND Wilmington City Council cheer from here.
Yeah, and the article reports that Markell would consider up to 10 additional locations for sports betting. ‘Bulo thinks they should be put as close to borders with neighboring states as possible.
Eight percent is tough . . . . especially when you see millionaires on Wall Street continue to get their bonuses.
My PIT goes up AND my teaching wife, who has a list of medical bills (and on-going procedures) due to my oft-documented accident of hers, just got smacked. Already teetering on debtor’s prison, this could (note I said COULD) be the last momentum needed to complete the slide.
Ah, just an initial reaction. Need to step away for awhile.
Yep, there’s no good way to close a $700 mill budget deficit. Guess it’s preferable to mass layoffs …
Still, ‘bulo wonders about the much-vaunted ‘Rainy Day Fund’. If it’s not gonna be tapped now, then when?
How about a temporary sales tax?
It’s raining, too! Literally.
The Smitty-wife just sent an email to me that I guess was sent to all state employees explaining the cuts and a kind of mea culpa for causing pain. I guess there is a “what in the hell you gonna do” air to all of this, but cheese-n-freaking-rice. This, on top of living in NCCo and Coons’ budget. Oh, it’s just been a real effing winner of a week up here.
How about a temporary sales tax
That’s the gross receipt tax…seriously. There is a very legit reason it’s called a back door sales tax. It’s a tax very few, if any, other states have, yet we do and it’s popped almost every time there is a crunch. What do you think merchants do with that tax? Happily decrease revenues penny-for-penny? Nahhhhh.
Man, I am not stepping away like I said I need to!!!
The State Employee pay reduction…my skepticism is raging again. When/IF it gets restored to today’s level, will that then be called a “raise,” which would be a lie, based on this proposal, or will it be “restored” with raises still “open” to review?
RSmitty, I’m talking about an actual sales tax on movie tickets, everything sold at Target, books, etc. Don’t tax groceries.
Chance of an economic recovery get slimmer when those with jobs have there pay cut. It`s not part of the unemployment data but it causes additional loss of disposable income and hurts the economy almost as much as job losses.
nemski, I know you are. What I am saying is we, the consumer, are already paying into an effective sales tax via the increased retail price, propped up by the gross receipt tax paid by those merchants. DE is one of a few that levy that tax, a disguise to cover sales tax so we can trimphantly declare, “Home of Tax-Free Shopping!”
Don’t get me wrong, I’m not trying to lay this blame on Markell or Democrats or even Republicans. It’s a game that’s been played for a lonnnnnnnng time.
Nemski, there’s a reason that Delaware makes a point of advertising it’s ‘no sales tax’ status. It really does attract people from the surrounding states to come here and spend. Adding even a temporary sales tax will depress business revenues even more.
Plus, even if you exempt groceries, it’s a regressive tax that places greater burden on those with the least to spend.
‘Bulo hopes that there is some graduation to Markell’s proposed PIT increases, i.e. those making $2 mill plus should pay a higher percentage increase than those earning the $60K.
Over the years, there has been a consolidation of brackets which has taken a lot of the graduation out of the graduated income tax.
Thanks Ruthanne Minner…
Further, once again will not be getting married to Mr. Vyllyn THIS September – cause our combined salaries are above that 60 mark… I despise DPL, Comcast, all all the rest of the crappy people in this state who couldn’t find their asses with both hands…And also gracias to Chris Coons for planning on raising NCC real estate taxes 25% – you just put this divorced mom out of her home – you bloodletting bastards.
‘Bulo has now had the chance to look at the Governor’s presentation. A couple of interesting tidbits:
1. The Delaware Health Care Commision will be eliminated. This is great news as this was nothing more than the Delaware Way at its worst, with mostly lobbyists and hangers-on working with administration officials and Paula Roy (?) to ‘split the baby in half’.
2. Teachers’ inservice days will be reduced from 6 to 3. ‘Bulo has often wondered why it seems like a 5-day school week is so rare in Delaware.
3. Unless ‘bulo missed it, there is no real graduation in the PIT increase. Over $60K, it’s the same % increase for everyone. This needs to be revisited, IESHO.
“Markell also calls for legalized sports betting that will not be limited to just the racetracks.”
Does this mean public stoning of school boards will become a legal sport?
vyllyness
“Thanks Ruthanne Minner…”
Right on to that!
I want to know how many State Employees would qualify for food stamps , free or reduced school lunches, medicaid, and SCHIP if their pay gets cut by 8%.
At an estimated 10% pay cut the average teacher in the State will lose $5,300.
Any family solely dependent on a single teacher’s salary will be driven below the “living wage” line.
Two-State employee families will take two additional hits: (a) losing up to $4 k in health insurance premiums previously paid by the State annually; and (b) having their income taxes increased for any portion of their income over $60K as a couple.
Teachers on food stamps is about to become a reality, as well as cafeteria workers, custodians, secretaries, libraries, social-service caseworkers, etc. etc.
I give him credit as being a newly elected governor in committing political suicide. coons is on the way out, but markell had a career ahead of him.
This is excellent news for republicans.
Guess we can stop wondering what happened to the ‘working poor’ class that vanished under the Bush administration….WE’RE IT!
It would seem that the PIT could’ve hit a little harder on the ‘haves’ kicking in at $100,000 instead of $60,000 and that state employees at the upper end of the pay scale take a bigger hit while the little guy takes a lessor hit. It’s disingenuous to say everyone is being treated ‘the same’.
Tell me, friends, do you prefer the pureed pet food or chuncks in gravy with your kibble?
Has anyone accounted for the inevitable increase in crime that will come with families being unable to feed their young?
Property taxes – up
+ Income tax – up
+ Sewer tax – up
+ Water rates – up
+ ‘Sin’ taxes – up
+ Electric rates – up
+ Property values – down
+ Income – down
+Jobs – vanishing at record rates
+ Portfolios – folding
= OH SHIT!
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part of me is hoping he asks for more then he wants so he gets at least something through the General Assembly. I mean, what happened to the 5% that they told COs about a week ago?
the worst part of the plan is it will still be too little as revenues continue to fall as the economy continues to contract. We are headed to hell in a handbasket, california is leading the plunge and they are sending out worthless I.O.U.s in place of state tax refunds. The future is not going to be pretty.
“This is excellent news for republicans.” – A1
and bad for normal every day americans….. like pretty much everything that is good for the GOP.
Delaware has a pretty friendly business tax yes? why not hie that up? that AIG building up on 202… yes they have their claws right here in wilmington… can afford it.
Arthur #19:
I give him credit as being a newly elected governor in committing political suicide
I do, too. It isn’t often that you find any politician willing to fall on his/her sword to do the politically unpopular when it is the right move for his/her constituents.
i think this will be a test of Carney’s character. if he decides to exploit the breech and primary Markell, well he’s a dooooooooosh
….in 4 years. I realize now how stupid that comment was…. more coffee….
There is an increase in the franchise taxes as well as the Gross Receipts Tax as discussed above. At $371M in spending cuts and only $233 in revenue increases. And at the rate the economy is still falling off of its cliff, there is very good reason to think that by June even these numbers will be inoperative.
From here it looks like Markell has done the real heavy lifting to make the books work for now, and has basically pissed off everybody. Which he spent a great deal of time signaling. The GA gets the job of trying to readjust the balance, maybe trying to index the pay cuts (JJ Johnson said a week or so back that the JFC already made a commitment not to cut Education, but who knows how they get there) but the brutal scale of the thing won’t be any different.
And I’d be willing to bet that Jack has not committed political suicide. Every state around us is doing the same thing. And besides, if you’ve seen the GOP response to this it is awfully clear that any better ideas are not to be had.
Let’s all hope so, cassandra_m
Cassandra; your absolutly correct, delaware for now is in better shape than many other parts of the country but it will get a lot worse before it gets better. This is just a finger in the dike for now, be prepared for a lot more cuts a tax and fee increases as time goes on.
Am I wrong or does it sound like a lot of regressive taxes?
The PIT increase certainly isn’t regressive. The PIT and the Corporate Franchise Tax increase represent the largest share of the tax increases.
The Gross Receipts Tax would be if it is all passed on the consumers — it would disproportionately fall of people who spend more of their income.
Lots of folks (Including me)think that gambling is regressive, but it isn’t exactly a tax.
Sin taxes are supposed to be regressive and I would imagine the public utility tax increase is also regressive.
U.I. yes but the state has no alternative, a lot of you have not had the displeasure of living thru a prolonged period of high unemployment, those who are still working must make up for the lack of money generated when other people lose their incomes. The unemployed will not be paying their share of taxes so the burden must fall on those who still are. Look for higher taxes and fees from now on. In a economic turn down as sever as this one will be everyone takes a hit, even those with jobs.
What did anyone here expect was going to happen?
That he’d eliminate entire state agencies to make up the shortfall?
That he’d find some new, magic way of bringing in revenue that doesn’t hurt anyone?
No. Part of Markell’s whole spiel the last two months has been that there’s going to be pain, and everyone’s going to feel it.
People in NCCo are going to feel it a bit more, however.
As your governor considers allowing casinos, look at what has happened to the casinos in Atlantic City now that Pennsylvania has opened a few. The AC casinos were having trouble even before the economic problems became obvious.
Everyone seems to think that gambling revenues will solve problems, ’cause they see the revenue Nevada and Atlantic City raked in. But that revenue stream was dependent upon available gambling locations being restricted; once casinos are everywhere, they’ll become poor revenue generators.
I am not a fan of counting on gambling as a stable revenue stream. The thing that people here think that they have the advantage with is sports betting, which no other East Coast casino is allowed to do. And even then, we’re restricted to parlay betting, which I don’t know is as lucrative as single team bets.
There is alot of resistance to more gambling in the GA — but now they have to come up with the revenue that the Gov’s proposal assigned to gambling from some other source.
It’s also going to take at least a year – at the very least! – for gambling to take hold and actually start bringing in revenues.
By that point, things will be on the rebound, if you believe the overly optimistic economic forecasters (who are about as accurate as the real weatherman).
I don’t see anything up and running until 2011, 2012 at the latest. And as others have pointed out, it’s a very risky revenue stream, especially during a recession. Casinos and the lotteries have already reported a decrease in the number of people playing in recent months.
The sports book could actually be up and running in time for football playoffs – at the very least the Superbowl. New venues are another story altogether.
Markell may well have put “the three additional gambling venues” on the table as an opening gambit that will eventually bring in table games instead. Table games do not raise a lot of extra revenue, but they mean jobs and they do increase the slots take.
The Legislature is going to work this proposal over. They know where the deadbeat programs really are because they put most of them in place. Expect to see more spending cuts to specific programs to get the State Employees a break. That’s how things work usually with regards to the employees. The Governor is the bad guy (or woman) and the Legislature rides in to save the day.
You’re right – sorry, I should have clarified I was talking about the new venues.
not to mention the jobs that will be created to treat the gambling problems that will arise in delaware.
I suppose I should have clarified “saving the day” in this case will be reducing the pay cut to 5% or thereabouts. It will make it seem to take the sting out.
Although I may sleep on it before really going off 🙂 I’m kind of wondering where the State is going to find the Nurses, Civil Engineers, Correctional Officers, etc that they NEVER have enough of.
It’s interesting, the Adult Ed classes I teach for Polytech pay for themselves (mostly people paying Polytech XX amount of dollars for me to teach them how to use a computer), but my Polytech pay is going down also
Plus my wife is a Correctional officer
Looks like I picked the wrong week to work for the State 🙂
Looks like I picked the wrong week to work for the State
….although it may finally be the right week to start sniffing glue!
Can’t. That’s one of my household budget cuts. 🙂
Don’t worry its worse in the private sector. The state employees who start looking around will find a rude awakening.
Unless you run a company into the ground – then you get million dollar bonuese from the government.
But it has to be a big one or else you just get a few loans from SBA if you are lucky.
I am very upset about the state employee pay cut. We are having a tough time making ends meet as it is. Food, gas, taxes, etc.., are ALL going up, now we have to give ten percent because someone else made wrong choices?! I will end up losing big time if this happens. Is the state ready for more foreclosures and bankruptcies due the tax cuts? Why not cut back on the free hands outs and other “unemployeed” programs?!?!?!?!? This is what happens when you give tax cuts to people who don’t even work. The people who work have to make up the difference.
Oh the 10% state employee cut was done in the state of Michigan about 4-5 years ago and nothings improved. They are on worse shape now than five years ago. More research needs to be done before making a go of it.
Honey – Don’t you think that Michigan has a couple of other issues that contribute to that? Namely the Auto Industry’s collapse?
While I have great sympathy for state employees I have sympathy for everyone else as well – including those unemployed. This “us vs them” mentality will accomplish nothing more than making an ugly situation uglier.
leberal geek ~ yes, they have autos we have the failing banks. Get down to the bare bones of it all, when big businesses fail we all fail along with them. why make it harder on the people who actually DO work?!
I’m not at all condemning those who are legit and on unemployment because of losing their jobs. I lost mine too. We are all hanging by a thread here trying to make ends meet. I’m more concerned by the tax cuts placed on state employees. Let’s face it, DE is not up there when it comes to salaries to begin with. I don’t think its a viable solution to a hard hit economy that’s all.
Stop paying all govenment emlopyess that have enough money to survive 1 year without an income. let them collect unemployment if neccesary. Stop paying legislatores and make sure they have the same benefits that people with minimm healt insurance have.
Most of all, I keep hearing that Obama is all pro education, Once again, politicians are all talk and no action. Delaware has a 750 million def. yet we pay billions to financial institutions and car manufactuers. It’s insane.
Raise taxes a few cents on gas, we survived it at 4.00 a gallon, Thanks George, start taxing oil companies that want to sell gas in delaware. .
I don’t get it. Is not delaware a financial institution, Where the heck is our bailout.
For sure I’m not for raising taxes, and I believe its counter productive.
However, my spouse and I both work for the state, as school teachers we spend a considerable amount of our own money with out any pay back from the state. We understand that its not the kids fault that they don’t have paper and books, and other things to help them learn. I spend at least 3 or 4 thousand dollars a year with out reimburse ment. And now they want more.
If you consider both our incomes at an 8% PLUS reduction, we are bassically paying 16 %.
Moreover, as a school teacher I get payed for 37.5 hours at week. Bt let me assure you, I work around the clock making lesson plans, doing all the speacial projects thet the district has us do. I can not even get a weekend to relax. 37.5 hours, what a joke. lets call it 105 week plus the money I donate.
Some of you may say, If you don’t want to teach than don’t. Most likely you are the ones who have your kids in provate school and probably could’t care less how hard puplic school teachers work.
Well I can’t blame you, no sweat of you back.
Keep up the moral, what a joke. If I didn’t care how much I care for the kids who need us, I would leave. but I like to believe my heart is in the right place.
Jones, you’re a teacher? I’m glad my kids have already graduated.