March 19, 2009 will forever be remembered as the date that Delaware’s Gilded Age officially ended. An age that was literally ‘built on a house of (credit) cards’ is no more. The same institutions that buttressed Delaware’s financial strength, compliments of the usurious interest rates that Delaware had legalized, imploded and helped lead what in retrospect was an inevitable meltdown, not just for Delaware, but for the global economy.
Gov. Jack Markell is left with the task of cleaning up the immediate carnage and developing a vision for the state’s future and a plan to execute that vision going forward.
Let’s talk first about the carnage. Many of ‘bulo’s friends, both on this board and in state government, are hurting deeply today. Read their emotional messages and try to understand just how deeply this cuts. This hurts profoundly, and will continue to hurt. This community can do its part to let these friends know that everyone is in this together, as ‘bulo considers this part of this community’s mission.
Looking at gimlet-eyed reality, the Governor was faced with many choices, none of them easy ones. ‘Bulo feels that he has made the best of an impossible situation, and that those gleefully looking to make partisan hay on this should be ashamed. By law, the Governor has to propose, and the General Assembly has to enact, a balanced budget.
‘Bulo had previously criticized candidate John Carney and the General Assembly for ‘kicking the can’ down the road last year when lots of sleight-of-hand was used to avoid making tough decisions despite the abyss staring them in the face. Alleged Governor Ruth Ann Minner confirmed ‘bulo’s diagnosis by not even deigning to submit a balanced budget for FY ’10, as was her statutory mandate. No doubt writing a vanity chronicle of the triumphant Ruth Ann Years can be too time-consuming to actually do your job, even if some staff hack is doing the actual writing.
Back to the budget. Predictably, all of the wounded parties are howling. AFSCME, the horsemen looking to preserve their precious and unwarranted monopoly, big business screaming about corporate tax hikes, people objecting to the PIT increases. Most of that howling reflects real pain and is justified, or at least reflects people doing the lobbying jobs for which they are paid.
But here’s where the rubber meets the road. Any change to the formula, for example, any relief from the pay cuts, service cuts, or tax hikes will have to be balanced somehow. And that’s assuming that the DEFAC numbers stabilize, and that the projected deficit remains at $750 million. So, what would you do? And, if you increase revenue, what would you restore? And if you decrease revenue, what would you cut? Please be specific and think out your ideas, please don’t resort to boilerplate talking points, like ‘cut wasteful spending’, without putting some meat on the bones. Some of you will remember that, when first elected, then-Gov.-Elect Markell reached out for suggestions from everyone, especially state employees, and has received hundreds of ideas for making government more efficient. ‘Bulo himself submitted a couple. So, the Governor is trying to ‘cut wasteful spending’. ‘Bulo will be watching closely to see which of these ideas have been incorporated into the plan, and so should you. ‘Bulo would also like to see the Governor release all of the specific suggestions that he is incorporating into his proposal.
‘Bulo proposes that the State begin to reverse the consolidation of tax brackets that first began under Pierre ‘Call Me Pete, and I’ll call you Joe Six-Pack’ duPont. If you go back to 1976, when duPont was first elected, there were a series of income brackets between $60,000 and those registering on the Oligarchic Seismograph. Those were folded together over a 20-plus year span to the point where, today, those making $60K annually pay the same percentage of PIT as the Greenville aristocracy. It was inequitable, but few complained b/c the State was rolling in dough, and few felt overtaxed. Gov. Markell talks about proportionality in sharing the sacrifice, but ‘bulo believes that those who have benefited disproportionately from a less progressive tax code, not to mention usurious interest rates which made many of them undeservedly wealthy, should now have to pay the piper. It is not class warfare, it is basic fairness.
In terms of Markell’s vision for the future and plans to implement said vision, ‘Bulo is optimistic. Why can’t Delaware be the Green Incubator of the East Coast? That appears to be one of the cornerstones of the vision, and he is bringing in a Silicon Valley whiz-kid to help carry it out. This could be for Delaware what the chemical industry was, and what the banking industry was, the linchpin to Delaware’s ongoing job creation and business success, but also a key component in building Delaware’s identity as a state with a vision and the ability to confidently make that vision a reality. Oh, and a vision which paints the State as both doing well and doing good.
There are many pitfalls to all of this, and ‘bulo plans to write another piece soon on the political and other minefields awaiting Markell as he tries to get his proposals through the General Assembly. For now, strong coffee and a breakfast burrito beckon the Beast Who Slumbers…