Delaware proposed budget extends tax increases

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January 30, 2013

By Jennifer Springer

Delaware

DOVER, Delaware: Tax increases that were scheduled to expire this year would make up for a gap in Gov. Jack Markell’s proposed budget if they are kept in place.[1]

Markell presented his budget proposal on January 24.[1] In his proposal, he said if increases in the state’s personal income tax, gross receipts tax, corporate franchise tax and estate tax are kept in place, it would make up about half of a $56 million deficit in his proposed budget for fiscal year 2014. Spending cuts would make up the other half.[1]

The four types of taxes were increased in 2009 and the higher rates are scheduled to expire in July 2013 unless legislators vote to extend them.[1][2]

Democrats currently hold the majority in the House and Senate. Markell (D) is proposing the corporate franchise tax and the estate tax continue as they have been since 2009.[1] He also recommended keeping the personal income tax in place, but cutting the top rate from 6.75 percent to 6.6 percent.[3][1]

“We first took a look at what kind of shortfall we were facing this year and what it looked like next year and believed that we had to do something on the revenue side,” Markell said. “This is the cleanest thing to do, to send a signal that this is where we are.”[4]

The tax proposals are estimated to generate $27.9 million in the fiscal year beginning in July, and $156.7 million the following year.[4]

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