There is much that the residents of Delaware can look forward to in the way of tax cuts. The state government is on the brink of a major crisis, as its budget comes under serious strain due to the global economic slowdown. The recent collapsestate capitol delaware of the world economy has meant that state government finances have tightened, and this is having an adverse effect on taxes and expenditures. If the current situation continues, this could result in a state capital that is completely cut off from state funding.
In order to avoid cutting the state funded by the state capitol, the General Assembly has passed a number of important pieces of legislation. One of these is the state budget, which will be implemented in June. It includes a number of tax breaks, including tax cuts for individuals and small businesses. This means that the state’s coffers will once more be flush with money, and that revenues will rise significantly over the upcoming year.
However, the state’s large business community is not satisfied with this increase in taxation. They are concerned that the state cutbacks will force smaller businesses to either expand or cut jobs. In addition to reducing state corporate tax, the state budget also includes a proposal to increase income tax for high-earners. These measures will raise the state income tax for families earning over a certain amount.
Along with this, the General Assembly has passed a bill that allows Delaware corporations to incorporate. The move, dubbed as the New Start Business Act, will help establish new businesses in the state. The move is said to help level the playing field between small and large companies in Delaware, and put Delaware at the forefront of global business. However, corporations could lose out if they do not register. As such, the legislation has been passed with several exemptions.
Despite the state cutbacks, the state’s top leaders, both Democrats and Republicans, seem content with the results. Majority Leader John Kavanagh (R) believes that the state will benefit from the revenue increase. Meanwhile, Minority Leader Paul Sarbanes (D) called the recent developments disappointing but attributed the loss of state-funded positions to an “unhealthy trend.” He proposed a measure to restore funding to all levels by next year. Both leaders have placed blame on the previous administration for not putting in place measures to prevent these types of cuts.
While state officials state that the measures will ensure that state funds are not lost, corporations are reportedly worried. Some corporations are concerned that their taxes will increase in light of the current state funding situation. The General Assembly recently passed a resolution supporting the corporations, and some state lawmakers are hoping that the legislature will pass a similar resolution soon. In the past, state lawmakers have passed resolutions encouraging state universities and colleges to cut funding in response to state budget cuts. Although it seems like these legislators are simply stating their opinion, many say that these types of resolutions have actually been used in the past to force colleges and universities to reduce funding.
Even some members of the General Assembly believe that cutting state funded positions is a bad idea. State Senator George Brown (D-DE) said that the legislature should not pass any resolutions to decrease state funded positions. He cited House Bill 1186, which is currently in the state house, as an example of a bad idea. The bill would cut state funds for state universities by over forty percent. Although the legislature passed the bill with majorities in support, it is expected that the measure will be voted down in the next session. A similar bill was recently passed in the state of Tennessee.
Most state representatives see this latest round of budget cuts as a necessary step to help stabilize the state’s economy. Majority Leader John Lazebber (R) said that the recent economic turmoil has forced lawmakers to take corrective action in order to avoid further problems. Majority Whip Rep. Gary Stubblefield (R) agreed that lawmakers need to cut state funded positions in order to balance the state budget. Both legislators expressed optimism that the state’s economy can rebound from the recent recession.