Unlike the United States government, Delaware law requires the General Assembly to construct a balanced budget for the next fiscal year.
For fiscal year 2009, which started July 1, legislators were charged with closing an estimated $151 million budget shortfall last month and did so with the passage of a number of revenue bills. The general fund budget for FY 2009 is $3.3 billion.
According to Bert Scoglietti, director of policy and external affairs for the Office of Management and Budget, some highlights include House Bills 519 and 520 that will raise an estimated $52.5 million as they increase the franchise tax on limited partnerships and limited liability companies. Another piece of legislation, HB 513, will roll back the gross receipt taxes from 2006 and generate approximately $14 million.
Under Senate Bill 334, the period under which an investment-type property went unclaimed by its owner was decreased from five to three years, meaning if the owner cannot be located within three years, the property is turned over to the state. The law would immediately produce approximately $90 million, Scoglietti said. Such property could include insurance policies, stocks, mutual funds, real estate or jewelry. Of the $90 million raised, $75 million will be doled out to a special fund in the bond bill exclusively dedicated to school construction, while the remaining $15 million is allocated to the general fund.
The video lottery bill, HB 514, imposes a greater surcharge on the state’s three racinos, specifically on the fees to slot machine vendors and the annual contribution to Delaware Standardbred Breeder’s Fund and Delaware Certified Thoroughbred Program. The bill also paved the way for the racinos to stay open 24 hours per day, seven days per week. Previously they had to close between 6 a.m. and noon Sundays.
Ed Sutor, president and CEO of Dover Downs Hotel & Casino, said he understands the racino’s role in paying their fair share to balance the state budget, but cuts in marketing and payroll are imminent as a result of the increased fees. He added even the additional Sunday hours won’t offset the charges they’re facing. Two proposals, adding sports betting or table games, did not pass, and Sutor said those would have helped make up the difference.
Meanwhile, Scoglietti said state workers will not receive pay raises and the hiring freeze imposed by Gov. Ruth Ann Minner continues. Thirty-eight positions also were eliminated through attrition.
Reps. Pamela Thornburg, R-Dover West, and Nancy Wagner, R-Dover, voted in favor of these revenue bills. With HB 520, Wagner said she felt comfortable with raising the franchise fees since a lot of the companies aren’t based solely in Delaware, just incorporated in the state.
They also voted against the video lottery bill, with Thornburg saying she deeply considered its ramifications before making a decision.
“I looked at the casinos, horsemen and all the employees for all three racetracks,” she said. “We have competition looming around us and we’re going to take more from them – that’s absolutely not fair.”
Wagner said many of her constituents work for Dover Downs Hotel & Casino and were opposed to the bill, which helped mold her thoughts on the bill.
Looking ahead to next year, both Wagner and Thornburg agreed that they would have to look long and hard at restructuring government.
“We’ll see what programs aren’t working and take them off the table,” Wagner said.
Email Ryan Mignone at ryan.mignone@doverpost.com
