Delaware Watch is committed to an alternative–progressive analysis of Delaware’s politics, history, culture, environment and economy.
"It's class warfare and my class is winning." Warren Buffett
The value of any commodity, ... to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command. Labour, therefore, is the real measure of the exchangeable value of all commodities. (Adam Smith, Wealth of Nations Book 1, chapter V.)
The question we ask today is not whether our government is too big or too small, but whether it works....(Barack Obama)
I remember skeptics claiming that manufactured homeowners would never be able to procure the financing to buy their parks. That isn't true for one manufactured homeowners' community:
In a first for Delaware, a group of manufactured-home owners is poised to buy their park and operate it as a resident-owned community.
The Minquadale Village Homeowners Association has struck a deal to buy their roughly 90-lot community south of Wilmington for $1.9 million. No longer will residents own their homes and pay rent to the landowner. Instead, their monthly payments will go to pay the mortgage and maintain their community, and new residents will be given the opportunity to buy into the community….
On Friday, the Minquadale Village group cleared a legal hurdle, winning a ruling from Chancery Court Master Sam Glasscock III that they had satisfied the requirements of the new law. The deal is expected to close within 120 days.
I remember naysayers arguing that if manufactured homeowners bought their own parks, they wouldn't be able to afford the "fees"--that their rents under their landlords are more affordable:
Ken Shaw, president of the Minquadale Village association, said monthly rents at the park range from $380 to perhaps as high as $600 for double lots.
Under community ownership, the fees will be about $450, Shaw said. However, that figure could come down as new residents move in, because only 62 of about 90 lots are occupied.
I remember doubters stating that park owners would never want to sell their lots to their tenants, that they wouldn't find it profitable to do so:
Residents of manufactured-home communities, particularly in Sussex County, have long complained about soaring lot rents. Yet they have been able to do little about it, because their homes aren't easily moved and finding a new lot can be difficult.
The community ownership model not only solves that problem, but it can work to the landowner's advantage, said Keith Timko, vice president of real estate and innovative programs at Real Estate Advisory & Development Services.
That firm, known as READS, is a New Jersey-based nonprofit that helped the Minquadale Village homeowners through the process.
"We worked with the residents to formally create a homeowners association. We had to approve bylaws, draw up articles of incorporation," Timko said.
"Hopefully now we'll have a track record and be able to tell other investor-owners, 'Look, this is doable. You'll still make a healthy return on your investment,' " Timko said.
And what will the manufactured homeowners enjoy from owning their own park cooperatively?
Although the park is well-maintained, Shaw said, the new system will give residents a pride of ownership they never had before.
Governor Jack Markell met with many of Delaware’s bloggers at the Panera Café in Newark, Delaware. I missed the Governor’s opening remarks because of a sick child and arrived at the beginning of the questions and answers session, which constituted the lion share of the meeting.
The details of the meeting with some commentary are below, but I want to convey my overall impression here. My general sense is that the Governor is quite sincere when he says that his budget proposals involved many personally difficult decisions. Although I disagree with many elements of the Governor’s budget proposals, as is evident below and elsewhere on Delaware Watch, I do not believe that he framed his budget proposals lightly without due consideration of the sacrifices he is asking of many Delawareans, especially state employees. Nevertheless, empathy isn’t a sufficient guarantee of correctness.
On the Proposed State Employee Wage Cuts
Today Gov. Markell called the proposed state employee wage cuts an 8% cut even though, by the Governor’s own estimates, it’s actually a 10% cut if state employees pay a larger share of their health insurance benefits. In any case, the Governor described the wage cut proposal as the “most painful” decision he made in his budget proposal. He thought a wage cut was a better way to go than laying off hundreds of state employees (1,500), an unimpeachable position from my perspective although some in Delaware salivate at the notion of state employees losing their jobs.
He emphasized that although state employee wages are 45% of the budget, his proposed wage cuts constitute only 12% of his proposed solution to the state budget shortfall.
He described the wage cuts as “temporary” although, upon questioning, he doesn’t have a particular sunset date in mind. He cannot give a precise date because of uncertainty about the national and state economy and because the $155 million in Federal stimulus money that Delaware will receive is “temporary.” He believes the best way to restore the wages of state employees is by eliminating the “waste and inefficiencies” in state government—a whopping $91 million worth of waste and inefficiencies by the reckoning of his own budget address.*
Governor Markell is “open” to a graduated wage cut scheme, but there are not many wage earners at the “upper end” of the pay scale. The Governor considered a furlough program for state employees instead of a wage cut, but he said it was more difficult to get the budget savings from a furlough program because often someone would need to take the shift of an employee on furlough. That gets into costly overtime pay.
On the Proposed 1% Income Tax Increase on Upper Income Earners
Gov. Markell has proposed raising the taxes by 1% on those who make make incomes in excess of $60,000. The increase does not apply to the first $60,000 of income.
Gov. Markell is open to the idea of additional tax brackets for upper income earners. But, according to his calculations, his proposal effectively creates new brackets for upper income earners already. For example, someone who earns $1 million dollars would be in a 6.8% state tax bracket and that contrasts with 4.9% tax bracket of some earning $60,000. While I’m certain that Delaware’s millionaires won’t appreciate the bracket creep of Gov. Markell’s proposals, they should, nevertheless, fall to their knees and thank their lucky stars they are not state employees facing a potential loss of 10% of their income. Better yet, they should thank state employees for potentially subsidizing their comparatively low tax increase.
Gov. Markell’s openness to additional tax brackets for upper income earners notwithstanding, he does have some concerns about taxing their income at a higher level. To begin with there really are not many upper income earners in Delaware and he worries about high end income earners moving out of state, perhaps over the line in Pennsylvania. Of course, as long as the high end wage earners earn their wage in Delaware, their potential migration patterns are irrelevant to the question.
Gov. Markell wonders if we might get some New Yorkers moving to Delaware now that new state tax brackets have been created for them. I doubt New Yorkers would enjoy the commute from Delaware to work, so it was hard take the Governor's speculation seriously. Instead I took the Governor’s remarks as an indication that he reads Delaware Watch.
Other Possible Sources of Revenue
Gov. Markell entertained many questions about other sources of revenue. For example, he is not particularly keen on the idea of using the state’s rainy day fund. If the rainy day fund is used, he said, then by law it has to be replenished. Besides, after Delaware receives federal stimulus money, we need to make up for the loss of that revenue. Although Gov. Markell didn’t say that he would use the rainy day fund for that purpose, I could not help but wonder if that was the implication given the context of the conversation. Is that what a rainy day in Delaware is? Loss of federal revenue? It’s not sparing state employees a 10% wage cut?
The Governor is not in favor of a sales tax, not even a nominal and temporary one. He believes that the lack of a sales tax differentiates Delaware from other states and it drives shoppers from other states to Delaware. He also worries that a nominal tax wouldn’t remain nominal “the next year,” which, it could be argued to the contrary, is why it would have to be temporary as well as nominal.
The Governor also doesn’t support an increase in the gas tax now. Revenue from the gas tax goes to fund the transportation budget and not the general fund. Besides, there are problems with the way the transportation budget is funded and questions about the gas tax should wait for that “larger discussion.” The Governor didn’t say what those problems were probably because we were running out of time for the meeting.
On Sports Betting and Expanding Gambling in the First State
Governor Markell proposes:
3 new casinos
Allow sports betting at existing casinos and the new ones
Allow sports betting at 10 other sites such as restaurants and bars
Increase the state’s share of casino and racetrack revenue
Today Gov. Markell said that the necessity of expanding gambling in the first state was simply a matter of “doing the math.” If we don’t get the $55 million he projects from his proposal, then we need to get it from so other place.
When asked about the long-term consequences and costs of expanding gambling in the first state like an increase in personal bankruptcies, Gov. Markell believes that a lot of that analysis is “speculative” and most of the “patrons” to our gambling businesses would come from “out of state.” Apparently, out-of-state personal bankruptcies are morally tolerable.
Other Matters
Gov. Markell’s proposals to reorganize and reduce the size of government are only a first step. He plans to make a more thorough and ongoing review of Delaware’s government. In that regard he mentioned the number of school districts in Delaware. But he stated that he is not prepared today to support the reduction of school districts, but “a discussion of it needs to be on the table.” I’ll say.
Gov. Markell defended choosing Vince Meconi as the federal stimulus wrangler. The Governor knew that Meconi’s choice would be controversial, but he said that Meconi understands “budgets and numbers.” Besides, Meconi’s temporary position doesn’t involve a policy role. It wasn’t exactly clear why only Vince Meconi understands “budgets and numbers.”
__________________
*$91 million is the figure Governor Markell claimed in his budget address would be saved by cutting the wages of state employees by 10%.
Note: the second photograph was provided by Jason Scott of Delaware Liberal.
Public Allies is an AmeriCorps program that is designed to train new leaders. Allies are placed with local non-profit agencies and meant to further the community outreach of these agencies as well as their sustainability.
Instead of taxing Delaware state employees through a 10% wage cut, why doesn’t Gov. Jack Markell follow the example of Gov. David Patterson in New York?
Gov. David A. Paterson and leaders of the Legislature have reached a deal to raise taxes on New York’s highest earners in order to close the state’s yawning budget deficit, lawmakers and officials involved in the negotiations said on Saturday.
If Gov. Markell is more worried about offending the rich than he apparently is of offending poorly paid state employees, he could follow Gov. Patterson’s example and make the increase temporary:
The plan would raise $4 billion a year by creating two new tax brackets on high earners, an increase that would expire after three years.
Just make a couple new brackets for high income earners like New York plans to do:
Currently, New York’s highest tax rate, 6.85 percent, kicks in for couples and joint filers making more than $40,000. Under the plan, the highest bracket would start at $500,000 with a rate of 8.97 percent — the same as New Jersey’s current highest rate. A lower rate of 7.85 percent would apply to incomes over $300,000.
While Gov. Markell plans to slash the wages of state employees by 10%, he only plans to raise taxes on the well-to-do by 1%. But It makes more sense to tax more those who can afford it, the rich, than it does to take 10% of the wages of those who make less than, say, $30,000 a year. But it could be that Gov. Markell’s intention is to subsidize only a low tax increase for the rich by slashing the wages of struggling state employees.
While just people in Delaware celebrate the recent defeat of SB 27, the bill that would have amended Delaware’s constitution ban all legal unions between same-sex couples, HB 5 yet to be considered in the state senate.HB5 would
prohibit discrimination on the basis of sexual orientation in housing, employment, public works contracting, public accommodations and insurance. (link)
One of the arguments frequently cited by opponents of past legislative iterations of HB 5 is that there is no evidence of harm or discrimination that comes from sexual orientation.Not so says a recent a study:
A study released on Friday (PDF) by the Williams Institute at the UCLA College of Law found that gay and lesbian couples face higher rates of poverty than heterosexual married couples.
“The myth of gay and lesbian affluence is just that – a myth,” said the study’s authors. “Lesbian, gay and bisexual individuals are as likely to be poor as are heterosexuals, while gay and lesbian couple households, after adjusting for the factors that help explain poverty, are more likely to be poor than married heterosexual couple households.” (link)
Children living same sex households are greatly affected:
Children living in a same-sex household had poverty rates that were twice as high as those of married couples. One in five children in same-sex families was poor compared to one in ten for married families.
Homosexual and bi-sexual persons experience higher poverty rates across the board:
The poverty rate for lesbian families is 9.4 percent compared to 6.7 percent for those in married families.
Twenty-four percent of lesbians and bisexual women faced poverty compared to 19 percent of women nationally.
Gay and bisexual men had poverty rates of 15 percent compared to 13 percent of all men.
The reasons why higher poverty rates occur among homosexual and bi-sexual persons ought to be intuitively obvious.But for the intuitively challenged:
“The social and policy context of LGB life provides many reasons to think that LGB people are at least as likely — and perhaps more likely — to experience poverty as are heterosexual people: vulnerability to employment discrimination, lack of access to marriage, higher rates of being uninsured, less family support, or family conflict over coming out,” the study concluded. “All of those situations could increase the likelihood of poverty among LGB people.”
Only a troglodyte doesn’t think this happens in Delaware.Only a sociopath knows that it happens but doesn’t care.
The increase of 1 mpg overall for the fleet of all passenger cars and sport utilities and pickups doesn't seem like much of a boost. But it is the first time that the standards for the entire fleet has been raised and it will cost the industry $1.4 billion during hard economic times. So perhaps this increment is the best that can be expected under the circumstances.
The U.S. government on Friday imposed the first increase in mileage standards for passenger cars and boosted the floor for sport utilities and pickups beginning with model year 2011 vehicles.
The modest increase of less than 1 mile per gallon for the fleet over current targets for the fleet represents an abbreviated approach by the Obama administration as it confronts industry distress and pressure from California and other states to set their own goals.
The standard, which is expected to cost industry $1.4 billion in vehicle design and other changes, would require compacts, sedans and other passenger cars to average 30.2 miles per gallon in combined city/highway driving, up from the 27.5 mpg standard that was established in the late 1970s under the Corporate Average Fuel Economy (CAFE) program
About two weeks ago the congressional Republicans boasted they would not be offering an alternative budget to President Obama’s. But President Obama mocked them for having nothing to offer. Apparently, that stirred some hasty action. Yesterday the house Republicans offered a thin document and called it their budget. It was so thin that the White House Press Secretary Andy Gibbs quipped that it took him “several minutes” to read it.
The budget was oh-so-Republican:
House Republican leaders called a press conference Thursday to unveil their "alternative budget." While it was thin on specifics, it does include one major policy proposal: a huge tax cut for the wealthy.
Under the Republican plan, the top marginal tax rate would be slashed from 35 to 25 percent, facilitating a dramatic transfer of wealth up the economic scale. Anyone making more than a $100,000 would pay the top rate; those under would pay 10 percent.
A tax cut mostly benefiting the rich. Always with the Republicans it’s a tax cut. They have become a one-trick pony.
But what about the other details? The kind of details that would tell us if this plan is good one or not given the current economic climate. Where are the details, Republicans?
"On what?" asked [Rep.] Boehner [when asked by a reporter].
You know, the kind of details that make for a credible budget proposal:
"What about some numbers? What about the out-year deficit? What about balancing the budget? How are you going to do it?” [a second reporter asked]. [What about how it will put people back to work?]
Oh, that stuff:
"We'll have the alternative budget details next week," promised Boehner.
It is looking like the Republicans pulled a couple tax cut numbers out of a hat just for the sake of holding a press conference and will do the math later. It doesn’t sound as though they determined in advance if their proposal was feasible. They just wanted to create the appearance of an alternative plan. Just blow a little smoke.
Still, the details are important, like the one about deficit reduction:
A third reporter asked Boehner about the Republican goal for deficit reduction, noting President Obama aimed to cut it in half in five years. "What's your goal?"
Goal? Did he say goal? That’s something that should be known now?
What a pity. Obama is not for decriminalizing possession of marijuana. But I'm not surprised. With having already to contend with being called a socialist literally every day, rolling back the marijuana laws would be portrayed as very radical.
Still, criminalizing marijuana possession, incarcerating people for it, is insanity and it's unjust. I couldn't live with myself if I were in his position and not speak out against them.
The White House's innovative Open for Questions forum has produced plenty of substantive questions on wonky issues. But roughly midway through, the president preemptively took one of the more popular and provocative questions of the bunch.
The query, which received more than three million votes, was: "With over 1 out of 30 Americans controlled by the penal system, why not legalize, control, and tax marijuana to change the failed war on drugs into a money making, money saving boost to the economy? Do we really need that many victimless criminals?"
He kept his answer brief.
"There was one question that voted on that ranked fairly high and that was whether legalizing marijuana would improve the economy and job creation," he said. "And I don't know what this says about the online audience, but ... this was a popular question. We want to make sure it's answered. The answer is no, I don't think that's a good strategy to grow our economy. All right."
If you can get over the social irresponsibility of Gov. Jack Markell’s proposal for Delaware to gamble its way out of a recession, you can learn an important lesson about how businesses within a “free market” naturally morph into a lobby for an anti-competitive economy.Look at who else dislikes Gov. Markell’s idea but for wholly different reasons than mine:
Gov. Jack Markell says Delaware's three racinos would profit -- not lose money -- if his plan to add more casinos, allow sports betting and hike the state's share of gambling revenues goes through.
That's not how racino operators read the numbers.
In a news conference Tuesday at Dover Downs, state gambling industry executives said the Markell plan would dilute a market already crowded by competition in Pennsylvania and the promise of slots in Maryland.
Markell last week proposed allowing three new casinos; allowing sports betting at existing casinos, the new ones and 10 other sites such as bars and restaurants; and increasing the state's share of casino and racetrack revenue.
He also indicated his openness to consider live table games such as poker and blackjack…..
But Ed Sutor, president and CEO of Dover Downs Hotel & Casino, said Markell's logic is flawed. The idea of adding sports betting was to attract more people to Delaware's existing racinos, so it wouldn't make sense to allow sports betting away from the racinos, Sutor said.
"The simple truth here, at the end of the day, is there's an oversupply of gaming opportunities in this market," said Tim Horne, Dover Downs Hotel & Casino senior vice president for finance. (link)
Note that these racino owners are only following their self-interest and self interest has a natural tendency for monopolistic thinking and advocacy.Self-interest views the auspices of government as the means to ratify its monopolistic tendencies and tries to co-opt its power to eliminate a competitive marketplace.Within the political scale that upholds some version of capitalism (say, from market socialism to Randian libertarianism), nothing is naturally and ultimately more anti-competitive than the rule of unmitigated self interest.
It is important for the citizens of Delaware to oppose SB 27, the bill that would amend Delaware’s constitution to ban civil unions of same sex couples. Although the proponents of this bill claim the bill bans marriage of same sex couples, which is already illegal in any case, in fact it goes beyond that by banning “all legal unions” of same sex couples. It would give no legal recognition to same sex couples whatsoever and it would do so constitutionally.
In order to become a constitutional amendment, it needs be passed by a 2/3 majority in both the state house and senate for two consecutive years.While that might sound like an insurmountable number, don’t be fooled.Vote counters monitoring the progress of the bill say the vote could be close.
Here is a list of excellent reasons to oppose SB 27, provided by Delaware Liberal:
Senate Bill 27 will PERMANENTLY OUTLAW CIVIL UNIONS.
Gay Marriage is already not legal in Delaware - this bill is REALLY about Civil Unions
Major state employers like DuPont, AstraZeneca, and the big banks offer Domestic Partnership benefits. This bill sends the wrong message in the current economy and will give their employees an incentive to live (and shop) in New Jersey or Maryland (which recognize Domestic Partnerships).
This bill is bad for the economy - it will chase away entrepreneurs
According to Gallup, 55% of Americans support Civil Unions, and Delaware is more socially progressive than the average state.
It would be very unfair and undemocratic if the legislature amended the constitution to ban something that a majority of Delawareans support.
If this amendment passes, Delaware will become the ONLY state in the Northeast to ban Civil Unions.
If this bill gets out of committee today, it will be put up for a vote tomorrow (Thursday) in the state senate.It’s important that you call your state senator right away and state house representative and express your opposition to this bill.
If you want more background on this bill, then I recommend that you read the Delaware Liberal article about it.
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