Last week, Governor Jack Markell made two stops in Milford to promote his proposed tax increases designed to complete transportation projects and to clean up the state’s waterways. On Monday, March 10, the Governor spoke to business leaders at the Milford Rotary dinner meeting, and on Wednesday, March 12, he spoke at Kent and Sussex Industries.
Governor Markell has proposed a ten cent per gallon gas increase, claiming that the increase would bring in $50 million per year, and by borrowing an additional $50 million, many of the transportation projects that have been placed on hold, such as an overpass planned near the proposed Kent County Sports Complex, as well as one at the intersection of Route 1 and Northeast Tenth Street. Residents of Woods Haven have been fighting for the overpass at the intersection for several years.
“Even with this proposed gas tax, Delaware still has lower gas tax rates than surrounding states,” Governor Markell said. “This additional ten cents will bring the gas tax in Delaware to $0.330, compared to Maryland with $0.435 and Pennsylvania with $0.608.” According to figures presented by the State of Delaware, New Jersey, with a rate of $0.145 and Washington DC, with a rate of $0.288, would remain lower than Delaware.
“The impact on consumers will be minimal,” Governor Markell said. “According to DelDOT figures, the average person drives 13,476 miles each year, and the average vehicle gets 23.5 miles per gallon. This means that the average consumer purchases 573 gallons of gas per year. An additional ten cents will mean a cost of $57 per year, or $4.78 per month.”
The second tax proposed by the Governor is designed to improve the condition of the state’s waterways, using a tax on residences and businesses to generate $120 million annually. The cost for the average homeowner would be approximately $45 per year if their property is less than one-half acre, but could rise to $85 per year for land that was larger than an acre. Business taxes would cap at $25,000, depending on the size of the property.
“Right now, 94 percent of our rivers supporting fish and aquatic life are unhealthy,” said Governor Markell. “86 percent of our rivers are unsafe for swimming. 74 percent of our lakes and ponds that support healthy fish and wildlife are unhealthy, while 41 percent of the lakes and ponds are not suitable for swimming. That is embarrassing and unacceptable.”
In addition to the revenue generated by the two taxes, Governor Markell says that jobs will be created through the many projects that will begin once the funding is in place. However, both taxes have met with significant resistance from consumers and members of the General Assembly.
“We’re just asking too much of Delaware’s people in bad economic times,” said Senator Gary Simpson. “We’re putting another tax burden on homeowners and businesses at a time when we should be lowering costs and spurring economic development. This is just the wrong time to be doing this, especially on the heels of a proposed 10-cent gas tax increase. There’s no denying we have water quality issues here and throughout the United States, but we need to address them at a time – and at a price – that makes sense.”
Local members of the House of Representatives agree with Senator Simpson’s sentiments. “Nearly everyone acknowledges that we require more money for our transportation needs and that we face serious challenges to improving Delaware’s water quality,” said State Representative Harvey Kenton. “Where we disagree are the approaches for resolving those difficulties.” Senator Kenton said that House Republicans have previously suggested options that would not require additional taxes or new fees as they believe that increasing the burden on working Delawareans and small businesses should not be the preferred choice, but a last resort.
“I won’t be voting for any tax increase,” said State Representative Jack Peterman, regarding the gas tax increase. “House Republicans have repeatedly, over many years, put forth a plan to fix the Transportation Trust Fund and provide more funding for backlogged capital projects, like the Northeast Front Street overpass that would serve Woods Haven. Our plan would collectively provide an additional $1 billion over seven years for road and bridge construction without the need for a higher gas tax.”
Currently, the Joint Finance Committee is reviewing information in the process of drafting the 2015 budget, which will be presented to legislators for vote at the end of the legislative session.