How a tough political fight scuttled SB 50
By Dan Linehan
A bill to raise a statewide property tax that would pay for maintenance issues at Delaware Technical Community College collapsed after a heated political fight.
Co-sponsors of SB 50 started dropping out in late February, as opposition led by Sen. Colin Bonini, R-Dover, worked to persuade lawmakers that the political costs of supporting the tax were too high.
The bill was dealt a final blow when DelTech President Mark Brainard asked sponsors to back down.
“I made a decision last week that there’s an awful lot of goodwill among legislators who really want to fix this problem,” he said. “If what they’re saying to us is the property tax mechanism isn’t a preferred method, we’re willing to discuss alternatives.”
Sen. Harris McDowell, D-Wilmington, who sponsored the bill, said intense political pressure broke the momentum of the bill.
“He asked me to not move forward with it at this time,” said McDowell about Brainard. “He’s worried about how people look at his institution, and the fact that people were criticizing his institution was concerning.”
Delaware Tech’s deferred maintenance backlog, which has grown for years due to what Brainard describes as chronically low appropriations, is slated to hit $100 million by 2020.
“Standing by and doing nothing risks both the immediate safety of those students and the long-term success of Delaware Tech,” said McDowell. “I remain committed to finding a solution this year and I invite my colleagues to join me in that effort.”
Bonini, for his part, doesn’t deny the problem. “I absolutely think that Delaware Tech has a real problem, not just DelTech but all higher tech institutions,” he said.
An alternative bill, authored by Rep. Kevin Hensley, R-Townsend, but not introduced at the time of this writing, would give Delaware Tech the option of borrowing money like other state agencies.
The proposal does not provides for new revenue and specifically forbids using local property taxes to pay bonds back.
The authority to borrow money without dedicated funding to repay the loans is “not helpful at all,” Brainard said. “DelDOT couldn’t finance and build roads without dedicated income, like tolls. Unless you have a dedicated revenue funding stream to finance those projects, it’s useless.”
Bonini suggests Delaware Tech actually does have a funding stream in the form of tuition – but Brainard is loath to tap it.
The school has used some tuition money for minor projects since 2007, Brainard said, but raising it would fly in the face of their mission. “The last population in the state we want to put additional financial burdens on are those folks who are trying to get connected with a job.”
Most bills live or die in obscurity. So even a few dozen calls can cause lawmakers to take notice, said David Stevenson, policy director of the Caesar Rodney Institute, a Newark-based right-leaning think tank.
“If 30 people call, that’s 10 or 100 times that many people who feel the same way,” Stevenson said. A phone call to a lawmaker has much more heft than an email or a form letter, he said.
It’s not exactly clear that state Democrats, who control both chambers, backed off due to calls. But opposition to the bill within the General Assembly was intense, said House sponsor, Rep. Edward S. Osienski, D-Newark. He received about 10 emails, and responded that, while raising taxes is “not an easy ask,” he’d support the bill until a better alternative presented itself.
State Rep. Steve Smyk, R-Milton, reversed his support for the bill after hearing from his constituents. He said his initial support of the bill was a “well-intentioned mistake,” according to a statement.
Bonini said the most potent argument against the bill was that it would become a slippery slope, leading to more and more statewide property taxes.
The bill would have raised taxes on the average New Castle County property by an average of about$11 a year, scaling up to about $47 over several years.
Digging a deeper hole
The backlog is a matter of arithmetic. Based on industry standards that an institution’s annual maintenance budget should equal 3 percent of its capital assets, Delaware Tech should spend $12 million a year.
The General Assembly has been discussing the issue since 2006, when a task force was created to identify solutions. Its recommendations were never acted upon, Brainard said.
Over the last 10 years, the state has averaged $4.9 million a year in bonding appropriations. The resulting deferred maintenance has led to the closure of classroom space in Wilmington due to water leaking into the building.
Last year’s $10 million appropriation “gave us some breathing space,” but when budgets get tight again, funding may fall back in the $4 million to $5 million range.
When Delaware Tech can’t even fix its existing buildings, it can’t respond to new job training demands from the private sector, according to Brainard. He noted how new diesel mechanic and automotive training programs wouldn’t have been possible without a federal grant and private sector funding.
“If folks decided that SB 50 in its current form is not an acceptable solution, we’ll continue to make the case for some solution,” Brainard said.