As Deep Budget Cuts Loom, Will New Tax Bills Save The Day In Delaware?

Delaware Budget Deficit

Fiscal Year 2018 will involve a lot of pain if the Joint Finance Committee’s marked-up state budget continues down the same dark path it is on now.  While some cuts seem like a good idea, others will make children go without desperately needed services.  The State Board of Education is kaput if everything stays the same.  But could new tax bills, which would bring in more revenue to the state, cause some of those cuts to disappear?

In Delaware, the General Assembly needs a 3/5 vote to pass any revenue bills.  In the House, that requires 25 yes votes and in the Senate, 13.  This is where it gets very tricky.  The House has 25 Democrats and 16 Republicans.  The Senate has 11 Democrats and 10 Republicans.  The House could conceivably pass the budget just on their Democrat base, but complications could easily arise.  Some Dems in the House will not favor certain perks in the epilogue language, such as the Charter School Transportation Slush Fund.  There is at least one Democrat, State Rep. John Kowalko, who will not say yes to the budget if that is in there.  The Republicans in both houses want something: prevailing wage.  They have wanted this for years, but this could be the year where they get what they want, or at least make some inroads towards it.

The Joint Finance Committee has to make the cuts until they see more revenue.  Are they going after some of the programs that help people the most?  Not yet.  But today is another day and is expected to be uglier than yesterday.  The JFC does not meet again until Tuesday, June 6th.  I expect a whirlwind of activity at Legislative Hall every single day someone is there between now and July 1st.

In Governor Carney’s proposed budget, the local share of student transportation costs went from 10% to 15%.  Yesterday, the Joint Finance Committee raised that to 20% with the expectation the school districts can recoup those costs from this mythological one-time Match Tax.  Carney proposed the district school boards utilize this option without a referendum.  Let’s be very clear on this: if this happens, do not expect taxpayers to pass referenda any time soon.

No matter how this plays out, John Carney’s vision of shared sacrifice will have winners and losers.  If the uber-wealthy get more perks like the estate tax repeal, it will become very obvious who is pulling the strings behind the curtain at Legislative Hall in Dover.

No Shared Sacrifice For Delaware Charters! They Get To Keep Their Portion Of Educational Sustainment Fund!

Educational Sustainment Fund

The Delaware Education Hunger Games just went up a new level.  The shot heard round the Delaware Education world when Governor John Carney put out his FY2018 proposed budget shook up the school districts.  But the part no one is talking about is the Delaware charter schools get to keep their educational sustainment funds.

The total for the educational sustainment fund is $28.15 million dollars.  Carney wants to cut $21,974.40 of that fund.  That amount is what goes to the local school districts.  The rest goes to the charters and there is NO recommendation in Carney’s budget to cut those funds for the blessed ones.  The rationale is the charters aren’t covered by the Match Tax.  But I will get to that part later.  Governor Markell actually wanted to keep the fund in his proposed budget for FY2018.  This means the charters would get to keep over $6 million dollars.

Meanwhile, Carney suggested the school boards could raise those funds via a match tax without referendum.  For arguments sake, let’s say school boards decide to go that route.  That would mean the charters could get not only the educational sustainment fund but also their local share of those match tax funds.  Since no local school board seems to relish the idea of taking up Carney on his idea, they are forced to get the funds elsewhere.  In many districts, teachers and staff are getting reduction in force notices.

It is absolutely disgusting and abhorrent the charters are able to keep this money.  I thought the charter school transportation slush fund was disgusting enough, but this is obscene.  All the angst and distress in the districts while the charters merrily set their budgets without a care in the world.  Sure, they might have to make some sacrifices, but I’m sure they can make up for it with the above-mentioned slush fund.  Why do the charters get every perk in the world while districts are made to suffer?

So where did this educational sustainment fund even come from?  To find out the answer to that, you have to go way back to the Governor Mike Castle days.  This was during a time when Delaware didn’t have the budget problems we are plagued with today.  There was actually an idea thrown into the air to cut property taxes entirely.  As Delaware does so wonderfully, they put together a group to see if this was possible.  John Carney was actually on this working group and was one of the chief voices against cutting property taxes altogether.  And that is where the fund came into being, through this group.  And now Carney wants to get rid of it, but only for the districts, not the charters.  Originally, the amount was over $50 million dollars.  But it shrunk down over the years.  There used to be a list for its intended use, but now it states these funds can be used locally for whatever they want.  Which means Carney’s statement about how it shouldn’t have been used as a permanent fixture to support teacher salaries is hogwash.

If you aren’t pissed off enough about the shenanigans going on with this budget, this should set you into a tailspin.  Unless you are actually a parent of a student who would benefit from this perk for your child’s school (aka, a charter school).  All the business officers in the school districts know this, and Mike Jackson, the Director of the Office of Management and Budget definitely knows this.  But this has remained under the radar for months now.  Until I found out today.

Do charter schools have a right to the match tax proceeds collected from Delaware school districts?  This is where it becomes a somewhat thorny issue.  Technically, no.  But the Christina School District settlement with the 15 charter schools set up a potential upcoming conflict where they could argue the merit of getting those funds.  From the settlement:

In particular, Plaintiffs are free to contend for fiscal 2018 and thereafter that Match Tax Revenues should be included in the calculation of Local Cost Per Student pursuant to Section 509. CSD is free to condent for fiscal 2018 and thereafter that Match Tax Revenues should not be included in the calculation of Local Cost Per Student pursuant to Section 509.

Why would any discussion of match tax funds appear in this settlement?  Unless they KNEW Carney would be putting this in his proposed budget.  And we all know it isn’t actually Carney creating this.  Most likely Mike Jackson.  More boon for charters.  And I just heard the charter school transportation slush fund WILL stay in the budget.  Time to get your voices heard Delaware and call out the State of Delaware for succumbing to the incessant lobbying of the Delaware Charter School Network.  It is time to get people like Greg Meece from Newark Charter School to shut up about his school’s great test scores and how they are recipients of the Blue Ribbon Award twice.  It is all based on superficial bullshit.  Anyone can rig the game and charters have been very proficient at that.  It is time to stop the Delaware charters from deciding education funding and policy in Delaware.  It is time for our legislators to stop voting on the basis of less than 20% of Delaware’s public education population and look at the needs of ALL our students.  Enough.  Our children are more important than these showmanship games.  I am not directing this at every single charter school.  I am directing this towards the lobbyists for the charters and the charter school leaders who have been doing this for decades.  They weaseled their way into Carney’s office and I see no signs of them leaving.  Time to make that happen!

Editor’s note: I don’t swear on here that much.  When I do, that means I am pretty ticked off!

Updated, 8:41am: In paragraph 3, sentence 3, I changed the word “would” to “could”.  At present, the charters have no claim to the match tax in Delaware.  It is my contention they are gunning for it very soon.