Brian Bushweller, State Senator

17th District of Delaware

June, 2017

Budget Issues of Particular Interest to Seniors 

Every year, June is the month when the state government finalizes its budget for the upcoming fiscal year.  In recent years, June has been especially hectic for budget writers because the costs of state government have been rising faster than revenues.  With several years of budget cuts, employee reductions, program eliminations, very small raises for state employees and other cost cutting measures, this next fiscal year (FY 18) is shaping up to be the worst yet for those charged with writing a balanced budget, which is required by our state constitution.

Even with all those cuts from previous years, we still face a nearly $400 million gap between revenue and anticipated expenses for FY 18.  The main culprits causing the increase in expenses are (1) the growth in public school enrollment – there are more and more kids coming into our public schools- and more and more of those kids have special needs, and (2) growth in the Medicaid program – the taxpayer paid health insurance program for low income people.

Many proposals have been suggested for how to grapple with this problem.  Some propose further cuts in programs, others propose increases in certain taxes.  Some suggest both.

Seniors could be specifically affected by some of the proposals.  Here is a brief summary of some of the proposals of particular interest to seniors.

  1. A proposal to reduce or eliminate the senior citizen school tax credit.  Currently, homeowners 65 years old and older are entitled to a credit against their school taxes (not including Vo-Tech school taxes) of 50% of the tax bill or $500, whichever is smaller. Once approved, this credit appears automatically on the senior’s school tax bill every year.  Proposals range from reducing the maximum credit to $400 to eliminating the credit altogether.
  2. A proposal to allow local Boards of Education to raise school taxes without a referendum to make up for reduced state support for the schools.  There are proposals to reduce general funding for the schools and to reduce transportation funding, specifically.  Under the proposals, these losses could be made up by local school boards by raising school taxes without referendum.  This would increase everyone’s school tax.  (It could be a “double hit” on seniors if the first proposal above is enacted into law.)  Right now, the proposal is to allow local school boards to do this only once but some worry it establishes a precedent for future years.
  3. Proposals to reduce funding for senior centers.  The State helps provide funding for many different senior center services through the “Grant-In-Aid” (GIA) bill each year.  Other groups in GIA include fire companies, veterans’ organizations and non-profit organizations such as Easter Seals.  To help balance the budget, there are proposals to cut “Grant-In-Aid” by a significant percentage.

There are many, many other proposals to cut programs or increase taxes.  One that could affect many seniors is the elimination of itemized deductions in the state income tax.  For seniors who still have a home mortgage or significant medical bills that they pay themselves, this could have an impact.

Everyone should pay attention to the local media such as the Delaware State News for more information on all these ideas as the budget development process goes forward through June.