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Delaware lawmakers fail to pass budget as fiscal year begins

July 1, 2017

DOVER, Del. (AP) — With dawn approaching, Delaware lawmakers gave up trying to pass a budget for the fiscal year that started Saturday as Republicans refused to support higher income taxes proposed by Gov. John Carney and fellow Democrats to fund a proposed $4 billion spending plan.

After weeks of budget negotiations and failed attempts at last-minute deals, lawmakers settled early Saturday on an unprecedented short-term measure funding state government at fiscal 2017 levels for 72 hours.

The move came after a proposed tax increase failed in the House, with all Republicans and one Democrat voting against it.

Carney said he was “deeply disappointed” that lawmakers could not agree on budget, adding that Republicans were unwilling to compromise on “ideological demands.”

Carney said he planned to call lawmakers back to session at 1 p.m. on Sunday and intended to call them back every day until they passed a budget.

“We didn’t get it done.... We’re going to get a little sleep and get right back at it,” he told reporters as lawmakers left the building.

Senate Minority Whip Greg Lavelle, R-Wilmington, blasted Carney for leveling insults at Republicans rather than trying to nurture a spirit of compromise.

“The governor failed the state of Delaware today.... Delaware’s government is broken, and you saw it tonight why,” Lavelle said.

Since taking office in January, Carney has repeatedly called for an equal mix of spending cuts and tax increases to close a shortfall between expected revenue and expected expenses for fiscal 2018 that at one time approached $400 million.

Lawmakers agreed on a bill increasing corporate franchise taxes, paid mostly by out-of-state companies, to raise about $113 million in additional revenue this year. Republicans then indicated that they wanted to see more movement on spending cuts before considering further tax increases.

But after the Democrat-led budget committee approved various spending cuts targeting education, health and social service programs, Democratic leaders ordered the committee last month to stop meeting.

With Republican lawmakers continuing to balk at tax increases, the budget committee this week approved more than $51 million in spending cuts, on top of $80 million in earlier cuts, to nail down a balanced spending plan. It also zeroed out spending for an annual package of grants to nonprofit groups, community agencies and volunteer fire companies, a powerful political constituency in Delaware.

The latter move set off a political firestorm and led to partisan bickering and finger-pointing between Democrats and Republicans.

“The whole damn building’s disappointed right now,” House Speaker Pete Schwartzkopf, D-Rehoboth, said after a failed effort by Democrats earlier Saturday morning to pass an income tax increase in hopes of restoring some of the grant funding.

With no revenue package available to replace some of the unpopular spending cuts and facing political backlash over the lack of grant funding, Democrats decided not to bring the budget bill to a vote Saturday.

“We cannot pass a budget in good conscience at this time,” said House Majority Leader Valerie Longhurst, D-Bear.

While failing to agree on a budget, lawmakers did amend a bill increasing filing fees associated with Department of Insurance filings to earmark the additional revenue for grant appropriations.

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