Gov. Jack Markell has been touring the state to explain his two latest tax hike propositions to local organizations, stopping to speak at the Milford Rotary Club’s weekly dinner meeting Monday night, offering a presentation concerning the need to replenish the state’s Transportation Trust Fund (TTF) and generate revenue needed for a “Clean Water for Delaware’s Future” Plan.
Gov. Jack Markell has been touring the state to explain his two latest tax hike propositions to local organizations, stopping to speak at the Milford Rotary Club’s weekly dinner meeting Monday night.
Markell offered his presentation to about 25 rotary club members, outlining the dire state of both the state’s Transportation Trust Fund (TTF) and funding needed for a “Clean Water for Delaware’s Future” Plan. He outlined the need for additional funding for the TTF, which will be supplemented by a 10-cent gas tax increase as well as borrowing, to replenish the fund with $500 million over the span of five years.
Markell stated that the gas tax was last increased in 1995, and pointed out that a 10-cent increase is less than the gas tax of neighboring states. The 10-cent increase would bring Delaware’s gas tax up to 33 cents per gallon, as compared to recent increases in Pennsylvania where it is 61 cents per gallon, or Maryland where it’s 43.5 cents per gallon, he said.
Markell’s presentation outlined that the average person drives 13,476 miles each year, with a vehicle that gets an estimated 23.5 miles per gallon, using 573 gallons of gas yearly. The 10-cent increase would cost this “average” driver about $4.78 per month, or an additional $57 per year.
“This is not that complicated and this is not political. This is about math,” Markell said to the Rotary members. “If we want to continue to be a great state, we have to make investments in our infrastructure.”
The 10-cent increase would generate $50 million each year, with another $50 million generated by borrowing. The $500 million, 5-year plan would generate funding for projects that have been overlooked, including the 55 major road projects that have been delayed this fiscal year due to a lack in funding, according to a press release sent by the governor’s office on Jan. 29 after Markell announced his transportation funding initiative.
The second part of Markell’s presentation covered his plan to improve Delaware’s waterways, including local rivers like the Mispillion, ponds, streams and other bodies of water that have been neglected. Markell is proposing a property tax increase to supplement environmental measures that could help clean up the waterways and prevent further pollution that can’t be supported by the $30 million available annually through the existing Clean Water and Drinking Water State Revolving Fund.
According to his presentation, 94 percent of the state’s rivers and 74 percent of ponds don’t support healthy fish life, meaning that the maximum healthy limit of consumption of fish caught in these bodies of water is one or two fish per year.
“The condition of our waterways is embarrassing and it’s unacceptable,” Markell said.
The governor’s proposed environmental measures include toxics remediation, wastewater and drinking water plant upgrades, storm water infrastructure improvements, industrial upgrades, agriculture and cost share methods, as well as conservation and restoration measures.
The proposed tax increase would translate to $45 per year for the average residential home owner, but could mean much more for commercial entities and businesses, with a cap set at a yearly tax increase of $25,000. The proposed increase would generate approximately $120 million per year for these projects, according to the governor’s press release on March 4, when he went public with his proposal.
Members of the audience mainly questioned the fate of raised funds after any tax increases, voicing concern that raised funds could be moved around or spent in other areas if not restricted or earmarked properly.
Milford Rotary Club Program Chair Jim O’Neill said he’s one of the few people in Sussex County that whole-heartedly supports the gas tax increase, but is worried that the funds may not be used as is expected.
“The gas tax, we clearly see we definitely have a need for road improvements and bridge improvements,” O’Neill said. “Personally, if he was able to earmark the funds, I’d be in favor of it. I could see that that would be a nice, clear way of getting funds to the infrastructure that we really need. My concern is, is it secured once the tax is passed? I think he kind of indicated that it wasn’t, so I’m a little concerned about that.”
Markell, while he faced the questions head on, agreed that the possibility of funding sourcing other projects not included in his propositions is a valid concern. However, he explained that the money borrowed would have to be used for its intended purpose.
“It’s not just a promise to the tax payers, which would be important enough, but it’s a legal promise to the bond holders,” Markell said.
Milford Vice Mayor Doug Morrow, Sr., said the governor clearly explained what his intentions were with both propositions, but that more thought needs to go into the implementation, especially concerning the environmental improvements.
“The reason he’s doing both things is it needs to be done, we just have to work out how we’re going to raise the money in this tough economy,” Morrow said. “At this point, the city’s role is to listen to what the state is going to do in trying to figure it out and react to that. We’ve got a lot way to go, it’s just going to be tough getting there.”