State revenue surplus stirs tax credit proposals
This year’s state revenue surplus may translate into new or increased tax credits for some Delawareans.
The budget-writing Joint Finance Committee voted last week to restore a $500 tax credit for senior citizens that was cut to $400 in 2017 to fill a state revenue shortfall. Lawmakers from both parties have advocated to restore the credit, which some 70,000 residents received in 2021.
State Rep. Kim Williams (D- Stanton), a member of the JFC who advocated for restoring the credit, says for senior citizens living on fixed incomes, even the $100 increase can make a meaningful difference. “This may not seem like a lot of money, but sometimes it’s whether you’re able to pay your utilities that month, able to get to the next month, or able to get to the next paycheck," she said.
The JFC is also considering other tax credits, including an income tax credit for interest paid on student loans and a credit for low-income residents.
Another proposal with bipartisan support would give a $1250 credit to childcare workers, with higher credits possible depending on the education level of the worker and other factors.
State Rep. Mike Smith (R-Pike Creek), the bill’s cosponsor, says this credit could be a priority because of a shortage of childcare options – driven in large part by low incomes for childcare workers. That shortage leaves many parents struggling to balance their children and their jobs.
“The point of making this tax credit as opposed to other industries," he said, "is that this tax credit for one industry will directly affect other industries by helping un-marginalize that labor market.”
The childcare worker credit would cost the state approximately $5 million in revenue. State’s revenues currently exceed Gov. Carney’s proposed budget by nearly $1.3 billion.