How to manage the growth of Delaware’s retiree population is increasingly a core subject of debate within state leadership, and a House committee hearing on a proposed increase to Delaware’s senior tax credit last week underscored an emerging split between lawmakers and the Governor’s office.
State Rep. Kevin Hensley is the latest member of Delaware's House of Representatives to propose expanding tax credits and other benefits available to Delaware’s seniors — in this case, a bill that would raise the state’s maximum senior real property tax credit to $750.
The Joint Finance Committee voted to bump the tax credit from $400 to $500 last year, but Hensley contends the additional fifty percent increase is needed to support fixed-income seniors struggling with cost-of-living increases.
Increasing the credit was largely uncontroversial among members during a House Education Committee this week, though lawmakers from both parties agree a means-test could help avoid directing tax dollars to already-wealthy retirees.
“I don’t think of it as, ‘you make this much, you get nothing,'" said state Rep. Eric Morrison, who initially raised the possibility of a means test. "I think there are seniors out there who should get $250 and there are others who should get $1,000, depending on need. That’s what I mean by means testing.”
But other lawmakers noted that Gov. John Carney vetoed a means-tested expansion of the senior real property tax credit in 2018.
The most forceful opposition came from Deputy Finance Secretary Rebecca Goldsmith, who argues that continuing to expand the benefits available to retirees would be irresponsible given other pressures a growing senior population places on the state’s budget.
“Increasing the maximum senior tax credit places more pressure on the state’s limited financial resources," she said, "making less money available for the very services we need to meet the demands of our growing senior population.”
Goldsmith adds increasing the maximum credit would disproportionately benefit seniors with higher-value properties. "The majority of participants in Kent and Sussex Counties would receive no benefit from increasing this benefit," she said. The average participant currently receives a credit of less than $400.
The proposal would cost the state an additional $8 million in fiscal year 2024, on top of the $28 million already spent on the senior tax credit program, which reimburses school districts for lost revenue.
The bill cleared the House Education Committee unanimously, though every committee member voted for the bill on its merits – a step down from a favorable vote.
