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An Economic Reform Agenda for DelawareCommon-sense policies to bring prosperity back to our state

The ProblemDelaware desperately needs economic reform. We have a $600 million gap between our estimated revenues and budget; unemployment has reached 6.7% statewide – 10.1% in the City of Wilmington; and we’ve lost 15,200 jobs between January, 2008 and January, 2009. Meanwhile, spending has ballooned to $3,421.6 billion – up approximately 40% since 2001 when the budget was $2,429.  Further, these budget numbers only account for general fund expenditures – total spending when including all federal pass through monies and special funds is $8.3 billion. In this same time period, population has grown by approximately 10%.   While the “exported taxes” Delaware has related on may be in jeopardy, the root of our dire fiscal situation is not a revenue problem. It is a spending problem – a problem that impacts every Delawarean – from school children and parents, to senior citizens, teachers, farmers, entrepreneurs and everyone in between. The growth in our state government spending is unsustainable.The SolutionThe Caesar Rodney Institute’s Economic Reform Agenda rests of three key initiatives:

  • Increased transparency – CRI is in the process of creating a searchable online database of all state government spending called DelawareSpends.com. Sunlight is indeed the best disinfectant. With more people watching – from the media to citizens – waste can be identified, pork reduced and inefficient and ineffective spending eliminated.
  • Limit spending increases to population growth plus inflation
  • Institute a “PAYGO” policy that requires as new spending programs are added, lawmakers must offset the expense by eliminating existing programs that are outdated or ineffective.  Every day, Delawareans balance their spending decisions within their budget. The state should do the same.

A fourth initiative that should be undertaken is a reduction in the Gross Receipts Tax (GRT).

Why this worksEach of these reforms will work without any of the others being implemented. However, if all three of the main proposals are adopted simultaneously, Delaware government will be more accountable; more focused; and more disciplined. These actions send a signal to citizens and businesses that Delaware is serious about fiscal responsibility.Delaware’s fiscal problems can be solved if we focus on the root causes of the problems. In the late 1907s and early 1980s significant reforms were made to create a culture of discipline in regards to state government spending. Nearly 30 years later, additional reforms are past due.