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"The
next step may be to recommend
an action of the General Assembly prior to June 30. But she will
decide once she reviews the report," said her press secretary
Gregory Patterson. He pointedly emphasized the word 'may'.
That was in sharp contrast to the
bonhomme that prevailed at a joint appearance with
Wilmington Mayor James Baker in March at which she announced
formation of the taskforce and pledged cooperation in supporting
remedies for what the mayor described as 'structural' problems
in the city's ability to raise money to finance government
operations. Minner also is trying to deal with 'structural
problems' in the state's financial situation.
Patterson claimed the qualification
about whether to actually seek Assembly approvals, where
necessary, for any of the taskforce's recommendations was
present from the beginning, but, if so, it was not the dominant
theme.
Neither the governor nor the mayor
was made available for direct comment.
Patterson was also non-committal
about when, if ever, a move to seek legislative approval might
come. "She wants to take some time to review [the report] and
consider the recommendations," he said. The legislature, by law,
must adjourn June 30 and will not meet again until next January,
unless called into special session by the governor or its
leadership.
The report noted that Baker
submitted and City Council approved bare-bones operating and
capital budgets for the fiscal year that begins July 1. Deferred
capital borrowing, denial of cost-of-living pay raises to city
employees and cost containment measures, it said, have paired
slightly the long-term annual budget deficit projected by Public
Financial Management, a consulting firm, to about $9.3 million
from $12 million in fiscal 2007.
New York City and Boston, it said,
are just two of many municipalities around the nation that face
budget crises. "By taking action now to address these adverse
trends -- before the city's reserves are depleted and the
choices available become more stark -- Wilmington is positioned
to avoid such full-blown crisis [sic] and disruption," it said.
As Delaforum first reported, the
panel recommends a two-step approach. (The full text of the
report is available by using the link at the end of this
article)
Initially, it asks imposition of
$1-a-month surcharges on water and trash collection as ways to
obtain an equitable return on investment in city-owned or
-located assets -- specifically Hoopes Dam and Reservoir and the
Cherry Island Landfill. Setting up those or comparable revenue
streams would produce the most significant new revenue.
Both proposals, however, received
close to a thumbs down from influential legislators who were
members of the taskforce. State Senator Harris McDowell said he
opposes linking the city with Cherry Island because it would
send a signal of city support for the Delaware Solid Waste
Authority's bid to significantly expand the facility.
Representative Wayne Smith said he opposes any piggybacking on
water conservation legislation he has sponsored and which is now
pending in the Assembly. Smith previously said he also opposes
anything that would convey an impression his suburban
constituents were being required to 'bail out' the city.
McDowell is majority leader of the
Democrat-controlled state Senate and Smith is his counterpart in
the Republican-controlled House of Representatives. Neither
lawmaker responded to a Delaforum request for comment as this
article was being prepared.
Also recommended are a 2% city
lodging tax on top of the state tax; a tax on admissions to
entertainment events, increasing the annual fee the Wilmington
Parking Authority pays in lieu of taxes; and extending the
utility tax on Conectiv Power beyond electricity to include
natural gas. The latter, it was noted, has been charged since
early in the 20th Century and is considered a cost of doing
business, which is factored into the utility's rate base and,
therefore, spread among all its customers.
Political observers consider those
other recommendations possibly passable in the Assembly, but the
revenue they would yield is estimated to fall far short of what
the mayor and the consultants say is needed.
Looking beyond possible initial
legislative action, the taskforce recommends that it or a
similar body carefully study longer-term revenue sources. These
would include piggybacking on the state's incorporation
franchise tax and fees, state revenue sharing to support repair
and upgrading of infrastructure and other measures to spur
economic development.
The report trends lightly on the
matter of increasing the city's ability to annex adjacent land,
even to the point of bringing it into line with what other
municipalities have; and tiptoes around the issue of
establishing some kind of tax-generating gambling in the city.
Both would be highly controversial proposals.
Totally avoided, except for
references to the waste and parking authorities, which are
quasi-autonomous bodies, is the matter of exacting payments for
city services in lieu of taxes by nonprofit, church and
government organizations. More than 40% of property in the city,
measured by assessed value, is exempt from its real estate tax.
The report was delivered to the
governor on May 30, the stated deadline, but not made public
until June 2 when the governor's office 'released' it. William
Montgomery, Baker's chief of staff, reportedly did the final
editing and rewriting.. Public Financial Management was retained
to assist in its preparation.
Although all significant points in a
penultimate draft were discussed and, to some extent, disputed
at the final meeting of the taskforce, the recommendations
emerged intact in the final version. Although the taskforce took
no votes as such, the report noted that they were the ones,
among all that were considered, which had the strongest support
of a majority of the 24-member panel. It was co-chaired by Fred
Sears, president of the Delaware Community Foundation, and Scott
Green, senior executive vice president of M.B.N.A. America.
The section of the report which
received the most reworking was a preamble described as
"consensus guidelines." In essence, it was strengthened in its
endorsement of Wilmington's role as business and cultural hub of
the state, acknowledgement of considerable self-help measures,
and in pointing out that non-residents benefit greatly from city
facilities and services.
Whatever is done to generate
additional revenue, it said, should not include anything that
would provide a 'disincentive' to living, working or doing
business in the city.
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