Unfair and Irresponsible

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Unfair and Irresponsible
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Hits We Take

• 8 salary cut
• 3 days without pay
• No step
• Possibly no lane changes
• 50 increase in health insurance
• Summer school reimbursement ?
• Continued moratorium on NBC clusters
• PIT, NCC taxes, etc.

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Bad to Worse

• Furlough (i.e. day off without pay) Equal
  exchange between labor and pay
• Salary reductionsame or more amount of work for
  less

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Irresponsible

• Delawares largest employer leads race to bottom
  by slashing salaries and benefits
• Responding to economic chaos by creating more
  economic chaos
• YOU DONT FIGHT DARKNESS WITH MORE DARKNESS YOU
  TURN ON A LIGHT

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Reform TaxesRaise RevenueGrow Our Way Out Using
a World Class Education System
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Wrapping our minds around something achievable,
alsoFair and Responsible

• 8 salary cut is worth 90 million
• Low hanging fruit.the Rainy Day Fund has 186
  million

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Reform Taxes

• Personal Income Tax (PIT)
• Important tax for DE more than one third of
  General Revenue Fund comes from PIT
• In 3 decades, the PIT has been lowered 10 times
• Today the top bracket remains at 60,000 taxed at
  5.95 proposed to 6.95
• Last bracket change more than 10 years ago from
  40K to 60K
• Historical high percent mark was 19.8

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Potential

• Top Bracket of 60,000 is obsolete.
• New Top Brackets
• After Adjusted Gross Income (less deductions)
• Taxed at amount above bracket at higher rate
• New Progressive Brackets with increases hurt our
  members less

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Franchise Tax (corporate tax)

• Another example of lost opportunity for tax
  reform
• Not tied to profits
• Based on number of shares ranges from 35 to
  165,000 (proposed 180,000)
• 16 of General Revenue

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How it works

• Corporations With
• Up to 3,000 shares 35 (minimum)
• 3,001 to 5,000 62.50
• 5,001 to 10,000 112.50
• Over 10,000 112.50 for each additional 10,000
  shares not to exceed 165,000
• (proposed 180,000)

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Obviously Advantageous for Corporations

• Over 50 of US publicly traded companies are
  incorporated in DE
• Thats more than 400,000 companies

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Potential

• Higher capaffects only top corporations
• Bring LP/LLC into reality. These entities
  currently pay annual fee of 200 per year
  regardless of size or profit.

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Tax on Inherited Wealth (eliminated 2005)

• POTENTIAL
• Tax on estates over 4 million for couples (last
  guidelines 2004)
• Yield in DE 35 million to 45 million per year

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Other ChoicesOther Decision Makers

• Focus on the Legislature
• Put together organizing plan that activates all
  locals in the state and escalates.

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MESSAGE

• We need to grow our economy and public education
  and educators are vital in that strategy. We can
  not grow our way out with irresponsible cuts to
  essential public services.
• By simply making the state tax system more fair
  we can gain the necessary revenue to support
  public services and the Delaware quality of life.

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Secondary Messages

• The state deficit is not the fault of the
  educators who work hard to educate our children.
  Nor is it the fault of our children who need
  great public schools.
• Schools are trying hard to be more accountable
  we need the necessary funding to accomplish this.
• There are underlying deficits not dealt with in
  this budget education, jobs, health care.

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Timing

• Budget Markup begins Monday, May 18th and ends
  Thursday, May 28th
• Budget must be passed by law on June 30th
• Easter Break is April 14th through April 27th