COGD Comes Late to Tax Increasing Delaware

This year, Delaware “celebrates” its Cost of Government Day four days after the national average.  The Cost of Government Day report measures the number of calendar days it takes the average American to pay for the cost of spending and regulatory burdens at all three levels of government: federal, state and local.  In 2012, residents of Delaware must labor for 201 days just to pay for the cost of government.  In other words, they only have 164 days to save for themselves.

Despite being the “home of tax-free shopping,” Delaware has faced substantial tax increases over the last ten years.  Between 2003 and 2012, residents faced cumulative tax increases of $2.81 billion.  In 2012 alone, Delaware taxes increased by $552.97 for every man, woman and child.  Comparing Delaware nationally, the state and local tax burden falls just below the 9.8 percent average at 9.6 percent.

These tax increase are coupled with a significant overspending problem.  During FY2012, overall state spending increased by 6.15 percent and the FY2013 budget increases spending by 2.2 percent.  During a time when the state legislators should be making sharp cuts to spending, state employees are experiencing pay and benefit increases. According to the Bureau of Labor Statistics, compensation costs for state and local government workers are an average of $12.44 higher than their private counterparts. This year, Delaware state employees will see a 1 percent increase in their salaries during FY2013, on top of their 2 percent raise in salary and benefits during FY2012.

In order for Delaware to move up in state rankings, cuts to spending need to be made in addition to budgets that are tax-hike free. Until residents see their state spending decline - Happy Cost of Government Day Delaware!