Republicans in Delaware have produced an agenda aimed at reducing poverty in the state.
For years, the Republican-Democrat stereotype has been that Democrats help middle- and lower-class citizens, while Republicans create policies that benefit businesses and the wealthy.
But on Wednesday, Delaware Republicans released an agenda which they believe will reduce poverty in the state and hopefully make it the lowest-poverty state in the nation by 2024.
“I don’t think they think of us as [focused on] poverty because we’re always involved in trying to make the economy stronger,” said Senate Minority Leader Gary Simpson, R-Milford. “What people are overlooking is by making our economy stronger we’re lifting people out of poverty. If you have good jobs and good wages, living in better homes, parents are able to send their kids to good schools.”
Delaware has a poverty rate of 12.4 percent and an unemployment rate of 6.3 percent, according to Spotlight on Poverty data. The Homeless Planning Council of Delaware served more than 2,500 homeless adults and children in 2015. Spotlight on Poverty also reported there are 14,383 residents on welfare and as many as 63,000 children on food stamps.
Republican legislators said they hope creating tax-cutting incentives and making poverty programs more accountable for its successes will make long-term differences. They added reducing government and allowing residents to be successful on their own is also an important step toward reducing poverty.
Some Democrats have voiced their concerns that the agenda still emphasizes benefitting big business rather than those who really need help.
However, Republicans said they hope the pieces of legislation will become a bipartisan effort and will start drafting them during this legislative session, which ends June 30.
“We think it’s important we all work together on this,” Simpson said. “Too often, especially on the federal level, we’ve seen so much partisan bickering and nothing getting accomplished.”
Simpson said the agenda will be an eight-year process to look at how to lift people out of poverty for the long haul.
Accountability is huge
A large component of the agenda is focused on making nonprofits accountable. Republicans said a lot of money is thrown at programs aimed at helping low-income individuals, but the government has no idea if they are benefiting from those programs.
“A lot of these issues we’ve talked about in this initiative will be looking at results,” Simpson said. “If a program is not working, cut it out. And that’s where government has failed on the federal and state level. We just keep proliferating programs and throwing more money at them without looking at the results of what we get.”
He said a “Pay for Success” funding mechanism will create accountability on programs, making it more likely an individual will pull themselves out of poverty.
Private investors front the money for a “Social Impact Bond” directed at funding a program with specific measurable goals, such as reducing recidivism. If the goals are met, the government then pays the investors with interest.
Republicans said it makes it less risky for the government to invest, and if a program is successful, it saves money in the long run because fewer individuals will continue to need support. Although not always fans of task forces, Republicans plan to create one to study this form of financing to pay for social programs.
“I very much support the exploration of whether the “Pay for Success” model might help us achieve greater outcomes for individuals and families experiencing homelessness in Delaware,” said Phyllis Chamberlain, executive director of the Homeless Planning Council of Delaware. “’Pay for Success’ is a model that is being tested in several communities regarding how we can both improve housing conditions and reduce costs to health and corrections systems at the same time.”
Beyond the state of Delaware, Republicans also are calling for federal legislation that would send all anti-poverty funds to the states in the form of block grants each year. In addition, there would be accountability on state governments to spend those grants on nothing but anti-poverty programs.
Tax credit programs as an incentive
The Republican agenda to reduce poverty also includes four tax credit programs, which they said serve as an incentive for the fortunate to help the less fortunate pull themselves out of poverty.
In an attempt to reduce homelessness, Republicans plan to create a $500,000 Poverty Housing Tax Credit modeled after Delaware’s Neighborhood Assistance Act tax credit.
The NAA Program encourages businesses and individuals to invest in poverty programs by providing state tax credits equal to 50 percent of the investment. Each year, a maximum of $500,000 in tax credits is available statewide. The maximum tax credit available to any taxpayer is $50,000.
Republicans said they agree if individuals and families find housing, it reduces the impact from the budget as well.
Receiving a good education also is an important step to reducing poverty, so Delaware’s students should be able to choice into schools, Republicans said.
They would like to give tax credits to individuals and organizations that donate to a nonprofit that funds scholarships for low-income students to attend private school. The tax credit would be limited to $25,000 per individual or business, and capped at $1 million for the first year.
The Department of Education would not be in favor of this legisation, said spokeswoman Alison May.
“We have opposed the idea of using public funds for private schools, usually when talking about vouchers or a similar scheme, and this proposal would also divert resources from the state budget to private schools,” she said.
Republicans also said they believe receiving an education is important in adulthood as well, and that there should be more opportunities for trades training.
They would like to provide tax credits for companies that pay for certified external training for long-term unemployed Delawareans whose household income is beneath the poverty line. The credit would cover the cost of training up to $5,000 with an annual cap of $1 million.
Similarly, Republicans also would like to create a $5,000 tax credit for covering the first year of a newly-hired apprentice who lives below the poverty line, has been unemployed for six months or longer and/or is newly released from prison. The annual cap for that tax credit also would be $1 million.
Republicans also are endorsing Democratic efforts to make the Earned Income Tax Credit refundable. State Rep. Paul Baumbach, D-Newark, created the legislation which makes the EITC refundable in Delaware at a rate of 6 percent of the federal EITC. Republicans said they will encourage its passage in the Senate.
Better on my own
While there are several workforce training programs in Delaware that help residents get into trades like auto mechanics, HVAC and carpentry, Republicans said there’s not enough data showing how successful these programs are. The agenda also includes legislation to create a commission that would study how these programs can be measured for success.
Paul Morris, Assistant Vice President of Workforce Development at Delaware Technical Community College, said trades programs in Delaware are highly successful at placing students in jobs.
He added training programs should revolve around the types of jobs that are available in the community, and Del Tech achieves that by getting to know the businesses that are hiring.
“We have a lot of programs that are getting students, getting them trained in workforce fields and making sure we have employers at the table. If there’s more of that in the state I can only see that as a good thing,” Morris said.
Once these programs are proven successful, Republicans said individuals should have access to those programs. Several students in Delaware receive SEED funding, a scholarship that provides free education for their associate’s degree. Republicans said non-college and university programs that focus on trades should also be eligible for the funding as well.
But even after receiving training, there are still too many boundaries when looking for a job, Republicans said. They said the amount of jobs that require a license is too high, with 49 separate low-income occupations, including cosmetologists and barbers. Republicans already have started discussing the issue with Gov. Jack Markell, D-Delaware, and hope to reduce burdensome licensing requirements.
The Republicans also would like to create a “cottage food” industry where government would allow food producers like bakers to use their home kitchens for production. They believe this would create more jobs, and allow individuals to let their talents shine.
Simpson said he doesn’t believe government has done enough to lift people up. He said he hopes the agenda will give Delawareans the opportunity to leave the crutch of government and support themselves.
“I see kids that expect government to support them and we would all be better off if they had a different outlook on life that, ‘Government’s not to support me,’ that, ‘I’m going to do better on my own,’” he said.
Democrats are still concerned
Since releasing the agenda Democrats have expressed mixed feelings about the ideas outlined. Senate President Pro Tempore Patricia Blevins, D-Elsmere, said she doesn’t agree with some of the ideas, and is concerned various programs may lose funding. However, she applauds Republican efforts to address an important issue.
“Our entire state bears the costs of poverty, and we all share a responsibility to fight it. We can’t win that fight without willing partners in the Republican Party. I am proud of the work our caucus, and our colleagues in the House, have done to address not only the financial symptoms of poverty, but the root causes: a lack of educational and economic opportunity, insufficient access to health care, blighted neighborhoods, and a corrections system that often stunts our youth’s potential before they reach adulthood,” Blevins said in a statement.
“While I don’t agree with some aspects of their plan and am concerned that on balance it would divert resources away from proven programs, I do see it as a good faith effort from our friends across the aisle to embrace a fight that we have led for decades.”
The Republican-led tax credits took some heat from Delaware Democratic Party Chairman John Daniello, who released a statement saying; “While I’m glad that Senate Republicans have decided Delaware’s economic growth ought to include the very people their policies have left behind for generations, the sad fact is that their plan offers little in the way of solutions that would do anything to help the working poor….the Republican plan of replacing proven safety net programs with a litany of tax credits for wealthy benefactors and corporations simply doesn’t add up.”
He added that if Republicans were more serious about fighting poverty, thay can join Democrats in supporting other “proactive, outcome-driven efforts like sentencing reform, providing family leave, increasing the minimum wage and expanding early childhood education—things they’ve routinely opposed in the General Assembly and beyond.”
In response, the Republicans offered an attack of their own. Senate Minority Whip Greg Lavelle, R-Sharplet, said the Senate Republican Caucus want to thank Markell, Attorney General Matt Denn and other Democrats who have responded to the agenda. However, he said they are disappointed by Daniello’s comments.
“We were terribly disappointed by the aggressive, nasty attack issued by the Delaware Democratic political machine,” Lavelle said in a statement. “We hear constantly that people are sick of Washington, DC politics and flame throwing. That kind of response has no place in a genuine discussion on how to make life better for the many Delawareans suffering in poverty. They deserve much better.”