Meyer transition committee examines state finances

Members of the Governance Innovation & Operational Excellence Committee – a transition committee for incoming Gov. Matt Meyer – discussed the state’s Department of Finance at a Dec. 4 meeting, saying it is well run, but there are some changes that could be made regarding the flow of money.

Committee member Dave Singleton said spending per capita is high in Delaware, but what happens if the state loses its effective monopoly on corporations?

“What would we do? Would we cut back on services? Would we raise taxes?” he asked. “We think some attention needs to be paid to that because we are facing some challenges to that. Things could change, and there have been some court decisions that aren’t favorable.”

No one mentioned it, but billionaire businessman Elon Musk recently repeated his warning against incorporating in Delaware after a Chancery Court ruling denied him a compensation package despite approval by shareholders.

One committee member mentioned that the State of Nevada has copied and pasted Delaware’s Chancery Court statutes, and corporations have left Delaware for other states.

Musk’s Tesla is now incorporated in Texas after recently leaving Delaware.

In light of potential corporate exits, the member warned about raising corporate franchise taxes too much.

“Because we’re funding so much of government with the corporate franchise tax, we have to be very cautious that we are not slapping the hand that feeds us,” she said.

On the topic of revenue, Singleton said a centralized system should be considered as opposed to the current system that allows separate state agencies to collect fees, fines and other sources in revenue.

“We think there might be a benefit in having those revenues all flow to a central place, and then the money can be appropriated as needed,” Singleton said.

The Governance Innovation & Operational Excellence Committee is one of four that is meeting to form policy recommendations for Meyer and his incoming administration.