The Senate Labor Committee on Wednesday approved a bill that would give union members a tax credit for their union dues.
Senate Bill 72, sponsored by Sen. Nicole Poore, D-Delaware City, would let people claim up to $500 in tax credit to pay for union dues on state taxes.
Poore said union members used to be able to deduct dues from federal taxes so it makes sense for Delaware to allow them to deduct dues from their state taxes.
“This deduction was removed by Congress in 2017,” Poore said. “With that deduction being eliminated several years ago, the least we can do as a state is to offer that same deduction to Delaware union members on their state taxes.”
The federal change was a result of the Tax Cuts and Jobs Act. which suspended miscellaneous itemized deductions, which included union dues, until 2026.
Senate committees do not take public votes, but a check of the bill tracker shows Senate Bill 72 received three votes in favor and one on its merits.
Poore said that they will be changing the bill from a tax credit to a nonrefundable tax deduction, lowering the amount of money someone owes in taxes.
The fiscal note for the bill anticipates that it will cost the state $15.4 million in 2025 and 2026 fiscal years, based on an estimated 38,330 union members in Delaware.
Poore said that the fiscal note is based on the bill giving tax credits, but when she proposes a substitute bill for tax deductions, it will cost “significantly less,” though she did not provide any specifics on how much less it will cost or when the substitute will be released.
Sen. Dave Lawson, R-Marydel, said he’s uncomfortable voting for a bill that they don’t have the final version of.
“What we’re gonna as opposed to what we’re doing,” Lawson said. “That’s the problem for me…Here in the committee meeting is on the bill, and we don’t have it, nor a fiscal note…and I don’t know how we can do that properly.”
Senate Majority Leader Bryan Townsend, D-Newark, noted it’s up to individual members whether or not to vote on a bill, and that the Senate has had bills amended on the floor.
“I think saying, we don’t have a bill in front of us, especially for people who aren’t as familiar with the process…could be misleading to people who think that we’re somehow doing something in the darkness, or lacking in transparency or lacking in predictability,” Townsend said. “So this is one of the most…straightforward changes I’ve ever heard presented in committee.”
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Poore said they were waiting for the amendment to be circulated, but a timing issue prevented Lawson from getting a copy of the amended bill sooner.
During public comments on the bill, five union members expressed support for the bill, while one person spoke against the bill.
Chris Muntz, a business agent with the Plumbers and Pipers Local Union 74, said they support the bill because of how hard union employees work.
“In today’s economy, every dollar matters to our working families,” Muntz said. “Union members who continue to set the standard for wages and working conditions for everyone do deserve this relief that SB 72 provides.”
Rebecca Goldsmith, deputy secretary of finance for Delaware, said that they have reservations about the bill because it essentially requires state taxpayers to cover the cost of dues.
“In addition to concerns about precedent, cost, and the behavioral impacts, the bill has several technical drafting errors and issues,” Goldsmith said, “notably, its inclusion of the corporate income tax section of the code instead of the personal income tax section. For these reasons, the administration cannot support this legislation in its current form.”
Len McCartney, recording secretary for the Teamsters Local #326, said the bill helps union members get back what they’ve lost in dues.
“Teamsters Local No. 326 stands in support of this legislation,” McCartney said. “It’s very important for the union members to get some of this money back that they lost. And the fact that, back in 17, the entire country, every union member in the country was dealt a blow when they weren’t allowed to deduct their union dues anymore.”
The bill has 11 additional sponsors and cosponsors, all of whom are Democrats.
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