Trade group: Giving union members tax credit for dues unfair

Bill allowing union dues to be deducted from taxes introduced in Senate

The president of a state contractors group says a proposed bill that would allow union members to claim a tax credit for their union dues is unfair.

Senate Bill 72, introduced by Sen. Nicole Poore, D-Delaware City, would let people in unions claim up to a $500 tax credit for union dues.

Edward Capodanno, president of the Associated Builders and Contractors Delaware, said that the bill is unfair because it favors one specific group.

“We’re not real happy about it,” Capodanno said. “You’re going to give a tax credit for someone to pay union dues when you have plenty of companies out there who are paying membership dues to business organizations who aren’t given a similar type of credit…I don’t see why we’d do it for one specific group if we’re not gonna do it for everybody.”  

Efforts were not successful to reach Republican legislators for comment.

Matt Revel, communications director for the Senate Republican caucus, said that they will not be commenting on the bill at this time.

Capodanno said his group will be lobbying against the bill.

ABC Delaware operates on the merit shop philosophy, which, according to its website, is about promoting “the best management techniques, the finest craftsmanship, and the most competitive bidding and pricing strategies in the industry, regardless of labor affiliation.”

A merit shop is similar to an open shop, where workers are not required to join a union as a condition of employment. 

ABC Delaware’s website also states that “more than 87% of the U.S. construction workforce has freely chosen not to join a union.”

If passed, the bill would take effect for the 2024 tax year and has been assigned to the Senate Labor Committee.

Poore initially began asking for cosponsors to the bill in January.

According to the Bureau of Labor Statistics, union membership in Delaware has decreased over the past year, going from representing 9.7% of the workforce in 2021, or about 42,000 workers, to 8.5% in 2022, or about 38,000 workers.

Delaware is lower than the national level, where 10.1% of workers are in a union as of 2022, or about 14,285,000 workers, down from 10.3% in 2021, or about 14,012,000 workers.

Capodanno said if all the unions in Delaware get the $500 tax credit, which includes teachers, building trades and service employee unions, it could cost the state up to $10 million a year.

“How does that impact the state budget in regards to a fiscal note? So I think we need to take a look at the fiscal note to see exactly what this is gonna cost the state of Delaware from a tax credit standpoint,” Capodanno said.

There currently isn’t a fiscal note for the bill, which has 11 cosponsors and additional sponsors, all of whom are Democrats.

It has been sent to the Senate Labor Committee but is not yet on an agenda.

Sam Haut