Several representatives of Delaware unions praised a bill that would allow state tax deductions for union dues, a practice no longer allowed on federal taxes.
Senate Substitute 2 for Senate Bill 72, sponsored by Sen. Nicole Poore, D-Delaware City, would let people claim up to $500 in a tax credit to pay union dues on state taxes.
Opponents say it’s unfair to allow union members to get credit for dues when others cannot claim membership dues, but the bill passed the House Revenue & Finance Committee with seven yes votes and two Republican members voting against it. Voting no were Rep. Ronald Gray, R-Bethany/Millville/Fenwick Island, and Rep. Mike Smith, R-Pike Creek, voting against it.
Among those supporting the bill were members of the AFL-CIO, Plumbers & Pipefitters UA Local 74, Sheet Metal Workers Local 19, and the Delaware State Education Association.
Robert Gadsby, a business agent with the Sheet Metal Workers Local 19, said the bill would help its members deal with inflation.
“Not only am I a union member, but I’m also a resident of Kent County who has been struggling with inflation like many of us here,” Gadsby said. “So I think this is a good bill. It’s a strong bill. This would help a lot of our members.”
James Maravelias, the president of the Delaware AFL-CIO, said they support the bill because of the positive impact it will have on their members after the deduction was taken away by the federal Tax Cuts and Jobs Act of 2017.
“On behalf of the 38,000 active and probably 20 to 25 retirees that still pay union dues, this is just a small act that they can do to give back and give a little bit of relief to these union members that were done unjustly in 2017 by somebody that was very vindictive and for no other reason…than spite,” Maravelias said.
Related Story: Union dues bill passes Senate committee
The 2017 federal law suspended miscellaneous itemized deductions, which included union dues, until 2026.
According to the bill, a deduction couldn’t be taken if someone’s already gotten a federal deduction for union dues, or if the dues are used to pay for lobbying, political expenditures, employee benefits or pension contributions.
The bill passed the Senate May 18 after being substituted following the bill’s release from the Senate Labor Committee May 10. It now heads to the full House floor.
A fiscal note for the bill estimates it won’t cost anything in the 2024 fiscal year, because it wouldn’t take effect until Jan. 1, 2024, if it becomes state law. If so, it will cost Delaware $300,000 in the 2025 and 2026 fiscal years.
According to the fiscal note, there are around 38,800 union employees in Delaware.
Tyler Micik, director of public policy and government relations at the Delaware State Chamber of Commerce, said they oppose the bill because other groups in the state don’t get the same benefit.
“There are hundreds of nonprofits, trade and professional associations, chambers of commerce, homeowners groups and associations, private clubs, alumni groups, and more in our state,” Micik said. “None of them should be in line for a membership benefit, like a tax deduction, simply because of an individual’s membership status. It’s also unfair to enact a proposal like this since it would favor one club over others.”
Kevin Fasic of the Associated Builders and Contractors said he wasn’t sure if the bill is legal.
“My question is, is it legal? Can the state actually do this?” Fasic said. “Bottom line is I think that the House council should take a very close look at whether or not this bill is going to pass muster under market regulation.”
Todd Farally, political director of the Sheet Metal Workers Local 19, said the comments made by Fasic and Micik were inaccurate.
“This has been legal standing for decades on the federal level, so why wouldn’t it be legal on the state level? Secondly, private clubs…nonprofits… don’t put tax revenue back into the state,” Farally said. “They are not apples to apples. These are scare tactics being put forward. This was something that was precedent for decades that was stripped away from workers.”
The bill has 16 sponsors and cosponsors, all Democrats, Those numbers rose after it was introduced in the Senate.
Share this Post