This is not the way Gov. John Carney envisioned the final two weeks before the election.

The Democratic governor had hoped to avoid public scrutiny and the anger of lawmakers by quietly disposing of two bills that were sponsored by members of his own party and passed by the Legislature with bipartisan support.

That plan evaporated this week when House leaders foiled his plans, which were laid bare a day later.

That left Carney with little choice but to veto two tax bills just hours after The News Journal published an article online detailing how his strategy to use an arcane rule to block the legislation from becoming law without public notice fell apart in recent days.

Now, the governor must deal with an embarrassing episode just days before the general election. An episode that left Democrats struggling to understand why he would risk furthering the divide between himself and lawmakers in his own party.

"The governor takes his obligation to review legislation extremely seriously, particularly when considering a veto," spokesman Jonathan Starkey said. "These bills would have had a real impact on the lives of Delawareans, and the governor believes it’s more important to take a little more time and make the right decision, rather than making a decision based on political pressures or timelines."

The timing of the vetoes is unusual. Over the last 25 years, only four bills have been acted on by a Delaware governor this late in the year, mostly due to lingering constitutional questions.

That does not appear to be a factor with the legislation nixed by Carney on Friday.

One sought to provide a tax refund to low-paid workers who do not qualify for Delaware's earned income tax credit, an expense that would have been offset by limiting who qualifies for the benefit.

The second measure was aimed at shoring up the state's senior tax credit by creating an income cap to ensure only those most in need were eligible.

Rep. Paul Baumbach, D-Newark, said Carney's office first told him in September that it planned to veto his earned income tax credit bill because "the governor does not like to do tax policy piecemeal."

Rep. Kim Williams, D-Newport, on Thursday said she had yet to receive word on the status of her senior tax credit bill.

"There is not always a lot of communication about that kind of thing with this governor," she said. "I'm still holding out hope that he signs it, but I understand that's probably not going to happen."

Both lawmakers said they were baffled by the governor's vetoes.

"It doesn't make sense to me," Baumbach said. "Both sides agreed my bill is good for the working poor. ... I don't see what [a veto] accomplishes other than pissing people off."

What is a pocket veto?

Democratic leaders in the General Assembly – particularly in the House – are among those frustrated.

That's because until late this week it appeared the Governor's Office was hoping to use the obscure loophole in the state constitution called a "pocket veto" that would have blocked the bills from becoming law without Carney having to publicly provide the justification required of a typical veto.

To pull off the maneuver, the Governor's Office would have needed to take advantage of a longstanding custom as to how the state's executive and legislative branches interact.

According to state law, the governor has 10 days upon receipt of a bill to sign or veto the legislation. If he takes no action once that time is up, the bill automatically becomes law.

But in practice, the 10-day clock's start is delayed by the Legislature, which typically holds bills until the governor requests them – a custom that gives the executive branch time to research the legislation and plan bill-signing events.

A "pocket veto" occurs when the governor doesn't receive the bill by the constitutionally recognized end of a legislative session, which occurs at midnight on Election Day.

At that point, he still has 30 days to sign a bill but cannot veto it because state courts have recognized the existence of a hypothetical "pocket veto," but no governor has exercised it in at least the last 60 years.

Carney seemed poised to break that streak. As of Wednesday, his office had not requested delivery of the two bills, touching off a flurry of behind-the-scenes debate among lawmakers.

House Speaker Pete Schwartzkopf on Thursday finally opted to force the governor's hand by breaking custom and directing staff to deliver both pieces of legislation to Carney's office unsolicited.

“Our first obligation is to following the Constitution and to our members," he said via email. "Their bills overwhelmingly passed the General Assembly this year, and action needs to be taken on them. The clock was running out, so we made the decision to send them to the governor to either sign or veto them.”

Carney's rationale

The Governor's Office did not respond to questions Friday about why it would have pursued a pocket veto over the more traditional option.

But Carney's opposition to the bills was laid out in veto messages sent to the Legislature Friday, copies of which were obtained by The News Journal.

In those letters, the governor argues the earned income tax credit bill's reduction of benefits to some families so others also can receive the credit amounts to "a tax increase on an estimated 35,000 low-income working families.

Baumbach called that reasoning "unsound."

"The current program assists about 35,000 low-income working families, but it abandons about twice as many low-income working families, families that the federal EITC program assists," he said. This bill would have evened the playing field, providing all Delaware low-income working families the same match of their federal EITC."

Carney listed several reasons for his opposition to Williams bill, which would have limited eligibility for the tax credit to individuals making less than $50,000 a year and couples making less than $100,000.

It also would have moved the state's senior property tax credit from breaks on school taxes collected by counties to a reduction on income taxes paid to the state.

The governor said that last part "would create significant cash flow problems and filing burdens for thousands of taxpayers who are most in need of this relief."

And while he supports means-testing the senior tax credit, Carney said the state should develop a more streamlined and consistent approach that does not create a "tax benefit cliff'" that penalizes seniors who make $1 over the threshold.

Williams was not immediately available for comment after the vetoes.

What does this fight mean politically?

The dispute between Carney and House Democrats lays bare growing tensions among elected officials in a political party that has long controlled state government in Delaware just days before the Nov. 6 general election.

That's not likely to mean much for the central players. Carney is not up for re-election until 2020, and Baumbach is not facing a Republican challenger this year.

Williams is opposed by Republican James Startzman, but she handily defeated the real estate agent both 2014 and 2016.

This isn't the first time the governor and lawmakers from his own party have tussled.

A proposed assault weapon ban the governor requested – and later urged the state Senate to call up for a vote – was defeated in committee and then failed to get the support from Democrats needed to force it to a floor vote.

Days later, a proposal Carney had championed to change the way the Delaware General Assembly allocates tax dollars died in the final days of the legislative session without a single vote being cast after Democratic leaders in the House decided not to call up a constitutional amendment for a vote.

Commonly known as "budget smoothing," the bill – if it had passed this year and next – would have forced lawmakers to limit spending when revenues were high and save that extra revenue to help close future budget gaps. That measure included a proposal to institute certain means-testing on the state's senior tax credit, similar to what was included in Williams' bill.

House Majority Leader Valerie Longhurst, D-Bear, said at the time that her caucus wanted more time to get answers about the proposal.

Carney responded two days later by signing an executive order that requires his office to stay within certain fiscal restraints similar to what had been proposed in the "budget smoothing" bill.

The action does not bind the Legislature to follow suit, but it sets the stage for lawmakers to be held accountable for approving spending beyond what the governor proposes.

It remains to be seen how this latest discord carries over into the new legislative session in January.

Baumbach and Williams each vowed to reintroduce their bills once the General Assembly reconvenes.

Who does this impact?

Advocates for the bills Carney is now expected to veto say his actions will have consequences beyond the walls of Legislative Hall.

Baumbach's legislation, for instance, sought to put more money in the pockets of some of the state's lowest wage earners.

"It's good economic policy and it's great for improving the upward mobility of our state's hard-working residents," he said. "What really hurts the most about this veto is that even if we pass the bill next year, working families who stood to benefit from this legislation will have to wait yet another year to see the benefits."

Research has shown that children living in families who benefit from a refundable EITC see better outcomes as their parents use those funds to pay off debt, secure better housing and save for college, according to Kids Count Director Janice Barlow.

"I would be very disappointed to see a veto without a broader plan in place," she said. "And I haven't seen a broader plan."

Williams bill sought to protect the senior tax credit by ensuring it was limited to those who needed it most.

Republican lawmakers have proposed phasing out the credit entirely and in a move to control costs the Legislature last year reduced the total credit available by 20 percent to $400.

Today, about 65,000 people ages 65 and older receive the credit at a total cost of about $25 million a year. Williams said that expense is expected to balloon to $46 million by 2025 once seniors make up a quarter of the state's population.

"The senior property tax credit has consistently been on the chopping block year after year, targeted as low-hanging fruit whenever there are budget issues," she said. "My legislation, which passed with broad bipartisan support, would have stabilized and protected this credit, preserving it for years to come."

Contact reporter Scott Goss at (302) 324-2281, sgoss@delawareonline.com or on Twitter @ScottGossDel.

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