BREAKING: Gov. Markell Submits Final Budget Proposal

Filed in Delaware, Featured by on January 12, 2017

Here is the press release:

Dover, DE – Governor Jack Markell today unveiled a balanced Fiscal Year 2018 budget proposal that promotes increased job and educational opportunities for Delawareans, while maintaining fiscal responsibility that has repeatedly earned the state a AAA rating. The budget appropriates 98 percent of available revenues and sustains a fully funded Rainy Day Fund while upholding the Governor’s core commitments to schools, public safety and healthcare, and focusing on maintaining the work that has led to the State’s ranking as the third strongest economy in the country.

“The budgets we have enacted during the past eight years have been critical to supporting the strongest job growth in the region, great educational opportunities from early childhood through college for thousands more students, and a higher quality of life for all Delawareans,” said Governor Markell.

“This proposal shows that we can continue to invest in our progress, while still addressing the serious challenges that have resulted from unsustainable budget growth in a few areas and revenue sources that don’t increase when the economy improves. There is no sugarcoating that hard decisions are needed to make our budget sustainable and responsible over the long-term, but if we continue to focus on the investments that have the greatest impact on the current and future prosperity of all Delawareans, our state will thrive for years to come.”

As detailed below, the Governor’s budget recommendations would continue to strengthen Delaware schools, which have seen record-high graduation rates, a dramatic increase in access to high-quality early childhood programs, and tremendous growth in students earning college credits, industry credentials, and workplace experience before they graduate. The proposal also builds on successful economic development efforts, including the Downtown Development District program, which has leveraged $17 million in public funds into $330 million in private investments, and quality of life initiatives, while promoting other key priorities.

While keeping these commitments to Delawareans, the budget uses a mix of spending cuts and revenue increases to address the systemic challenges that have resulted in a $350 million shortfall. That deficit is based on the most recent revenue estimates for Fiscal Year 2018 and cost drivers that are increasing the size of the budget, including programs supported last year with one-time special fund resources.

“Our state’s encouraging economic growth has meant solid revenue growth in areas like personal income tax, but, unfortunately, much of our revenue portfolio is not tied to the economy’s performance,” said Secretary of Finance Tom Cook. “The revenue changes we propose adhere closely to the recommendations of the recent bipartisan revenue task force which established a blueprint for reshaping state revenues to better grow with the economy.” (Author’s Note: This ‘bipartisan’ revenue task force was heavily skewed towards the business priorities of the Delaware Chamber of Commerce, so it was ‘bipartisan’ only in the manner that Third Way Democrats like Markell, Carper and Carney view bipartisanship.)

Keeping Commitments to Strengthening Public Schools

The budget proposes an increase in public education funding, including: $28.4 million for 333 new teacher units to meet the demands of increased enrollment in public schools and $9.2 million for salary step increases for employees in Public Education.

The budget also continues the State’s commitment to provide access to quality early learning programs. The Governor proposes $8.0 million in additional funding for Early Childhood initiatives. These funds will be allocated for growth in 3, 4 and 5 Star-rated programs entering or progressing in the Delaware Stars program. These initiatives have resulted in an increase from five to 70 percent of low-income children attending high-quality programs.

The Governor has proposed $7.5 million to support recommendations of the Wilmington Education Improvement Commission to improve opportunities for underserved Wilmington students. Funding would provide additional resources to address the needs of low-income students in the Red Clay and Christina School Districts, including English Language Learners (ELL), and establish a Wilmington Redistricting Fund to support continued transition and implementation of a plan to give Wilmington residents the ability to better engage in their schools.
Spurring Economic Development and Improving Quality of Life

The Governor’s budget continues efforts to invest in economic development that creates jobs for Delawareans. The recommended budget includes:

$8.5 million to promote economic activity in designated Downtown Development Districts. Established in Fiscal Year 2015, this program strengthens and enhances downtown areas by subsidizing rehabilitation and construction up to 20 percent of the total project cost. Currently, eight downtowns have been designated to receive funding: Wilmington, Smyrna, Dover, Harrington, Milford, Georgetown, Seaford and Laurel.
$10.0 million for the Delaware Strategic Fund to provide targeted financial assistance to businesses.
$15.0 million for infrastructure improvements at the Port of Wilmington.
$2.9 million for the Riverfront Development Corporation.
$2.5 million to the National Institute for Innovation in Manufacturing Biopharmaceuticals. This will focus on bringing safe drugs to market faster and creating quality jobs for the citizens of Delaware.
$1.5 million for the Fraunhofer Center for Molecular Biotechnology (CMB) Vaccine Development. This funding is intended to create high-tech, high-impact jobs, spin-off businesses, new partnerships and alliances, and enable CMB to leverage its unique technologies in the biotech marketplace.
$1.0 million for the Bioscience Center for Advanced Technology.  The Center fosters academic industry research partnerships to support local bioscience businesses and help Delaware recruit, retain and create science-based jobs.

Improving Quality of Life

The Governor’s budget continues efforts to improve the quality of life in Delaware’s communities. The recommended budget includes:

$9.6 million for the Housing Development Fund which is utilized to create and improve affordable rental housing stock and increase economic activity.
$5.8 million for libraries including Duck Creek, Selbyville, Route 9/13, Harrington and Millsboro. Since Fiscal Year 2010, $44.6 million has been dedicated to library construction and the state has invested in the library system over the past eight years more than during any previous administration.
$4.8 million for redevelopment of strategic sites at NVF in Yorklyn and Fort DuPont in Delaware City.
$2.5 million to continue the Governor’s efforts to improve quality of life through statewide trails and pathways, a network of which has increased by more than 50 miles during his term.

Ensuring Public Safety

The Governor’s budget also makes important investments in the area of public safety, which include:

o   Continued upgrades of the 800 MHz public safety communications system, with $6.4 million allocated in the Recommended Capital Budget to support an upgrade of the infrastructure to the national P-25 interoperability standard, while also replacing transmitters, microwave and older end-user portable and mobile radio equipment.

o   Initial funding of $12.8 million for the construction of a new Troop 7 in Lewes.

Continued Commitment to Fighting Addiction Epidemic

The Fiscal Year 2018 Recommended Budget allocates $2.0 million of additional funding for the treatment of substance use disorders, including the creation of an Assertive Community Treatment team, expanded day services and for additional sober living beds.

Sustaining Responsible State Finances with Mix of Revenue Increases and Spending Reductions

“This balanced plan takes key steps toward structurally resolving the budget deficit not only for Fiscal Year 2018, but also by better positioning Delaware for the future,” said Governor Markell

To close a $350 million shortfall and put the state on a path to sustainable budgets in the long-term, the proposal includes some increases in personal income tax by limiting deductions and raising the rate of the top tax bracket by 0.2 percent. In addition, the Governor recommends an adjustment to the corporate franchise tax, increasing the State assessment on realty transfer tax, and an increase in the cigarette tax. Details can be found in the administration’s budget presentation and total a $212 million increase for the coming fiscal year.

 Spending reductions include measures to address the unsustainable growth of state employee health benefits and property tax subsidies, both areas Governor Markell has stressed in previous budget proposals that the State can no longer afford to fund at the same rate as in the past, given skyrocketing health care costs and major increases in use of the property tax subsidy.

To improve the long-term viability of state employee health care plans, while ensuring state workers have access to high quality care, the recommendations include a new plan for all employees hired on or after January 1, 2008; implementation of deductibles for all plans (some currently have none); elimination of the health insurance premium preference for two state employees who are married (Double State Share); and elimination of the contribution inequity for pensioners on the Special Medicfill prescription plan.

The Governor has recommended a balanced plan, which includes a combination of expenditure reductions and additional revenues. The proposed Fiscal Year 2018 Recommended Operating Budget totals $4,128.4 million. The proposed Fiscal Year 2018 Recommended Bond and Capital Improvements Act totals $555.3 million and includes $270.5 million in state agency capital projects and $284.7 million in Transportation projects. The Governor also set aside $30.0 million for Grants-in-Aid.

The big news is that he proposes over $200 mill in new revenue, including an increase in the corporate franchise tax.  The bad news is that he has once again refused to add new tax brackets for those making serious money.  The 0.2 increase in the current tax bracket means that those earning $60,000 a year will pay the same increased percentage as those earning over $1 million annually.

He is again proposing to cut state employee health and pension benefits, and to remove the property tax deduction for seniors.  Meaning, once again, the only group being spared meaningful obligations are his wealthy Greenville friends.

Well, I guess it could have been worse.  If the JFC accepts this as a starting point and then makes the proposal more Democratic, aka, less unfriendly to state employees and seniors, and places a greater obligation on those making big bucks,  good.  It’s gonna be a battle to make sure that happens, though.

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  1. nemski says:

    Markell might not be a Democrat anymore, but he sure looks good in that leather jacket of his. I guess he’s got that going for him.

  2. Let’s talk about those corporate franchise taxes, shall we? Two years ago, the House Democratic Caucus supported increasing those taxes. But Pete Schwartzkopf ignored the caucus, crossed the Hall and cut a deal with the Senate R’s. Had the Governor prioritized these increases then, we wouldn’t be facing this shortfall now. And had Schwartzkopf acted like a Democratic leader instead of cutting a deal with Senate R’s that that led to, wait for it, more funding for cops in Sussex County, the Democratic brand wouldn’t suck as bad as it does now.

  3. puck says:

    “Well, I guess it could have been worse.”

    Give it a few months…

  4. puck says:

    Two things:

    1. Nobody is out there making the case for tax increases (except John Kowalko, and he could use some company). If they pass, they will pass sheepishly at midnight without comment. Then when Republican candidates hammer us on tax increases, we will have no foundation in public debate to fall back on.

    2. This budget, including the tax increases and benefit cuts, WILL be an issue in the special election. Stephanie Hansen had better have some good answers ready.

  5. A real Democratic candidate would run against getting rid of the senior property tax exemption (pretty sure that she has taken that position) and against stiffing people who work for the state (there’s lots of them in every district).

    There’s little in the way of a tax increase, but, if I were her, I’d argue that, instead of raising taxes on those making $60,000 a year, I’d raise them on the wealthy who have skated.

    In other words, run like a Democrat.

  6. puck says:

    “There’s little in the way of a tax increase” … you’re not thinking like a Republican. Tax increase, no matter how small, will be the Repubs’ first line of attack.

    And if we don’t win in SD10 all hell will break loose in June.

  7. anonymous says:

    “run like a Democrat.”

    Stephanie Hansen? Not on your life. She has the strong foundational values of any other Republicrat who ran for office to improve her station in life — in other words, herself first.

    This notion that she’s turned over a new leaf is so fucking charming. I notice it’s being touted by some of the same suckers who claimed Tom Gordon had turned over a new leaf, too.

    LOTE (lesser of two evils) candidates got Democrats where they are today — completely shut out nationally, and getting ready to lose more seats in the General Assembly. Why look for better candidates when we know what kind of self-dealing we can get with the old ones?

  8. mouse says:

    My stress level is going up. So wish there was a war to pressure and embarrass these assholes that would register with the reality show obsessed electorate

  9. Anon says:

    Wow, what a surprise. Jack Markell dumps a load on state workers on his way out the door. He should have had his face on a Trump for President poster.

  10. anonymous is showing their hand a bit, no? People who care about holding the line on current land use law understand the importance of what Tom Gordon brought to New Castle County residents in his hiring of Sid Liebesman who successful defended the laws on the books against Stoltz at Barley Mill Plaza and against Toll Bros at Centerville Road.

    If the cowardly anony cares about other Gordon drama like the story about Dana Long’s employment (Long was hired by Coons) they might look into Marcus Henry’s employment (hired by Clark, fired by Grimaldi, rehired by Gordon and promoted by Meyer). The list goes on.

    I really care about land use and in that regard, Gordon was the shit.

    :-)

  11. anonymous says:

    My hand? What a pathetic load of shit you are.

    Nice to know what you’ll sell out for. But we all knew that already. Your continual mistake is in thinking that what’s good for you is for the common good. I suppose you were OK with the millions set aside for those two connected landowners, too.

    My feelings about Coons are well-known, BTW. See, I can change my opinions about people when they show their true colors. You might try watching what they do instead of listening to what they say. Too bad you don’t know how to do that. But you are loyal, which is all that matters to Democrats.

    The issue about Gordon drama, BTW, is that it’s all about Gordon. No Gordon, no drama. Which will be nice.

  12. ModernProgressive says:

    Businesses ought to be looked at as tax cattle. So you want to make millions if not billions off of the sweat labor of the people of our state?

    We have no problem whatsoever with you earning big $$$. Just be prepared to give some of it back.

  13. Anono says:

    The current Gov, should have NO say. He pushed Bloom Energy on us and to top it off gave a cushy job to Blevins. Money was spent on a “National” search and then this is what we get. Typical Democratic way!!! What a joke!

  14. Anono: George Bernard Shaw once described second marriages as the ‘triumph of hope over experience.’

    To me, reading your comments with the expectation that you might say something meaningful is the same thing.

  15. anonymous says:

    @Anono: You mean government should not carry on its mission just because you don’t like it? I thought conservatives were all about maintaining tradition.

    This guy is the site’s appendix — useless but inflammatory.

  16. anonymous says:

    @Nancy: Sorry I overreacted, but really. Yours is an example of all the harm that can be done by single-issue voters.

  17. Anono says:

    When time & money is spent on a search and then they give the job, to an unqualified person. THAT is the problem. And you people wonder why Trump WON, because of the waste!!!

  18. Anono says:

    @ El Som, i guess you don’t care about the waste of money. The incoming Gov., should choose someone that is the most qualified and someone they could work with.