government costs seen
helping to balance state budget
"no [new] taxes, no layoffs, no additional pay cuts," Governor
Jack Markell submitted a proposed fiscal 2011 state budget which
relies on "more efficient government" to close more than half of
a $253.7 million gap to remain in balance.
An extensive list
of "efficiencies and savings," totaling $143.6 million, range
from merging divisions within the Departments of Education and
Natural Resources & Environmental Control to switching from
weekly to bi-weekly grass cutting at the Department of Health &
Social Services Holloway campus.
director of management and budget, refused to be pinned down on
which of the 47 moves will require legislation, which will be
ordered by the governor and which will be at the
discretion of cabinet secretaries and other officials. She did
say that "none of this is wish list; they're part a balanced
Pressed at a news
media briefing the evening before Markell formally unveiled his
budget proposal on Jan. 28, she acknowledged that some
opposition to specific items can be expected. "Some people are
going to be uncomfortable with these recommendations -- that's
part of the process," she said. Anything removed from the list
must be replaced by something else with an equal or larger
pricetag, she explained.
"It's our budget
and we're going to get it done," she said.
introduction to the
briefing, the governor said that, while Delaware "is not
immune" to the effects of the so-called 'Great Recession', its
reputation for fiscal responsibility -- as evidenced by its
sustained triple-a bond rating -- stands it in better stead to
cope with financial problems than many of its sister states.
Moreover, he added,
"the challenges are not as significant as last year's [budget]
shortfall, but they are [still] serious."
Markel called the
proposed $3,171.3 million general-fund budget and the $356.5
million capital budget "balanced and responsible."
budget is 2.5% higher than the one for the current fiscal year,
which ends June 30, but Visalli said that comparison is
misleading because federal stimulus money is being used to finance some things that otherwise would have had to
be paid for out of the state budget. Absent further stimulus
legislation, the amount estimated to be available for fiscal
2011 will be $123.5 million, down from $233.7 million this year.
pressures, Markell said his proposed budget preserves core
governmental services as a time when it is necessary to respond
to recession-driven increasing demand for services. What's more,
he added, Delaware in the coming fiscal year will continue to
peg spending to 98% of anticipated revenue, keep its 'rainy day'
emergency fund intact and fully fund its employees' pension
liability. "Other states have tapped into their pension plans"
to make ends meet, he noted.
budgets by their nature reflect the executives' priorities and
programs, the one Markell handed the General Assembly clearly
embodies the themes he has repeatedly harped on since taking
office last January -- jobs creation through aggressive economic
development and unstinting support of public-school education,
while eliminating waste and inefficiency in state government.
He said the
eclectic list of proposals affecting state agencies was compiled
from suggestions and ideas received from state employees and the
general public. The list demonstrates "we're serious about
finding efficiencies and reducing the cost of government," he
Visalli said the
proposed budget toes the line drawn by Delaware Economic and
Financial Advisory Council in its December revenue estimate. The
nonpartisan council, which includes persons with recognized
professional expertise in the field of finance, will meet again
in March, April, May and June and the Assembly is bound by law
to accept its June figures as the basis for the budget it must
enact by June 30. The interim reports will guide the Assembly's
Joint Finance Committee as it crafts a final version.
Visalli said she
would not accept as necessarily true that the nearly
18-month-long downward trend in council forecasts -- driven
mainly by a significant falling off of receipts from the
personal income tax -- will continue through the spring.
The proposed budget
provides for $9.3 million in "additional reduction in personnel
costs associated with complement reduction in the current fiscal
year." That means vacancies created by retirements and other
normal attrition are go unfilled. The rationale behind the
division mergers in Education and Natural Resources, Visalli
explained, is to position personnel to cover the functions of
vacated positions. Also indicated is using fewer part time and
The 2.5% pay cuts effected this year by giving state employees
five unpaid 'holidays' will remain in effect during the coming
fiscal year, she said.
Persons hired after Jan. 1, 2011, will be required to pay a
larger share of the cost of their health-care insurance and
pension plan. Budget documents made public do not provide any
details about that. They do note that resultant 'savings' will
increase in future years as those people gradually constitute a
larger portion of the state workforce.
Both the governor
and Visalli emphasized that proposed budget's education
component is focused on reductions in 'back-office'
spending while "protecting the classroom." It calls for "driv[ing]
public education administrative efficiencies through
consolidated procurement and purchasing" to the tune of nearly
$1.5 million. The governor had said he does not favor forcing
consolidation among the state's 19 public school districts.
The budget document
does not specify how the limited consolidation is to be
accomplished. The apparent intention is to have districts get
together to determine how to do that. Visalli spoke of providing
incentives to encourage that. "We support it; we don't control
it," she said.
capital budget provides that school districts with capital
projects underway are to be allowed to proceed with them.
Brandywine, which intends to begin construction of a new
Brandywood Elementary School building, is among districts listed
in the proposal.
component of the capital budget is directed toward restoring
Delaware Economic Development Office's strategic fund, which is
used to "provide customized financial assistances" to businesses
seeking to locate facilities in Delaware or significantly expand
operations in the state.
Visalli said that,
with interest rates at historic lows, now is not the time to
skimp on capital projects, which are mostly financed by sale of
bonds. "The bond bill is a lever for job creation. ... We have a
huge opportunity to make some capital investments that would,
five or 10 years ago, cost a lot more," she said. "We can use
capital money to create jobs at the lowest cost ever."