Gov. Jack Markell signed a $3.9 billion 2016 budget early Wednesday morning.
The budget contains increases in motor vehicle fees in another temporary fix for the state’s transportation funding woes.
Earlier plans to cut the state’s already modest aid to cities and counties via real estate taxes were abandoned as local governments mobilized against the proposal. An earlier proposal to have state employees pay more for rising health insurance costs also failed.
Markell, in remarks following the signing, focused on funding aimed at improving the competitiveness of the state workforce.
In the end, legislators on both ends of the political spectrum may have come away disappointed. A few members of Markell’s party wanted to impose higher taxes on the wealthiest Delawareans.
GOP legislators fell somewhat short on plans to cut the budget, but did see minor changes in the prevailing wage formula.
Republicans held up the budget for a time over the prevailing wage issue, claiming Democrats reneged on a previous deal.
“Our responsibility is to ensure Delawareans have a fair chance to succeed in our dramatically changing economy,” said Markell. “We have made great progress toward providing more people with opportunities reach their potential.
“Initiatives established this year will help train a talented workforce, strengthen public schools, support small businesses, and provide opportunity to Delawareans most in need. In addition, we have made vital investments in areas most critical to a strong economy and high quality of life, including our transportation infrastructure and our cities.”
Republicans earned a largely symbolic victory with $5 million in funds for transportation costs moving over to the general fund. GOP legislators have proposed moving transportation salaries away from the trust fund in coming years.
Some motor vehicle fees will go up as a way to increase transportation funding. Those fees are among the lowest in the nation. Despite, nearly a dollar a gallon lower gas price from a year ago, legislators failed to consider a gas tax increase. In he last session, Markell received little support from his own party in attempting to a dime increase to the tax.
Markell noted that the budget, despite weak revenue projections, will help the state keep an AAA bond rating that results in lower borrowing costs.
The fiscal 2016 Operating Budget includes a $4.5 million base reduction in the Medicaid budget and, as of June 1, there were 635 fewer state employees working in the Governor’s executive branch agencies compared to March 2009.
From fiscal 2009 to fiscal 2015, more than 1,000 state employee positions have been eliminated through attrition. Additionally, more than 100 positions were eliminated in the fiscal 2016 Budget.
The budget contains 2.6 percent growth over Fiscal Year 2015 despite increases in health care costs and the number of students attending Delaware public schools, the governor’s office noted.
Average annual budget growth during the Markell administration (2009-2016) has been negative when adjusting for inflation and population growth.
Republicans have called for further cuts, citing what they see as a weak economy..
“By making targeted investments, supporting our infrastructure, and ensuring Delaware businesses have the best opportunity to innovate and expand, we will continue to build on job growth that has far outpaced our neighbors and helped our unemployment drop significantly,” said Markell. “I am especially pleased that we have taken a major step toward properly funding our infrastructure and addressing our Transportation Trust Fund shortfall so DelDOT can effectively improve the safety of our roads and bridges, reduce congestion, support economic development, and create quality middle-class jobs. Downtown Development Districts will receive $8.5 million in funding in continuing a popular program with legislators and the public.
The Bond Bill also includes $5 million for redevelopment of the NVF factory site in Yorklyn (Hockessin) and the Fort DuPont area near Delaware City. Legislators also agreed to legislation that aims to decrease regulatory burdens on individuals and small businesses, a move that was praised by legislators from both parties.
Legislation also maintained school funding and allowed redrawing of school district boundaries in Wilmington. This followed the recommendations of the Wilmington Education Advisory Committee including an evaluation of the number of charter, district, and vo-tech schools required to best serve student needs across the state. House Bill 56 provides for a moratorium on all new charter schools until this happens.
Funding was also included for addiction treatment and services.
