Early Friday morning, Gov. Jack Markell signed a $4.1 billion fiscal 2017 budget. It will be the last budget for Markell, whose term ends in January.
“By continuing our focus on the areas that have the greatest impact on our future prosperity, like education and job training, research and innovation, we’ll make sure our state continues to become a prosperous place to live, work, and raise a family,” Markell said.
Legislators pushed back redistricting efforts for schools in the City of Wilmington but passed a resolution vowing to resolve the contentious issue.
The Fiscal Year 2017 Operating Budget showed 4.49 percent growth over Fiscal Year 2016, with Medicaid ($63.1 million), state employee and retiree healthcare ($33.3 million), state employee salaries ($20.3 million), and school employee step and pay plan increases and unit count obligations ($26.0 million).
The budget came with no help for the state’s struggling casino industry, which is seeing growing competition and declining revenues. Downstate legislators had pushed for changes, but their counterparts in northern Delaware did not share that enthusiasm.
Dover Downs and Harrington Raceway are major employers in Kent County.
Markell had attempted to rein in growth in state employee health care, but legislators did not go along with the plans.
State employees remain a powerful lobbying force in a state where some large private employers have downsized or closed.
The administration said that the annual budget growth during the Markell administration (2009-2016) was negative, and was the lowest in the last 40 years, when adjusting for inflation and population growth.
That has not stopped Republican critics from claiming that there is too much fat in the budget. A few Democrats have also complained that budget writers have stricken help for the most vulnerable while keeping “corporate welfare” measures.
The administration noted that as of June 1, there are 733 fewer state employees working in executive branch agencies compared to March 2009. More than 1,100 positions have been eliminated, and another 35 were eliminated in the Fiscal Year 2017 Operating Budget.
A recent report took note of structural problems in state finances that could worsen in coming years.
The state budget also relies heavily on unclaimed property revenues and states are suing to stop Delaware’s practice.
Delaware’s revenue picture remains sluggish despite the strongest job growth in the region and a jobless rate that is nearing 4 percent.
Personal income tax revenues have seen slow growth, a contrast from previous recoveries.
“While our collective efforts to develop a responsible and balanced spending plan for Fiscal Year 2017 should be celebrated, this year’s budget was especially challenging. Growing costs in some areas, particularly in health care, are unsustainable and I’m hopeful that proposals we have made will set the stage for reforms because without change, we cannot afford other key investments,” Markell stated.
“We are well positioned to continue to create jobs and grow Delaware’s economy,” Markell said. “We have built on our progress this year by making our tax code more sensible for businesses large and small, supporting research and innovation, and continued focus on economic development in our downtowns. This will put Delaware in a stronger position to retain jobs and encourage employment growth in the years to come.”
The administration cited the following:
- The Delaware Competes Act (HB 235) changes the way corporate income tax is calculated to ensure companies are incentivized to hire and expand in the state, and to modify filing requirements that were overly burdensome to small businesses.
- The Commitment to Innovation Act (SB 200) includes provisions to expand the state research and development tax credit and incentivize companies to establish headquarters in Delaware.
The fiscal 2017 Bond and Capital Improvements Act includes $8.3 million to support the Downtown Development Districts program.
Since the downtown program went into operation, $14 million in grant funding has been allocated through the program which, in turn, is leveraging more than $290 million of private investment in the current districts. It also includes:
- $4.5 million to support the redevelopment of the former NVF and Ft. DuPont sites
- 10.0 million for the Delaware Strategic Fund
- $15.8 million to support investment and growth at the Port of Wilmington
- House Bill 327, proposed in the Governor’s 2016 State of the State Address, will permit the use of online crowdfunding platforms, allowing Delaware residents to invest in Delaware start-ups and small businesses.
In addition to legislation and budget items, during the last year the Administration’s TechHire initiative expanded through a new coding school at Delaware Tech, the Pathways to Prosperity program experienced continued growth, enrolling 2,500 students this past school year and on track to doubling the size of the program to 5,000 this coming fall, and a partnership with McKinsey Social Initiative’s Generation USA Youth Employment Program was established to provide workforce training to disadvantaged Delawareans in a variety of in-demand fields, the administration noted.
Markell applauded the passage of Senate Joint Resolution 17 and Senate Bill 300, which supports continued efforts by the Wilmington Education Improvement Commission to improve educational opportunities in the city.
Money was also allocated for early childhood education.
The Fiscal Year 2017 Bond and Capital Improvements Act includes $76.4 million to fund public education construction projects throughout the state. The budget also allocates $26 million in new funding for teacher compensation and schools to maintain z commitment to targeted class sizes and quality education.
On the criminal justice side,
Senate Bill 163 eliminates mandatory minimum life sentences, provides additional discretion to judges in imposing sentences for repeat offenders, and provides a mechanism for those convicted under the existing habitual offender law to petition the court for a sentence modification.
House Bill 325 extends from three to 25 days the amount of time for a background check to be completed before a gun buyer may complete his or her purchase. It will not affect the vast majority of purchases since more than 91 percent of background checks are completed within minutes or, at most, hours. The three-day limit has become known as the “Charleston Loophole” after last year’s mass shooting in which nine people were murdered in a Charleston, S.C. church. The suspected gunman purchased the firearm used in the killings through the delayed transaction loophole.
]Senate Bill 242, which ensures that individuals aren’t prevented from exercising their fundamental right to vote by removing the financial bar to restoration of voting rights for people convicted of felonies who have completed their sentence. Delaware had been one of only three states that required payment of financial obligations before restoration of voting rights, and the only state with a statutory bar to restoration of voting rights until full payment was made.
In the quality of life area, the 2017 Bond and Capital Improvements Act includes more than $20 million to invest in a variety of projects that will strengthen neighborhoods and improve the quality of life:
- 0 million to replenish the State Housing Authority’s Housing Development Fund
- 7 million to continue the Markell Administration’s historic support of public library construction in all three counties.
- 5 million to support the rehabilitation of state park facilities
- $2.5 million to build on record construction of new public trails and pathways during this Administration
The operating budget includes new funding $4.8 million for the Division of Developmental Disabilities Services to support 75 additional residential placements and 140 additional special school graduates and $250,000 for community-based services for individuals with serious and persistent mental illness.
