Governor signs $4.1 billion budget

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Photo courtesy of House Democrats.

Gov.John Carney signed a $4.1 billion state budget bill early Monday morning, with Republicans declaring a victory over a deal that does not include an increase in the income tax.

Thebudget passed the House late Sunday night by a lopsided 38 to 3 vote. The Senate followed shortly after midnight with a 16-4 vote.

Hgher taxes on alcohol,tobacco and home sales were part of the agreement. State Sen. Bob Marshall, D-Wilmington, proposed exempting first-time homebuyers from the higher transfer tax. The proposal was tabled for further study.

“Since January, I have talked to thousands of Delawareans who understand the need for a balanced, long-term budget plan for our state,” stated Carney. “The budget I signed tonight makes critical investments in education, healthcare, our environment, and in our correctional system. But going forward, we cannot be complacent. We must do more to put Delaware on a sustainable path forward. With this budget, we are committing to studying real spending reforms, and to improving the way we deliver state services. We also should continue discussing new, creative ways to fund those services through a long-term revenue plan. Thank you to the General Assembly for their work on this budget, and I look forward to continuing our work together.”

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Republicans offered the following statement: Throughout this legislative session, we held the line on one thing: no increases to the income tax without permanent, structural changes to our way of doing business as a government. As a result of this budget compromise, we believe we are that much closer to the reform Delawareans deserve.

“Throughout this legislative session, we held the line on one thing: no increases to the income tax without permanent, structural changes to our way of doing business as a government. As a result of this budget compromise, we believe we are that much closer to the reform Delawareans deserve. While we certainly do not support everything that is in this agreement, we want to thank those who made it possible, especially our colleagues from both parties here in the Legislature. We have a long history of working across the aisle for the betterment of all Delawareans, and we believe that we continued that tradition today.”

It was not immediately clear, whether the budget plan provided any progress in dealing with a structural budget deficit that could return next year.

As part of the deal, 80 percent of grant-in-aid funding was restored. The Joint Finance Committee had previously slashed the funding which goes to fire companies and other nonprofits.

Funding for the State Department of Education and local convention and visitors bureau were also eliminated, but later restored by Joint Finance.

Nonprofits had turned out in force on Friday to press for restoration of funding.

HB 275

For the first time in nearly four decades, the General Assembly adjourned Saturday morning without reaching a budget deal.

Republicans have been insisting on changes in the state’s prevailing wage law which setshigher-than-market pay for state construction projects. GOP legislators also claim that room for further cuts exists.

Democrats said the change would not affect the bottom line for the fiscal 2018 budget.

State budgets require a three-fifths vote for approval. Democrats have only a one-vote margin in the State Senate.

Republicans had taken a more conciliatorytone in social media posts on Saturday and Sunday, after walking out on Friday.

Democrats have continued to emphasize tax increases for a “sustainable” budget that would not leave the state in the same situation a year from now.

Legislators and Gov. John Carney have been struggling with a budget gap of upwards of $400 million.

Delaware wasn’t alone in dealing with a budget impasse. The governors of New Jersey and Maine shut down state parks and other non-emergency services.

The governors of New Jersey and Maine shut down state parks and other non-emergency services when a deal wasn’t reached.

New Jersey Gov. and University of Delaware graduate Chris Christie and his family were spotted lounging on a beach at a state park that was closed to the public.

Delaware legislators avoided a shutdown by voting for a 72-hour window to avoid a shutdown.

The Carney Administration cited the following features in the budget:

  • $24.2 million to fully fund new teachers in Delaware’s classrooms to match enrollment growth.
  • $16 million to fund pay increases for Correctional Officers.
  • $7.8 million to fully fund growth in the Medicaid program for low-income Delawareans, Delawareans with disabilities, and seniors in long-term care.
  • $4.7 million to maintain funding for early childhood education.
  • $2.3 million to authorize new Correctional Officer positions.
  • $1 million to add funding for substance abuse treatment programs.

Savings and other reductions include:

  • $11 million reduction to the Educational Sustainment Fund.
  • $5 million savings by eliminating 200 vacant positions across state agencies.
  • $2 million target savings in employee health costs.
  • $1.6 million reduction by modifying double state share for employee health insurance rates.

Revenue increases include:

  • $116 million: Corporate franchise tax increases.
  • $11.6 million: Raise taxes on cigarettes 50 cents per pack, and increase taxes on other tobacco-related products.
  • $5.2 million: Raise taxes on beer, wine and spirits, including by one penny per beer.
  • $44.7 million: 1% increase in the realty transfer tax.
  • $4.5 million: Across-the-board increases to the filing fees associated with Department of Insurance filings.
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