New Castle County Executive Matthew Meyer announced spending cuts in response to a more than $5 million shortfall and projected budget deficits in coming years.
A release announced that Meyer and his leadership team is reviewing financial data, cost drivers,
and other expenses.While that review is ongoing, it has already identified a structural deficit of more than $5 million in the current year’s operating budget, as well as a trend of projected budget deficits that will grow to more than $25 million by 2020.
“When I ran for office I promised a county government that is more transparent and responsive and that we could do more with less,” Meyer said. “That’s why I’m communicating early to our residents, county employees and other stakeholders about the fiscal challenges we face this year and beyond. New Castle County families cannot spend more than they bring in, and neither can our government. County expenses are exceeding revenues so we are acting responsibly by immediately taking several preliminary steps to reduce spending.”
The five cost containment strategies Meyer announced include:
- An intensive hiring review of all vacant positions, including all recruiting and interviewing currently underway;
- Suspension of the policy allowing active employees to cash out unused vacation time;
- Suspension of overtime, except for Public Safety and other critical needs;
- Suspension of all out-of-state travel;
- Reduction in executive office spending, including outside contracts
County government expenses have exceeded revenues for the past four fiscal years, and in the current fiscal year, Meyer stated.
That structural imbalance is expected to increase over the next three fiscal years with expenses growing by $29 million or 4.8 percent annually, more than three times the rate of revenue growth that is projected to increase by $8 million or 1.5 percent annually.
The cost containment strategies are expected to reduce, but not eliminate the current-year budget deficit and will not on their own balance future projected budget deficits, the release stated.
“My team and I will continue to work diligently to identify efficiencies and other cost reductions to restore fiscal discipline and will consult closely with County Council and others to consider the difficult choices we face to align expenditures with revenues in the years ahead,” Meyer said.
Meyer had warned about budget deficits in his campaign against incumbent Tom Gordon. Gordon had never raised property taxes during three terms as county executive, although critics said he dipped into reserves and made other moves to paper over deficits.
Property taxes were raised following Gordon’s first two terms as county executive.
In addition, counties and municipalities in Delaware could receive less money from the state, which has its own $350 million budget shortfall.
Sussex County, the site of much of the population growth in the state, has seen a string of budget surpluses, even though its property taxes are lower than the levies in New Castle County.
Counties in Delaware rely on fees, property taxes and transfer taxes on real estate transactions for most of their revenue.
At the same time, the state picks up costs in public health, courts and other areas that in many jurisdictions are handled by counties and cities.
New Castle County is also affected by “baked in” step pay increases for new employees that go on for a decade.
