The Delaware Joint Finance Committee has hit the halfway point in the budget markup process.
The latest revenue projection released earlier this week added more pressure on lawmakers to tighten spending.
The Delaware Economic and Financial Advisory panel reported a $19 million drop from April to May estimates, leaving a gap of about $41 million between projected revenue and Gov. Jack Markell’s $3.8 billion budget proposal. The state is also facing a $14 million budget deficit for the current fiscal year.
Ann Visalli, director of the Office of Management and Budget said they’re wasting no time trimming down the spending plan. “The Office of Management and Budget in conjunction with the Controller General’s Office and Joint Finance Committee, has proposed approximately $37 million in reductions for fiscal year 2015 and included in those are a number of different programs, really all across the board, there wasn’t one particular agency that was spared. In addition, some of the governor’s new initiatives were scaled back or are being delayed,” she said.
The cuts include reducing the governor’s proposed pay raise for state employees from 1 percent to $500 for most employees and cutting spending on programs to help Delawarean’s fighting drug addiction and for workforce development.
“The whole time I’ve been in the Senate, six years, the employees have had a total of three percent in pay increases and that’s just not much,” said Sen. Brian Bushweller, D-Central Kent. Employees took a pay cut in 2009 during the economic downturn but salaries were restored the following year.
The JFC still has half of the state departments to review when they resume budget markups next week and Visalli said she’s confident in the progress they’ve made so far.
“We’re working very efficiently,” Visalli said. “They [the JFC] know how challenging the financial situation is so they’ve really shown a lot of cooperation and responsibility. We voted in a significant number of reductions to help us get to a balancing budget and I’m confident that we’ll get there.”
Lawmakers still have to decide on what to do with the state’s three ailing casinos. A bill was introduced earlier this month that would save the casinos about $20 million a year by reducing the state’s cut of gross table game revenue from 29.4 percent to 15 percent. The state would also eliminate its table game licensing fee and would share the cost of vendor fees.
The three casinos, which contribute more than $200 million to the state budget annually, have reported low revenues due to the recession and increased competition from neighboring states.
Sen. Bushweller, the sponsor of the bill, said the state can’t afford not to help the casinos. “I believe very strongly that it’s in the best interest of state tax payers that we restructure the relationship we have with the casinos so that the state can actually assist the casinos in dealing with the competition they’re dealing with out of state,” he explained. “If we do that, I think we can stem some of the decline in casino revenue that we’re facing during these two weeks of markup.”
Lawmakers have yet to tackle the governor’s proposed 10 cent gas tax increase or the Clean Water for Delaware’s Future initiative.
A balanced budget is due by June 30.