Delaware Governor Jack Markell presented a balanced budget proposal on Thursday and his colleagues among the state are calling the FY2015 spending plan a “good start.”
“We will take it and hopefully massage it and improve it a little bit and make it a little bit more friendly to the legislature, but it’s a good start,” said Sen. Harris McDowell (D-Wilmington North), co-chair of the Joint Finance Committee.
The $3.8 billion budget is a three percent increase over the current year’s budget. The spending plan includes a one percent pay raise for state employees and $19 million in additional funding to add more teachers to public schools. State Rep. Paul Baumbach (D-Newark) said the state faces challenges to keep up with rising costs as state revenues remain stagnant.
“We’ve got a big task ahead of us, with the revenues for the state not growing all that strongly and with the growth of expenses, more students, more Medicaid costs, we’ve got a lot of challenges,” said Baumbach. “The governor is responsible for giving us a starting point, the proposed budget came out with a full system, full answers, consistent budget, today. It’s a starting point.”
In an effort to fill a $139 million deficit, the governor proposed cutting $39 million slated for the Transportation Trust Fund and keeping that money in the General Fund. Cuts to the Open Space and Farmland Preservation and the Energy Efficiency Fund we’re also suggested along with an increase in some corporate taxes to help close the gap.
“I think what this budget presentation demonstrates is that we have a very weak economy in Delaware and that’s evidence by some of the left-hand right-hand funding techniques, taking money from one pot and putting it in another pot and therefore creating a crisis for the first pot,” said Sen. Greg Lavelle (R- Sharpley)
Lavelle said he’d like to focus more on how to increase the state’s growth domestic product (GDP) percentage.
“The fourth quarter GDP was about 3.1 percent nationally. I believe the 2013 growth was around 3 percent. And in Delaware, I just don’t believe we are there. If we are three percent growth, we wouldn’t be doing this to fund our budget,” explained Lavelle.
Earlier this week, the governor proposed a 10-cent gas hike to help increase revenue for the Transportation Trust Fund. The increase will cost the average Delaware driver about $56 a year according to state projections. While, Lavelle said he supports the increase, he knows it’s not going to be welcomed by everyone.
“As I was driving down here this morning I saw some people, small businesses that drive trucks, not cars, that have a fleet of 10, 20 or more trucks, said Lavelle. “That’s not $56 a year for those folks.”
Rep. Baumbach echoed a similar view.
“Anytime you talk about taxes, especially an increase like the gas tax, that’s a headline,” said Baumbach. “It’s five dollars per driver per month so it’s not the end of the world but it’s but is unfortunate in that it even across all income levels and that’s tough for especially our lower income families.”
The Joint Finance Committee will begin meeting next week to continue to craft the state’s budget. The General Assembly must pass the budget by June 30.