House lawmakers in Delaware approve $5.6 billion budget for fiscal year starting July 1

House lawmakers in Delaware voted Thursday to approve an operating budget of more than $5.6 billion for the fiscal year starting July 1, an increase of roughly 10% over this year’s operating budget.

Lawmakers also approved a separate budget supplement totaling $194.5 million in one-time funds for next year.

House members voted 32-8 for the operating budget and 33-7 for the supplemental bill. All dissenting votes were cast by Republicans, some of whom expressed concern about the increase in spending.

“That 10 percent is now baked in,” said Republican Rep. Lyndon Yearick, referring to the Legislature’s practice of using one year’s budget as the starting point for the next year’s spending.

“That level of an increase is not only going to make the next-year budget harder, but the following year and the following year,” Yearick warned.

Republican Rep. Ruth Briggs King of Georgetown, a member of the budget-writing Joint Finance Committee, acknowledged that the spending plan represents “one of the largest increases we’ve ever had.” She asserted, however, that the government must keep pace with “unprecedented inflation” and compete for workers.

Both spending bills now go to the Senate.

The budget bill includes pay raises ranging from 3% to 9% for state employees, depending on their pay grades. Employees making less than $50,000 a year will see pay increases between 7% and 9%, while those making roughly $100,000 or more annually will get a 3% pay raise. Teachers, school counselors and school librarians will get salary increases of 9%.

Those pay increases follow pay hikes ranging from 2% to 9% that government workers received this year.

The fiscal 2024 budget also includes more than $100 million in additional funding for Medicaid, $29 million to meet projected school enrollment growth, and $10 million to increase subsidies for child care providers. Lawmakers also approved more than $4 million in initial funding to reflect passage of bills legalizing recreational marijuana use, and authorizing a state-licensed and regulated marijuana industry. Democratic Gov. John Carney allowed the legislation to become law without his signature, having vetoed a legalization bill last year.

“By passing a budget, it enables us to do so many good things for so many people,” said House Speaker Pete Schwartzkopf, a Rehoboth Democrat.

The operating budget is $124.5 million higher than what Carney proposed in January, while the one-time supplement is $130 million less than what he recommended. The change in the supplemental bill represents a decision to address a deficit in the state’s group health insurance plan with recurring operating funds over several years, rather than a one-time lump sum. As a result, lawmakers added $48.6 million to the operating budget for group health insurance premiums.

The second major change to Carney’s recommended operating budget is an increase of $48.7 million to address expected growth in Medicaid expenditures. That’s in addition to $69.1 million in one-time funds for Medicaid in the supplemental bill, which also includes $51 million for state retiree health benefits.

“These areas are increasing exponentially each year,” Briggs King warned.

“Some of this is not sustainable … I just see it very difficult in the future doing this,” she added.

Meanwhile Thursday, the Legislature’s capital budget committee finished drafting a $1.4 billion spending plan for construction, maintenance, and transportation projects. The committee added $120 million to the capital budget Carney recommended.

The revised capital budget includes $354 million for transportation projects, which is $32 million more than Carney recommended. The committee also added $45 million for the state’s “community reinvestment fund,” half of the $90 million that was allocated for this year. Carney’s proposal included no money for the fund, which provides grants to county and local governments, and nonprofit organizations for capital projects.

The committee also added more than $15 million for community initiatives in Wilmington, Dover, and Newark, and $12 million for a sports tourism capital investment fund. Panel members also approved $15 million for a biomanufacturing research and education center at the University of Delaware, and directed that the university spend $6 million of its total capital funding on upgrading its softball field.

Members of the Joint Finance Committee will reconvene next week to consider a bill providing grants of taxpayer money to community organizations, nonprofit groups and volunteer fire companies. Carney has proposed a grants package of $59.8 million, down from this year’s record $69.4 million.