Drawn to the brink, Delaware passes state budgets [VIDEO]

     Governor Jack Markell signs the state budget in the early hours of Wednesday morning. (Avi Wolfman-Arent, NewsWorks)

    Governor Jack Markell signs the state budget in the early hours of Wednesday morning. (Avi Wolfman-Arent, NewsWorks)

    Delaware leaders passed a much-debated capital budget and reached crucial compromises on transportation funding.

    It wasn’t easy. It wasn’t pretty. It definitely wasn’t quick.


    But when the sun rose Wednesday over Legislative Hall, Delaware leaders had passed a much-debated capital budget and reached crucial compromises on transportation funding.

    • WHYY thanks our sponsors — become a WHYY sponsor


    The frenetic final session of the legislative season was one of the longest and most contentious in recent memory.


    By the time lawmakers broke for the summer, they’d managed to avoid any major budgetary stalemates. They’d also done little to seriously limit spending despite the prospect of an even tighter budget next year.


    The lead up featured tough talk from both sides of the aisle, with Republicans threatening to sink the capital budget bill due to dissatisfaction with how the money was to be allocated.


    Ultimately, though, leaders from both parties were able to hammer out deals that kept the budget largely in tact.


    Lawmakers also OK’ed a $3.9 billion operating budget.


    “This has gone about as well as we could have hoped for,” said Governor Jack Markell, who called the 2015 legislative season the “craziest” of his gubernatorial tenure.


    Capital bill squeaks through


    The day began with nervous speculation over whether enough Republicans would back the state’s $456- million capital bond bill. Angry that the bill funneled money away from agricultural interests, various GOP lawmakers threatened to block the capital budget.


    Unlike typical bills, the Delaware’s capital budget bill requires a three-fourths majority to pass. The bond budget pays for all of the state’s building projects. Though the state constitution does not require the General Assembly to pass a capital bond bill, inability to do so would have squashed or frozen hundreds of projects. Union workers flooded the lobby of legislative hall to urge GOP support for the measure.


    Republicans ultimately backed the bill, but only after Democrats restored $3 million for agricultural land preservation and added money to a fund for small-scale road maintenance. A late night reconvening of the Bond Bill committee ended at 2:22 AM Wednesday morning.


    “Ladies and gentleman, you have a bond bill. It’s a bond bill you can be proud of,” said committee co-chair Quinn Johnson, D-Middletown. “You’re putting people to work.”


    The bill passed the Senate unanimously at 3:27 AM.


    Compromise struck on transportation funds


    After initially rejecting the bill, Senate lawmakers approved a measure that is expected to pump nearly $24 million annually into the state’s Transportation Trust Fund by raising DMV fees. The bill required a three-fifths majority to pass and faced stiff Republican resistance.


    The bill passed moments before midnight, following hours of closed-door negotiations. The measure earned key Republican votes only after Democrats agreed to crucial concessions. The majority party agreed, for example, to reform the state’s prevailing wage program, which determines how much the state pays laborers who work on state projects. Republicans also insisted on new controls that will limit the extent to which capital project funds can be used to cover administrative costs.


    “This was an important piece of legislation to get done this year and I’m pleased it received bi-partisan support,” said Senate President Pro Tempore Patricia Blevins, D-Stanton, in a statement. “First and foremost, tackling much-needed infrastructure projects will keep Delawarean safe and improve their quality of life.”


    Blevins and all eleven of her Democratic colleagues backed the bill. Four republicans joined the majority, including Senate Minority Leader Gary Simpson, R-Milford, and Senate Minority Whip Gregory Lavelle, R-Sharpley.


    “We appreciate the opportunity to reasonably fund transportation and get on with reforms,” Lavelle said.


    The Delaware Department of Transportation has said previously that the Transportation Trust Fund faces a $780 million deficit over the next six years. The fund helps pay for infrastructure improvements and maintenance.


    Markell has long called for new investment in infrastructure and lobbied hard to get a deal done last year. The Governor savored the win, admitting it felt like a long shot even in the waning hours of the legislative session.


    “I’m really happy sitting here after getting this transportation piece done,” Markell said.


    Non-profit funding restored


    The final budget also included a major win for non-profit organizations.


    Lawmakers had earlier indicated that Delaware would slash its grant-in-aid budget by a little over $2 million. As a result, non-profits that receive money from the state would have seen a five percent reduction in government funding. Those organizations include volunteer fire companies, community centers, and arts organizations—among others.


    [Editor’s note: WHYY received $175,000 in FY 2015 through Delaware’s grant-in-aid program.]


    In a late-Tuesday meeting, members of the Joint Finance Committee rescinded the cut, meaning the grant-in-aid budget will remain unchanged from the previous fiscal year. To muster the additional $2.3 million, the state dipped into a $61 million pool of money won through settlements related to the housing crisis.


    “It will help an awful lot of people this year in Delaware,” said Rep. Melanie George-Smith, D-Bear, head of the Joint Finance Committee.


    George-Smith noted that the Joint Finance Committee only approved a one-time use of the settlement money, indicating the state would not seek a similar remedy next year.


    When the grant-in-aid bill finally came before the Senate at 4:40 AM, there was little patience left for conversation.


    “The hour is late, let’s not debate,” said Senator Harris McDowell, D-Wilmington.


    Settlement money crucial


    Politicians leaned heavily on the settlement money to close budget gaps and broker compromises. In all, the state used a little over half of the $61 million won through two settlements—one with the rating agency Standard and Poor’s and one with Bank of America and Citigroup.


    That leaves little left over for the future, which worries some state politicians given the grim financial forecast that awaits Delaware next year.


    “Delaware’s finances are rapidly heading for a cliff,” said Senator Colin Bonini, R-Dover. He added that his colleagues did well to maintain crucial government programs, but failed to confront structural overspending.


    “At 4 o’clock in the morning you feel good just to get out of here,” Bonini said with a chuckle. “But we kicked the can down the road.”


    He hopes, however, that the hard bargaining that kept lawmakers late signifies a greater willingness to tackle big-picture budgetary issues.


    “The little fighting we did this week, I actually think that was healthy,” Bonini said.


    Senator Dave Sokola, D-Newark, also worried about the use of settlement money, but felt the General Assembly showed some restraint. Sokola co-chairs the bond bill committee, which used a chunk of the bonus cash to restore cuts that had alienated Republican lawmakers.


    “There were people that wanted to spend it all,” Sokola said of the settlement cash. “I think we can be reasonably pleased.”


    Markell sounded a similar note.


    “It’s certainly not a long-term answer,” said the Governor. “I’m certainly pleased they didn’t spend more of it than they did.”


    Other notable legislation


    The frenzied final night of lawmaking also saw Delaware pass a number of notable, non-budgetary bills.


    Governor Jack Markell signed a measure allowing undocumented immigrants to receive modified driver’s licenses. The new licenses will not double as official identification cards. They will, however, grant driving privileges to undocumented immigrants.


    The Governor also signed a suite of bills meant to improve gender equality. The six-bill package addressed a range of issues, including equal pay for women, sexual assault, and domestic violence.


    Tax split revisited


    Earlier in the day, state politicians reworked a tax provision that had rankled county-level officials.


    Proceeds raised by the Realty Transfer Tax are split evenly between the state and its three counties. The General Assembly’s Joint Finance Committee passed a proposal that would have given the state two-thirds of that same pie and helped Dover politicians balance the budget. Local leaders protested the change, and state lawmakers eventually abandoned it.


    The reversal turned out to be just one of many twists during a see-saw day in Dover. As the sun began to rise on July 1, Delaware’s lawmakers seemed both relieved and exasperated.


    “We’ve come to the end,” said Senate Majority Leader David McBride, D-Wilmington Manor, at 4:42 AM.


    His colleagues responded with yelps of joy.

    Want a digest of WHYY’s programs, events & stories? Sign up for our weekly newsletter.

    Together we can reach 100% of WHYY’s fiscal year goal