At nearly $4.2 billion dollars, Markell’s final spending plan is the first in state history to top four billion dollars.
Delaware Governor Jack Markell delivered his eighth and final budget to state lawmakers Thursday afternoon. His $4.17 billion spending plan is an increase of 5.24 percent over the current budget.
Despite that increase, Markell says his administration has held growth in check over the past eight years. When adjusted for inflation and population growth, Markell’s budgets shrunk by .37 percent on average. Unadjusted, Markell’s budgets have grown by an average of 2.79 percent.
Last year, Markell lamented that he was presenting a “very difficult budget.” This year, however, thanks to a more robust revenue report from the most recent Delaware Economic and Financial Advisory Council, Markell gave no such caveat.
Skyrocketing health care costs
The main source of spending in Markell’s FY 2017 budget is on health care costs for state workers.
Since just last year, health care expenses are up $47 million – and that number will continue to rise. Markell’s proposal showed that state workers’ health care costs are projected to surpass a billion dollars by 2020.
To curb those skyrocketing health costs, Markell’s budget calls for an increase in state workers’ contributions to monthly premiums. Depending on the health care plan, state workers will see monthly premiums increase anywhere from $1.98 to $19.48 per month. Additionally, the state will increase its contribution to monthly premiums. The monthly cost to the state will go up anywhere from $47.65 to $127.48 per worker.
But even that is not enough to curb costs. Under Markell’s plan, starting in 2017 new employees would no longer be able to enroll in the state’s HMO or PPO health plans. Instead, the new workers would be forced into a Health Savings Account. “If we don’t make these kinds of changes, we are going to have significant challenges going forward,” Markell said.
Delaware State Budge Director Ann Visalli said moving new hires to the HSA will help make them better consumers of the least expensive and most effective health care options. “Making employees better consumers is not just about how much health care they consume, but also the type of health care they consume,” Visalli said.
The state would provide single workers with $1,000 in the HSA, while workers with family plans would get $2,000. Single workers would have a $2,000 deductible, while those with family plans would have a $4,000 deductible.
While state workers are being asked to pay more for health care, Markell’s budget also sets aside $18 million for a general salary increase for all workers. Employees would get a raise of $500 or 1 percent of their salary, whichever is greater.
In an effort to make Delaware more competitive, the proposed budget also calls for spending $3 million to increase pay for starting teacher salaries.
Markell said neighboring states all pay first-year teachers better than Delaware, and that makes it more difficult to recruit top teaching talent. Another $1 million would provide additional pay for a pilot teacher-leader program to allow teachers to earn more and still stay in the classroom.
The budget also sets aside $6 million to implement recommendations from the Wilmington Education Improvement Commission. $4 million of which would help low income students in the Red Clay School District, the other $2 million would establish the Wilmington Redistricting Fund to support continued transition.
“One of the areas I believe we can make more progress is for the underserved children in Wilmington,” Markell said. “I agree with the conclussion reached by the Wilmington Education Improvement Commission and others that we really do need to redraw district lines…Those changes have to paired with additional resources for our low income students.”
Some lawmakers have been skittish about supporting the WEIC recommendations because of the costs, and Markell is hopeful that including this item in the budget will alleviate those fears.
Other budget allocations
Body cameras have been a hot topic in the past year, Markell said, that’s why he’s calling for $500,000 to purchase body cameras for the Delaware State Police. Some of that money will also be set aside to help the attorney general’s office review the camera recordings.
To make room for some of the new expenses, Markell is proposing to cut funding for both Open Space and Farmland Preservation by $7 million. The state’s Energy Efficiency Fund would also be cut by $5 million.
In addition to proposals for the operating budget, Markell detailed plans for the capital budget to fund construction projects and other improvements throughout the state.
Some of the highlights include the following:
$8.5 million to promote construction in Downtown Development Districts
$15.8 million for infrastructure improvements at the Diamond State Port Corp.
$3.1 million for the Wilmington Riverfront Development Corporation
$75.7 million for school construction costs
$18 million for projects at Delaware State, University of Delaware, and Delaware Tech
$10.7 million for libraries including Duck Creek, Selbyville, Route 9/13 and Harrington
$6 million for Delaware State Housing Authority’s Housing Development Fund
$3 million for trails and pathways statewide
$6.3 million to upgrade the state’s emergency 800 MHz radio system
$1.3 million for renovations at the Delaware Nat. Guard’s Bethany Beach site.
State lawmakers have until the end of June to approve a spending plan for Fiscal Year 2017 which starts on July 1, 2016.