Delaware governor Jack Markell introduces a budget proposal includes spending cuts and improved government efficiencies that are designed to bridge what is expected to be a $250 million budget gap for Fiscal Year 2011.
Governor Jack Markell’s proposed $3.17 billion spending plan for Delaware in Fiscal Year 2010 doesn’t include any tax increases, but does feature a number of spending cuts that are designed to eliminate the projected deficit for FY 2011 of more than $250 million.
Markell says the state is dealing with several issues that threaten the state’s bottom line, including a continuing drop of revenue estimates mainly due to a decrease in personal income taxes. The drop in personal income tax revenue is directly related to the state’s unemployment rate, which stands at 9% as of December. The drop in revenue comes at the same time as federal stimulus money is drying up. For the current budget year (FY 2010), the state will get $233 million in stimulus money, compared to just $123 million in the coming fiscal year (FY 2011).
To make up for the dwindling revenue while still funding increases in areas like Medicaid and salary step increases for some state employees, Markell’s proposing a series of cuts that are designed to save the state $143.6 million. He’s also counting on a $40 million increase in state revenue thanks to the addition of table games at Delaware’s casinos.
The cuts Markell is proposing include a new pension and health care tier for state employees who are hired after January 1, 2011. He also wants to reduce DelDOT’s funding for property maintenance, and reduce spending on things like mosquito spraying control and grass cutting at the DHSS Holloway campus.
Markell also wants to close a portion of the Sussex Correctional Institute and relocate some inmates to reduce overtime expenses. He also wants to streamline the Department of Natural Resources and Environmental Control by consolidating the department from six divisions to three.
The General Assembly’s Joint Finance Committee will begin hearings on Markell’s proposal starting February 1st.