After two weeks of meetings, the Delaware Joint Finance Committee finished marking up Governor Jack Markell’s recommended Fiscal Year 2014 budget.
The balanced $3.7 billion general operating budget is 3.6 percent higher than the FY2013 budget.
Earlier this month the Delaware Economic and Financial Advisory Council (DEFAC) estimated the state had around $3.8 billion in revenue to work with. That included a projected surplus of $21.7 million from a slight spike in corporation tax revenue and debt collection.
One of JFC’s final additions is $1.2 million to the Delaware State Police Department for the one time purchase 30 new patrol vehicles.
Other additions include $5 million to the Department of Education for technology upgrades and $1.5 million to increase security at state courthouses following the deadly New Castle County Courthouse shooting in February.
“I think overall the process worked very well and I think we have a good budget,” said Ann Visalli, director of the Office of Management and Budget. “I think we’re addressing a lot of the very critical needs in state government. We weren’t able to do everything that everybody wanted but I think overall we were able to take care of Delaware’s most critical populations and address increasing costs in a balanced way.”
Visalli and OBM received funding requests for new programs and expansions of current programs from a variety of state agencies during hearings held at the end of 2012.
While the state projects a surplus, Visalli said they were still unable to fill the request of pay raises for state employees.
“There are obviously some programs that are still struggling and so they have to look for cuts and efficiencies and weren’t able to see increases that they requested,” explained Visalli.
Salaries have remained flat since 2009 when state employees took a two percent pay cut to help the states embattled budget during the economic recession. That money has been put back into paychecks over the years.
While FY2014 looks strong, OBM presented the JFC with bleak early projections for FY 2015.
According to Brian Maxwell, deputy director for OMB, the state could be looking at more than a $100 million hole if the base budget continues to grow at a three percent increase.
“Before we started the markup process, based on what the appropriations in the governor’s recommended budget compared to what the available resources were at the May DEFAC for fiscal year 14, the comparison left a gap if there was a three percent budget growth in just the budget appropriations, of approximately $102 million,” explained Maxwell.
With the JFC’s additions, Maxwell said that gap has widened to approximately $139 million.
In addition to that, there’s an outstanding $63 million tax refund claim from an unidentified company for work the business allegedly conducted out of state.
“I know there are discussions going on,” said Visalli. “It may or may not be that amount. The timing is outstanding so if there is some resolution to that prior to the end of the fiscal year, I think that they could recognize it.”
Both chambers will vote on the budget which much be approved by June 30. FY 2014 goes into effect July 1.