A budget do-over: the tale of two Delaware budgets

The state of Delaware is looking for ways to spend $367 million in new found money. But the Mayor of Wilmington has the opposite problem.   

Mayor James Baker needs to present an alternative plan to his proposed $140 million FY2012 Operating Budget. The administration says it’s not likely the original version will get the seven votes its needs to pass from Council’s 13 members.

“I am hopeful that Council Members will support a common sense budget alternative that still avoids adding more people to the unemployment rolls and still avoids any additional reductions in city services,” said Mayor Baker.

The original version, proposed in March, included nearly $10 million in cuts to government spending. Mayor Baker also proposed no additional layoffs of city employees and no further cuts in direct services to citizens. Consequently, Baker recommended a 5 percent property tax increase to cover a projected budget gap.

The Mayor’s Chief of Staff William Montgomery will present the new budget to Council’s Finance Committee, which includes: 

$100,000 added to the budget for youth services
Eliminating four vacant positions — one each in the Departments of Public Works, Finance, Human Resources and Licenses and Inspections (saving $330,000)
A reduction of about $79,000 from an expected savings from a recent Memorandum of Agreement with AFSCME Local 1102 that requires union members to contribute more to their city healthcare plan
A reduction of $62,000 through a savings in the city’s telecommunications services
A reduction of $45,000 in the City’s Greenhouse Gas Climate Registry Program

The Mayor says the alternative proposal will still require a tax increase to balance the budget, but gives Council two options. 

Option 1: Reducing the property tax increase to 2.1 percent, which the city says would generate $800-thousand in new revenue, cover the deficit and cost the average homeowner about $1.27 more per month.

Option 2: Transfer $800-thousand from the city’s budget reserve account to cover the shortfall.

“I am asking Council Members to look at this alternative proposal very carefully…” said Mayor Baker. “This budget alternative does not overburden our citizens, and at the same time avoids the necessity of cutting services that would indeed affect our citizens. It is time to reach a compromise on a budget for FY2012 that is good for taxpayers and provides the government with adequate resources to serve the taxpayers properly.”

“[The Mayor] is taking the easy way out by trying to dip into reserves or force a tax increase,” said Council member Steve Martelli. “He is also trying to hold lay-offs over Council’s head as if that is the only way to balance this budget.” 

In both versions of the budget proposal, Martelli accuses Baker’s administration of failing to work with Council members towards a compromise. Martelli warns that lack of cooperation, and refusal to take Council’s suggestions into consideration comes at the expense of city residents.

“Council is not a rubber stamp for the Administration and there needs to be a cooperative effort to work towards a reasonable and fair budget,” said Martelli. “It is time for this Mayor to start making the cuts where they need to be made… to give up the frivolities and “nice to haves” and get back to our core services.”

Wilmington City Council votes on the budget Thursday night.

On the state level the Delaware Economic and Financial Advisory Council (DEFAC) increased its estimate for 2011 by $23.5 million and another $24.1 million for the fiscal year starting July 1.

That marks the third consecutive increase this year and puts the total projected revenue increases since Gov. Jack Markell made his January budget proposal at more than $360 million.