Delaware Gov. Carney introduces $4.25 billion ‘sustainable’ budget

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A pay raise for state employees and a $100 million boost for capital projects show how Delaware Governor John Carney’s spending plan is very different from last year’s bare bones budget.

What a financial difference a year makes. Carney presented his second budget proposal to state lawmakers Thursday. Carney’s plan grows the budget by 3.49 percent. It includes a $1,000 pay raise for state employees, a two percent pay raise for public school teachers, and a big boost for the capital budget.

Carney said it’s the right time to boost pay for state workers. “We’re competing with private industry, we’re having a really difficult time on the correctional officers side, a lot of our employees are really underpaid relative to the private sector.”

Last year, Carney called his budget a series of “really tough decisions.” He proposed spending cuts and an increase in the personal income tax to bridge a $400 million budget deficit. After an overtime session that atypically extended into early July, the General Assembly finally agreed on an increase in the realty transfer tax to make up the deficit.

For the current fiscal year, the state expects to take in more than $100 million in revenue than had been budgeted. Carney’s budget plan would move that surplus money into the FY 2019 budget to fund one-time items like infrastructure and economic development. Convincing lawmakers to sign off on that idea, instead of using that money in the current fiscal year, will be one of the toughest fights ahead, he expects.

“I think the way to do it is to manage your budget in a reasonable, thoughtful, sustainable way,” said Carney, of his budget principles.

Republican state Sen. Ernie Lopez, R-Lewes, applauded Carney’s approach. “I think this is the year that all 62 members of the General Assembly need to be fiscal conservatives,” Lopez said. “We need to focus on the dollars and cents and make sure that we’re finding value for taxpayer dollars.”

Carney wants to put $100 million in one-time money into what his administration is calling “Delaware Reinvest.” That includes $12.5 million for the strategic fund and nearly $10 million to fund research collaborations at Delaware State University, the University of Delaware, and Delaware Tech. Carney also wants the money to fund $20 million for open space and farmland preservation. That funding was suspended as part of the cuts last year.

In addition to a pay increase for teachers, the budget’s education line calls for an extra $3.8 million dollars to fund the early childhood education program called STARS. Carney also wants $6 million to fund “Opportunity grants,” a fund for high poverty schools and schools with large populations of students whose first language is not English.

“This is a budget that makes Delaware stronger, focuses on making our state more competitive, addresses some of our critical needs in supporting our schools in our state, and does it in a sustainable way,” Carney said.

In order to help schools in Wilmington, Carney is targeting $1.5 million for school-based wellness centers and professional development for teachers in five Christina District schools. He’s also earmarked $15 million to help modernize two Wilmington schools in the district, pending an agreement to consolidate some Christina schools. Carney said he’s confident Christina leaders will sign a Memorandum of Understanding to consolidate schools.

“I think the hard part is after the MOU is signed quite frankly … how are you going to change school configurations, what are you going to do differently,” Carney said.

Funding for the Department of Correction has been a priority since last February’s riot at Vaughn Correctional Center that left one officer dead. As part of an agreement reached with the officer’s union last summer, Carney’s budget includes money to fund an increase in starting salaries for correction officers to $43,000.

“We believe that we need to pay correctional officers more to attract more. When the economy and the labor market is tight, it makes it harder,” Carney said.

Currently only one out of every 10 DOC job applicants gets through the hiring process. An improving economy, with better job prospects outside of the prison system, makes hiring even tougher.

“It’s going to continue to be difficult, but we’ve stayed at it,” Carney said.

Now that Carney’s presented his budget plan, the bulk of the budget work shifts to the General Assembly’s Joint Finance Committee. The JFC will hold hearings with agencies and advocates through February and March.

The General Assembly must pass the budget by June 30, as the new fiscal year starts July 1.

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