Governor Jack Markell unveiled a fiscal year 2013 budget proposal that features little overall growth in spending but significantly expands spending in certain areas. The governor offered his FY 2013 plan in Dover Thursday.

Gov. Markell’s budget plan is balanced without any increased or additional taxes or fees.

“This budget is very much like what I talked about in the State of the State speech last week,” stated Markell. “It’s about investing in jobs, it’s about investing in schools, and it’s about governing responsibility. Governing responsibly means being a good steward of the taxpayer dollars, and that’s exactly what you’re going to see in this budget.”

The $3.55 billion proposed general operating fund budget is a 1 percent increase over the $3.51 billion FY12 budget.

Additionally, the governor offered a capital budget proposal of $448 million for FY13 and set aside $40.2 million for grant-in-aid.

Senator Harris McDowell (D-Wilmington North), who co-chairs the budget writing Joint Finance Committee, applauded the governor’s focus on jobs, education, social services, and efficient government.

“It represents a really good set of priorities consistent with his entire term in office—to work really hard on things really help us at the core,” said McDowell.

McDowell’s fellow Democrat, Senator David Sokola (D-Newark), added, “I think it’s responsible. I think he hits the areas that are critical needs as well as those areas that have potential to develop opportunities for Delaware in both the near- and the long-term future.”

On the Republican side of the aisle, Representative Ruth Briggs-King (R-Georgetown), who is also on the Joint Finance Committee, said she heard “pretty much the same message we heard last year,” but added that she expects to see “a bigger demand to meet the needs in social services and other services we provide.”

House Minority Leader Greg Lavelle (R-Sharpley) noted that “any budget that only increases 1 percent is not bad from my perspective,” but he remains concerned that the proposal continues the trend of the state spending whatever new revenue it gets.

The largest single spending increase in the operating budget comes in education. The proposal allocates $27.4 million to cover the loss of federal stimulus money provided by Education Jobs Act fund.

“This was funding that was made available by the federal government that is no longer made available,” explained Ann Visalli, director of the Office of Management and Budget. “It targeted teachers in the classrooms, school building employees, and we are pleased to recommend that funding.”

Sen. Sokola, who chairs the Senate Education Committee, says Markell’s budget reflects the effort to strongly but realistically fund education in the state.

“One thing that we’ve worked on for the last three years is a recognition that the federal money was going to go away eventually, just like the Race to the Top money is going to eventually go away,” said Sokola. “So, we’re trying to build the capacity to continue the most essential components.”

Markell suggests $8.7 million to hire 111 teachers, along with additional support staff, to accommodate the growth in the public school student population and $8.8 million to cover salary step increases for employees of public schools and Delaware Technical and Community College (DTCC). The governor’s budget also seeks $750,000 for salary increases to paraprofessionals and $1.5 million to support grants to low-achieving non-Title I schools.

Education also earns a large share of Markell’s capital budget proposal, which sets aside just over $16 million for major and minor capital improvement to schools and another $9 million for higher education in the form of $3 million each to the University of Delaware, Delaware State University, and DTCC.

Governor Jack Markell’s proposed FY 2013 budget

Excerpts from Gov. Markell’s budget presentation

The governor’s budget plan also calls for significant spending on health and social services, specifically Medicaid. Markell repeated the call he made in his State of the State address to allocate an additional $21.7 million to deal with increasing Medicaid costs. The budget also works in about $4 million in cuts to the program. But Markell said he believes, as he outlined in the State of the State, that the state’s priority should be aggressively pursuing savings by finding efficiencies in the system.

“Efficiencies first,” Markell told reporters following his budget presentation.

McDowell says the work to find those efficiencies has begun, with a task force that met last summer. The task force “has presented a number of places we can find efficiencies. What I don’t know is how many of those may already be incorporated in [the governor’s] budget numbers.”

But Rep. Briggs-King believes the final budget may need to go beyond the savings found in efficiencies to address the rising cost of Medicaid.

“We have expanded our Medicaid beyond the federal requirements, and this might be the year that we have to look at bringing it back in line with what we can afford,” Briggs-King said.

The budget allocates additional funds to social services, including an additional $3.5 million commitment to early-childhood education, $1.5 million to the State Rental Assistance program and $6.8 million for additional community placements and special school graduates in the Division of Developmental Disabilities Services.

“This is really about meeting our commitment to Delawareans who, frankly, need our help,” Markell said.

Governor Jack Markell’s proposed FY 2013 budget

Reaction to Gov. Markell’s budget proposal from state legislators

As part of his commitment to job creation, the governor seeks to replenish the state’s Strategic Fund with $30 million from the capital budget. That figure is slightly lower than last year’s $31 million commitment, but Markell said it is enough “to do a lot to put people back to work.”

Other highlights from the operating budget include: nearly $20 million to maintain the pay raise for state employees and pension increase for state retirees from the current year’s budget; $1.6 million for Delaware State Police salary step increases; $700,000 to the Inspire scholarship at DSU and $200,000 to the SEED scholarship program.

The governor’s capital budget also features just over $8 million to continue work on a new state police Troop 3 facility in Camden and to begin work on a new Troop 7 in Lewes, nearly $10 million for improvements at the Young Correctional facility in Wilmington, and just over $13 million to improve the state biking and hiking trails, as Markell called for in his State of the State address.

Discussion of cuts was largely absent from the budget presentation. When asked, Markell cited open space and farmland preservation. Those programs, which wound up with $20 million combined in the 2012 budget, are budgeted for a total of only $4 million in 2013. OMB director Visalli says there are others as well.

“I’m sure you’ll hear questions [from state agencies] about things that may seem small but added together gave us the ability to fund the things we had to fund in this year’s budget,” said Visalli. “We had to not only take cuts out of some agencies, but not fund increases that were requested.”

The governor’s FY13 presentation also marked a first: the inclusion of a detailed discussion of the Delaware Department of Transportation (DelDOT) budget and the Transportation Trust Fund. DelDOT Secretary Shailen Bhatt laid out a budget he calls “robust, realistic, and responsible” to deal with the agency’s $1.2 million debt and the debt service that eats up 36 percent of the Transportation Fund’s recommended $346 million operating budget. The recommended budget also features a $180 million capital budget, which is limited to a more realistic list of projects that can move forward rather than a wish list of projects that were included in previous budgets.

Briggs-King said Secretary Bhatt’s presentation was a step in the right direction for DelDOT in addressing two of her key concerns.

“The No. 1 issue was transparency and No. 2 a strategic plan,” said Briggs-King. “I’m encouraged by the word, now I just want to see the follow-through.”

Sokola agreed. “It’s important to [present the budgets] together like that and to recognize what [DelDOT is] doing differently than was done in the past, and that they have a clear vision for the future that’s sustainable.”

The legislature begins its work to draft the fiscal year 2013 budget when the Joint Finance Committee opens the six weeks of hearings next week.

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