Governor Proposes Investments in Job Growth, Stronger Schools while Governing Responsibly

Fiscal Year 2014 Budget Keeps Core Commitments to Education, Public Safety and Healthcare; Lowers Current Personal Income Tax Rate

New Initiatives Focus on Expanding Services for Youth and Enhancing School Safety

DOVER – Governor Jack Markell unveiled a balanced budget proposal that invests in jobs, education and the safety and well-being of our children. His budget keeps the focus on core commitments such as healthcare and public safety and ensures continued fiscal responsibility.

“We want to make sure we are growing jobs while ensuring the safety and well-being of our children,” Governor Markell said. “This budget addresses critical needs of the world we now live in, while considering demands that will be placed on us in the years ahead.”

The Governor expanded on a series of proposals from his State of the State aimed at ensuring Delaware’s children are fully supported within their communities and exposed to positive opportunities. Specifically, he recommended $3.3 million in funding to increase the number of trained, front-line mental health personnel in our middle schools – an area currently under-resourced, with just three of Delaware’s middle schools having full-time professionals responsible for the mental health needs of students. This budget would increase that number to 30.

“I am proposing a ten-fold increase in the availability of mental health professionals who can work with our middle school children to make sure that their issues are being diagnosed and referred to proper treatment,” said Governor Markell.

An additional $2.2 million investment in statewide targeted prevention programs for youth.

“Research tells us by investing in after-school and summer programs, we can improve academic performance, reduce dropout rates, improve self-esteem and prevent risky behaviors,” Governor Markell said. “By funding these initiatives, we address a critical gap in services for children and help ensure they are given the best chance at growing up to be healthy, successful, productive adults.”

The Governor proposes an allocation of $300,000 to accelerate development of school safety plans and $530,000 to hire six Delaware State Police Troopers to fight violent crime; $515,000 to the Department of Services for Children, Youth and Their Families to support youth aging out of foster care; and $93,000 to the Delaware National Guard for its Youth Challenge program, which helps 16-18 year old high school dropouts gain the values, life skills, education and self-discipline they need to succeed.

While the Governor’s new initiatives represent just .194% budget growth, the recommended budget furthers the Governor’s priorities of stronger schools and job growth.

The budget proposal includes significant investments in public education, including $8.7 million for 110 new teacher units in schools, $8.5 million for step increases for school employees and $1.5 million to annualize salary increases for paraprofessionals. The recommended capital budget dedicates $99.0 million for construction projects in school districts throughout the state.

“Investing in education remains a guiding principle of our budgeting strategy,” said Governor Markell. “We must continue to strengthen our schools and prepare students to be in the workforce of tomorrow.”

The Governor also highlighted efforts by State agencies to govern responsibly through efficiencies and reductions.

“As the demands on state government increase and out year revenue forecasts decrease, we must remain fiscally responsible with taxpayer dollars,” said Office of Management and Budget Director Ann Visalli.

The Governor has proposed reducing personal income tax rates and other revisions to the series of revenue increases enacted in 2009 that are scheduled to sunset. These revisions are aimed at relieving the burden on small businesses and manufacturers while stabilizing the state’s revenue base for Fiscal Year 2014 and beyond.   If the current tax sunsets are allowed to take effect, the state could face a projected revenue shortfall of $266M in FY2015.  The governor’s proposal helps address that shortfall while reducing current tax rates on individuals and small businesses.

“The tax proposals are aimed at stabilizing our revenue situation this fiscal year while being mindful of the need to consider challenges we face beyond the upcoming fiscal year,” said Tom Cook, State Secretary of Finance.  “If we let taxes completely sunset, we will likely face a formidable fiscal problem in FY15.”

The specific proposals include:

  • Personal Income Tax – Already reduced in 2012, the Governor’s proposal reduces the top personal income tax rate again. In 2009, the top personal income tax marginal rate (on income above $60,000) was increased from 5.95% to 6.95%. Effective January 2012, that rate was reduced to 6.75%. The Governor proposes dropping that rate to 6.6%. (Effective January 1, 2014)
    • The proposed top rate of 6.6% is still among the most competitive in the region:
      • New Jersey = 8.97%
      • Maryland (Including counties) = 8.625%
      • Washington, DC = 8.5%
  • Gross Receipts Tax – In 2009, the gross receipts tax increased 8% across all business categories. Effective January 2012, rates were reduced by 3%, and the monthly exclusion was increased from $80,000/month to $100,000/month, removing 330 businesses from the tax rolls. The Governor proposes cutting the tax on manufacturers by 30% and dropping the gross receipts tax for all other businesses by another 1%, while maintaining the more generous $100,000 exclusion. (Effective January 1, 2014)

The Governor’s gross receipts tax package supports two of Delaware’s most critical economic drivers – small businesses and manufacturing. Compared to the original sunset proposal, small businesses fare better under the Governor’s package:

§         For example, businesses in the service sector with annual receipts under $7.6 million pay less under the Governor’s proposal; and

§         Businesses with annual receipts under $1.2 million generally pay no tax.

  • Corporate Franchise Tax – In 2009, the corporate franchise top tax rate increased from $165,000 to $180,000. The Governor proposes keeping the current tax rate in place.
  • Estate Tax – The Governor proposes lifting the sunset. Under the Governor’s proposal, farms in the Aglands Preservation program will still be excluded from the tax.  In 2011, the estate tax exemption increased from $3.5 million to $5.12 million.

The Fiscal Year 2014 Recommended Operating Budget totals $3,712.0 million. The proposed Fiscal Year 2014 Recommended Bond and Capital Improvements Act totals $423.5 million and includes $239.3 million in State agency capital projects and $184.2 million in Transportation projects. The Governor also set aside $43.0 million for Grants-in-Aid.

A power point of the proposal is available online: http://budget.delaware.gov/fy2014/budget_presentation.pdf.

A supplemental document for the Capital Budget is also available online: http://budget.delaware.gov/fy2014/capital/cap_budget_supplement.pdf

 


Governor Markell Announces 2012 Team Excellence Awards

DOVER – Governor Jack Markell announced today that the eight member Department of Technology and Information Continuity of Operations Planning (COOP) Team is the 2012 recipient of the Governor’s Team Excellence Award. This annual award encourages teamwork by recognizing groups of State employees for their efforts to use continuous quality improvement tools to excel in leadership, team dynamics and communication to produce superior customer service and tangible results. This year, 13 teams, representing the efforts of 290 state employees, were nominated for the award.

Delivery of services to its citizens is a core responsibility of state government and the ability to provide those services can be interrupted by disasters brought on by the forces of nature or by the actions of human beings, either by accident or design.  This team, composed of subject matter experts from across DTI, developed and implemented a strategy for continuity of operations planning in 45 of the most critical departments and divisions in state government.

“It is vital we remain diligent in our efforts to ensure state government is able to provide services in the event of an emergency and this team’s efforts provide the state with valuable tools to mitigate risks and make recovery decisions consistent and efficient and, in turn, enable a smooth and effective recovery”, said Governor Markell. This team was also recognized by DRI International, a non-profit organization and global education and certification body that serves the business continuity community, as the Strategy of the Year.

In addition to the award recipient, four other teams were recognized as finalists:

  • DSAMH USDOJ Project Leadership Team:  This team successfully planned, developed, and reorganized the entire adult mental health systems of care for Delaware citizens in just two and a half years.  Through this team’s efforts, 85% of their original goal was accomplished within budget using evidence-based, best-practice models of care.  Through the Division of Substance Abuse and Mental Health and Delaware Psychiatric Center’s (DPC) work, 140 long term care clients were placed in their homes and communities, with an additional 50 clients expected to be placed this year.  A new 24/7 resource center was opened in Ellendale, and five peer-run service centers and drop-in centers are now operating in Delaware.  DPC reduced its staff by over 100, and the adult mental health system of care for Delaware citizens was reorganized resulting in cost savings through improved efficiencies.  This team’s efforts demonstrate the State’s commitment to ensuring that individuals with severe and persistent mental illness are treated with compassion in the most integrated setting appropriate to their needs.
  • Money Follows the Person Transition Team: This cross-functional team of nurses, case managers, supervisory and administrative staff from two divisions in DHSS, used teamwork to re-balance the long-term care system in Delaware to transition residents from nursing home and institutional care to home and community-based care.  Since the work of this team began, Delaware’s Finding a Way Home, has transitioned 40 residents of nursing homes, the Governor Bacon Health Center, the Emily P. Bissell Hospital, and the Delaware Hospital for the Chronically Ill to community placement, providing Delaware’s most vulnerable citizens with options to receive care in the setting most desirable to them.  The work of this team also resulted in improved efficiencies, cost avoidance, the reallocation of existing resources, and the improved quality of life of older Delawareans and people with disabilities.
  • Super Storm Sandy Route 1 Response Team: This team of Equipment Operators, Engineering Planning Technicians, Physical Plant Trades Mechanics, managers and supervisors from the Department of Transportation worked diligently to open SR1 at the Indian River Inlet Bridge after Super Storm Sandy by working together and fabricating equipment to meet the unique needs caused by the storm.  Using their creativity and ingenuity this team fabricated special tools such as modifying a skid steer (small piece of construction equipment that is usually used for digging) to slide between guardrail posts to remove sand.  This equipment enabled the team to remove sand spanning over four feet deep and extending up to 230 feet wide and 2,880 feet in length, saving the state time and money in recovery without any accidents or lost-time injuries.  Through this team’s efforts, approximately 75,000 cubic yards of material was removed from the roadway and pipe systems, enabling the reopening of SR1 and the restoration of the drainage system and reducing the likelihood of additional roadway flooding from normal rain events.
  • DMV Self-Service Kiosk Implementation Team:  This team consisted of experts from Division of Motor Vehicles (DMV) Driver Services Business/Operations Unit and DelDOT’s Office of Information and Technology who worked together to create the DMV Self-Service Kiosk for Delaware citizens.  As a result of their hard work and dedication, DMV successfully implemented seven self-service kiosks in three DMV facilities.  In only a few months, over 2,500 Delaware citizens have completed routine transactions without waiting in line, saving them time and resulting in savings of 167 hours of wait time for the rest of DMV’s customers.


Flags to Remain at Half-Staff in Honor of Sen. Inouye

President Obama Tuesday ordered American flags at all U.S. government buildings and facilities remain at half-staff in memory of Senator Daniel K. Inouye, President pro tempore of the United States Senate, until the date of his interment. In concurrence with the President’s order Gov. Markell has ordered the American and Delaware flags at state buildings facilities also be flown at half-staff until such date.


Flags lowered to half-staff today

DOVER – President Obama Friday ordered American flags at all U.S. government buildings and facilities to be flown at half-staff until sunset on Tuesday, December 18, “as a mark of respect for the victims of the senseless acts of violence perpetrated on December 14, 2012, in Newtown, Connecticut.” In concurrence with the President’s order and as an expression of Delaware’s sympathy for the people affected by the tragedy in Connecticut, Gov. Markell has ordered the American and Delaware flags at state buildings and facilities also be flown at half-staff until the end of the day on December 18.


Public Input Regarding OMB Regulations Will Be Accepted Through December 1

DOVER – The Delaware Office of Management and Budget (OMB) today issued a reminder to Delaware business owners and other interested stakeholders that it is still accepting public comment under Governor Markell’s Executive Order 36, which requires agencies to identify unnecessary or overly burdensome regulations to be streamlined or eliminated.

OMB announced that public comments will be accepted online and by mail through December 1. Individuals who wish to submit comments may do so using the agency’s online submission form. Comments may also be mailed to Office of Management and Budget, c/o Jessica Eisenbrey, 122 William Penn Street, Ste. 301, Dover, DE 19901.

Executive Order 36 is a mechanism for agencies to review existing regulations and eliminate outdated or inconsistent regulations or ones that no longer serve their purpose. OMB held public hearings in each county on September 27, October 4 and October 11.

After December 1, the agency will consider the input received and streamline or change regulations accordingly. In June 2013, the Governor’s Office will submit a report to the General Assembly detailing the regulatory changes made by each agency.