Plan focuses on strengthening economy, expanding opportunity, supporting families and workforce

WILMINGTON, Del. – Governor Carney on Thursday presented his Fiscal Year 2023 Recommended Budget virtually, sending the General Assembly a plan that will strengthen Delaware’s economy, expand opportunity, and supporting Delaware’s families and workforce.

“We made it through the worst of the pandemic without cutting services or raising taxes. Responsibly managing our state budget is more important than ever. This budget proposal will do just that,” said Governor Carney. “Delaware will come out stronger through this pandemic. That’s why we’re investing in economic development to prepare our state for the economy of the future. That’s why we’re continuing to invest in Delaware’s children, families and workforce. And that’s why we’re investing in protecting Delaware’s natural heritage. I want to thank members of the General Assembly for their partnership and for their consideration of this budget.” 

Fiscal Year 2023 Budget Highlights

• General Fund Operating budget totals $4.9 billion, limiting growth to 4.6%
• Sets aside over $15.2 million in reserves (after projected cash to bond bill and grant in aid)
• Appropriates $215 million toward one-time items in a separate supplemental appropriation bill
• Takes continued steps toward providing compensation and pay equity for state employees
• Increases Opportunity Funding investments in our schools for low-income students and English language learners
• Continues investments in clean water, economic development and fulfills our commitments to new school construction in all three counties
• Continues to fund secure and modern spaces for Kent and Sussex County courthouses

Preparing for the Economy of the Future

• Invests $60 million in economic development, including:
  • $30 million in strategic fund
  • $10 million in site readiness
  • $10 million in graduation lab space
  • $10 million in transportation infrastructure fund

Environmental Initiatives

• Invests $404.7 million in environmental justice, including:  
  • $30 million in aglands preservation and open space
  • $7.5 million in shoreline and waterway resiliency
  • $367.2 million in clean water, including $355 million in federal funding

Investing in Delaware’s Children

• Invests $339.9 million in funding school projects, including $19.8 million for the Wilmington Learning Collaborative and Redding Consortium
• Increases funding by $4.5 million for low-income students and English learner students towards achieving the goal of doubling opportunity funding by 2025
• Invests $20.6 million to support mental health service units for elementary schools
• Invests millions in Delaware’s higher education institutions including capital improvements, technology upgrades, scholarships, and investments into the Higher Education Economic Development Investment Fund

Supporting Delaware Families

• $1.4 million to support extended post-partum Medicaid coverage
• $1.5 million for the development of a therapeutic foster care program
• Nearly $1 million to support the growth of Delaware Healthy Children Insurance Program (CHIP)
• $3.7 million to support expungement programs

Supporting Delaware’s Workforce

• Investing $88.7 million in compensation and pay equity to move toward a $15 minimum wage for state workers, increase to merit pay scales or 2% pay increase
• Supporting Health Care Workers
  • $500,000 to increase funding for the Health Care provider State loan repayment program
  • $300,000 to permanently fund the mental health services loan forgiveness program
• Supporting Child Care Providers & Workers
  • $11.5 million in increased support for child care providers and workers

 

Click here to download Governor Carney’s Fiscal Year 2023 budget presentation.

Click here to watch Governor Carney’s virtual budget presentation.

WILMINGTON, Del. – Governor John Carney on Wednesday issued the following statement on the General Assembly’s passage of the Fiscal Year 2021 operating budget:

“This has been a difficult several months for Delaware, to be sure. I want to start by thanking members of the General Assembly – and especially members of the Joint Finance Committee – for their work under challenging circumstances to pass a responsible, balanced budget. My priorities for the budget have been consistent. Despite significant revenue challenges related to the COVID-19 crisis, we intended to protect critical investments in public education, and to protect the jobs and livelihoods of Delaware’s state workers. This budget will do just that.

We are not laying off state employees, or cutting their benefits. State workers have been on the front lines of this crisis, and we owe them our gratitude. We will also continue investments to support students and educators statewide through our Opportunity Funding program. This program supports students living in poverty, and students who are still learning English. I can’t think of a more important investment in Delaware’s future.

We were only able to continue these important investments because we acted responsibly in good times, and set aside surplus revenue into savings. We should continue to act responsibly. Let’s get the other budget bills done. The grants-in-aid bill provides critical funding for fire companies, senior service organizations, and other critical service providers that Delaware families rely on every day. They deserve our support, especially during this uncertain time. The capital budget makes investments in infrastructure statewide – in school construction, road and bridge improvements, and farmland preservation. Those investments will strengthen our economy and our communities. Let’s move forward.”

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Refunding transaction helps address the State’s budget challenges

WILMINGTON, Del. – The State of Delaware today announced the successful refunding of $33 million of debt at a record low Total Interest Cost of 0.79%. The transaction will save the State $5.2 million in debt service on a net present value basis over the next decade and is structured to further help the State address the Fiscal Year 2021 budget challenges brought on by the COVID-19 emergency.

Three bond rating agencies reaffirmed Delaware’s Triple A rating – Fitch, Moody’s and KRBA – with each taking note of the work of Governor John Carney and the Delaware General Assembly in recent years to boost reserves to prepare for economic downturns. J.P. Morgan Securities LLC served as senior managing underwriter for the transaction.

View rating agencies’ credit reports.

“Delaware continues to receive high marks for fiscal management which allows us to sustain the important investments we’ve made in our schools, our communities and our economy, including efforts to address the impacts of COVID-19,” said Governor John Carney. “The COVID-19 emergency presents enormous financial challenges for every state including Delaware. But I think all Delawareans can be proud of the work we’ve done with the General Assembly to boost the State’s finances prior to this unanticipated event, so our State is better prepared to weather the storm.” 

“This successful transaction shows the market’s confidence in Delaware despite the near-term challenges faced by every state,” said Secretary of Finance Rick Geisenberger. “The competitive pricing and debt service savings achieved for Delaware’s taxpayers speak volumes about our State’s continuing financial strengths.”

“The reaffirmation of the State’s Triple-A bond rating is a huge vote of confidence during these uncertain economic times,” said State Treasurer Colleen Davis. “The State’s best practices including using one-time revenue for one-time expenses, and increasing our reserves, will go a long way to see that we emerge from this crisis maintaining our economic strength.”

KRBA views the financial position of the State as “very strong based on its conservative budgeting policies, comprehensive and timely process of revenue estimation, high levels of financial reserves and strong liquidity. In response to the economic impacts of pandemic, the State has constrained its FY2020 spending and projected expenditures are under budget.”

Moody’s noted that “Delaware’s Aaa rating is supported by its healthy and stable finances and its strong management and governance, all of which enhance the state’s capacity to weather the economic downturn caused by the coronavirus outbreak. The state’s recent growth in reserves provide a cushion in the currently challenged economic environment brought on by the coronavirus pandemic.”

Fitch also noted that “Delaware’s history of exceptional financial resilience and strong budget management may be tested by the depth and duration of this downturn. However, Delaware’s close tracking of both revenues and expenditures and frequent revenue forecasts updates have historically allowed it to quickly respond to changing economic conditions. Fitch anticipates the state will take appropriate action to maintain balance.” 

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All three major credit rating agencies award Delaware with ‘AAA’ bond rating

WILMINGTON, Del. – All three major credit rating agencies have once again awarded Delaware with a ‘AAA’ rating, citing the state’s ongoing commitment to strong fiscal management. With this endorsement, Moody’s Investors Service, Fitch Ratings, and Standard & Poor’s Global Ratings have favorably acknowledged the current administration’s efforts to balance the state’s budget, make difficult cost cutting decisions, and develop new ways to raise revenue.

“Delawareans expect us to responsibly manage taxpayer dollars, and these ratings reaffirm that we are committed to doing just that,” said Governor John Carney. “We remain focused on building a sustainable financial plan, operating efficiently, and making important investments in education, our economy, and other services that make Delaware an even better place to live, work, and raise a family.”

The ratings agencies noted that Delaware has a strong government framework and provides frequent updates to revenue forecasts. This sets the stage for the state’s ability to proactively manage its budget, and respond to fluctuations in the economy – resulting in what they referred to as the state’s exceptional financial resilience.

Delaware officials worked quickly with financial advisors and bankers over the last two weeks to respond to proposed tax policy changes under consideration by Congress. The State disclosed, structured, marketed and closed $115 million of advance refunding bonds in record time, ensuring that state taxpayers did not miss out on a $4.7 million savings opportunity created by this refinancing.

“Positive credit ratings ultimately translate into long-term savings for Delawareans,” said Rick Geisenberger, Secretary of the Delaware Department of Finance. “In this case, our ability to move quickly to adapt to rapidly changing market conditions will also create near-term savings that will free up funds to invest in growing our economy and improving the lives of Delaware citizens.”

 

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Dover, DE – Early this morning, Governor Jack Markell signed a balanced Fiscal Year 2017 budget funding programs that build on the progress made to increase Delawareans’ opportunities to make the most of their talents. The budget reflects changes realized and reinforced by the Administration and the General Assembly over eight years, helping the state achieve the fastest job growth in the region while raising the quality of life for all Delawareans.

“By continuing our focus on the areas that have the greatest impact on our future prosperity, like education and job training, research and innovation, we’ll make sure our state continues to become a prosperous place to live, work, and raise a family,” Governor Markell said.

Read facts about Delaware’s progress here.

2017 Operating and Capital Budget and 2016 Legislative Session Highlights

Fiscal Responsibility

The Fiscal Year 2017 Operating Budget, Bond and Capital Improvements and Grants-in-Aid bills hold true to the Administration’s commitment to fiscal responsibility by only appropriating 98 percent of anticipated revenue and fully funding the Rainy Day Fund, commitments that have helped Delaware maintain its coveted Triple-A bond rating.

• The Fiscal Year 2017 Operating Budget represents 4.49% growth over Fiscal Year 2016, with the vast majority of that growth earmarked for increases in Medicaid ($63.1 million), state employee and retiree healthcare ($33.3 million), state employee salaries ($20.3 million), and school employee step and pay plan increases and unit count obligations ($26.0 million).

• Average annual budget growth during the Markell administration (2009-2016) has been negative, and the lowest in the last 40 years, when adjusting for inflation and population growth.

• As of June 1, there are 733 fewer state employees working in the Governor’s executive branch agencies compared to March 2009. More than 1,100 positions have been eliminated, and a further 35 were eliminated in the Fiscal Year 2017 Operating Budget.

“While our collective efforts to develop a responsible and balanced spending plan for Fiscal Year 2017 should be celebrated, this year’s budget was especially challenging. Growing costs in some areas, particularly in health care, are unsustainable and I’m hopeful that proposals we have made will set the stage for reforms because without change, we cannot afford other key investments.”

Economic Development

“We are well positioned to continue to create jobs and grow Delaware’s economy,” Markell said. “We have built on our progress this year by making our tax code more sensible for businesses large and small, supporting research and innovation, and continued focus on economic development in our downtowns. This will put Delaware in a stronger position to retain jobs and encourage employment growth in the years to come.”

• Bipartisan Delaware Competes Act (HB 235) changes the way corporate income tax is calculated to ensure companies are incentivized to hire and expand in the state, and to modify filing requirements that were overly burdensome to small businesses.

• The Commitment to Innovation Act (SB 200) includes provisions to expand the state research and development tax credit and incentivize companies to establish headquarters in Delaware.
• The Fiscal Year 2017 Bond and Capital Improvements Act includes $8.3 million to support the Downtown Development Districts program, which the Governor proposed, and the General Assembly passed, in 2014. Since then, $14 million in grant funding has been allocated through the program which, in turn, is leveraging more than $290 million of private investment in the current districts. It also includes:
o $4.5 million to support the redevelopment of the former NVF and Ft. DuPont sites
o $10.0 million for the Delaware Strategic Fund
o $15.8 million to support investment and growth at the Port of Wilmington

• House Bill 327, proposed in the Governor’s 2016 State of the State Address, will permit the use of online crowdfunding platforms, allowing Delaware residents to invest in Delaware start-ups and small businesses, expanding the potential pool of investment capital for small businesses while also giving Delawareans the chance to be early stage investors in these ventures.

In addition to legislation and budget items, during the last year the Administration’s TechHire initiative expanded through a new coding school at Delaware Tech, the innovative Pathways to Prosperity program experienced continued growth, enrolling 2,500 students this past school year and on track to doubling the size of the program to 5,000 this coming fall, and a partnership with McKinsey Social Initiative’s Generation USA Youth Employment Program was established to provide workforce training to disadvantaged Delawareans in a variety of in-demand fields.

Education

“Students of all ages will have more access to great educational opportunities because of investments in high-quality early learning, innovative programs like world language immersion, and greater chances to earn college credit and workplace experience before graduation,” said Markell. “And, for the first time, we have recognized that our educators deserve to be paid more for taking on additional leadership responsibilities while remaining in the classroom, rather than only by becoming administrators.”

• Governor Markell applauded passage of Senate Joint Resolution 17 and Senate Bill 300, which supports continued efforts by the Wilmington Education Improvement Commission to improve educational opportunities for many of our most vulnerable students and their families, including ongoing consideration of the difficult process of redrawing district boundaries in a way that makes sense for all families.
New education investments enacted this year include:

• The Fiscal Year 2017 Operating Budget includes $9.4 million in new funding to continue projects that support access to high-quality early learning programs for low-income children and improve early learning opportunities for families throughout Delaware. Through a shared commitment to investing in early childhood education, since 2011 the number of low-income kids who attend the most highly rated early childhood education programs has risen from just 5% to 70%.

• The Fiscal Year 2017 Operating Budget includes $1 million in new funding to pilot opportunities for educators to earn more for taking on leadership responsibilities without leaving the classroom for administrative positions and provides stipends for educators who aren’t receiving compensation for their National Board Certification.

• The Fiscal Year 2017 Bond and Capital Improvements Act includes $76.4 million to fund public education construction projects throughout the state.

• The Fiscal Year 2017 Operating Budget invests $26 million in new funding for teacher compensation and schools to maintain the Administration’s commitment to targeted class sizes and quality education.

Public Safety and Criminal Justice Reform

“Public safety is our highest priority and is vital to creating opportunities in communities statewide,” Markell said. “We remain vigilant in cracking down on criminals who threaten that safety, but we recognize that lengthy mandatory sentences, especially for drug offenses that did not include an act of physical violence, don’t make us safer and are massively expensive. Delaware has done much in recent years to protect the public by keeping guns out of the wrong hands, and we should all be proud that we took another common sense step this year by closing a loophole that allows people to purchase firearms without passing a background check.”

• Senate Bill 163 eliminates mandatory minimum life sentences, provides additional discretion to judges in imposing sentences for repeat offenders, and provides a mechanism for those convicted under the existing habitual offender law to petition the court for a sentence modification.

• House Bill 325 extends from three to 25 days the amount of time for a background check to be completed before a gun buyer may complete his or her purchase. It will not affect the vast majority of purchases since more than 91 percent of background checks are completed within minutes or, at most, hours. The three-day limit has become known as the “Charleston Loophole” after last year’s mass shooting in which nine people were murdered in a Charleston, S.C. church. The suspected gunman purchased the firearm used in the killings through the delayed transaction loophole after a background check took longer than three days. It was later determined that the sale should have been denied.

• Senate Bill 242, which ensures that individuals aren’t prevented from exercising their fundamental right to vote by removing the financial bar to restoration of voting rights for people convicted of felonies who have completed their sentence. Delaware had been one of only three states that required payment of financial obligations before restoration of voting rights, and the only state with a statutory bar to restoration of voting rights until full payment was made.

• The Fiscal Year 2017 Bond and Capital Improvements Act includes $6.35 million to fund a modern communication system for public safety agencies and emergency responders.

Civil Rights

“Thanks to the committed leadership of civil rights icons, civic leaders, and ordinary Delawareans, our state today is a place of acceptance and tolerance, but we can’t avoid the legacy of our long struggle with issues around race and we can’t avoid the enduring impact of historic discrimination,” Governor Markell said. “Accepting the responsibility of tearing down barriers that face so many of our neighbors as a result abhorrent laws and practices carried out against African-Americans is an important step toward creating equality of opportunity and the society we dream of for us and for our children.”

• House Joint Resolution 10 apologizes for Delaware’s historic role in slavery, acknowledges its painful and lasting legacy, and commits to embracing a future free of racial bias, prejudice, and discrimination. Governor Markell joined legislators, civil rights and civic leaders, educators, and community members to sign the resolution in a commemorating marking Black History Month.

Quality of Life

“We realize the full potential of our state’s high quality of life and strengthen Delaware’s communities by encouraging homeownership, investing in accessible public facilities, and connect residents and visitors with opportunities to enjoy our abundant natural resources,” Governor Markell said.

• The Fiscal Year 2017 Bond and Capital Improvements Act includes more than $20 million to invest in a variety of projects that will strengthen neighborhoods and improve the quality of life:
o $6.0 million to replenish the State Housing Authority’s Housing Development Fund
o $10.7 million to continue the Markell Administration’s historic support of public library construction in all three counties, a record for any administration in state history
o $3.5 million to support the rehabilitation of state park facilities
o $2.5 million to build on record construction of new public trails and pathways during this Administration

Social Services/Healthcare

“We have an obligation to act to protect vulnerable Delawareans and we’re doing that by increasing opportunities for those with disabilities and mental illness to meet their full potential through employment and independent living, and by expanding efforts to intervene with those who are struggling in the drug abuse epidemic or are at risk of contracting communicable diseases,” Governor Markell said.

• The state’s 2017 Operating Budget includes new funding $4.8 million for the Division of Developmental Disabilities Services to support 75 additional residential placements and 140 additional special school graduates and $250,000 for community-based services for individuals with serious and persistent mental illness.

• Senate Bill 259 authorizes the Division of Public Health to expand the existing Syringe Exchange Program statewide. This program helps reduce the sharing of potentially infected needles, educates participants about the dangers of contracting HIV or hepatitis through needle-sharing practices, and provides HIV and other communicable disease testing to support the state’s larger efforts to address opioid addiction and HIV transmission.