January 28, 2010

Markell’s FY 2011 Budget Protects the Classroom, Creates Jobs and Makes Government More Cost-Effective. No Tax Increases Proposed

Dover – Governor Jack Markell today released a balanced budget proposal that puts people to work, keeps the state’s commitment to a world-class education system and makes government more cost effective. The Fiscal Year 2011 Operating Budget and Capital Improvements Act meets the growing challenges facing the state’s budget without raising taxes.

“This budget, while difficult, furthers the goals and vision I outlined in the State of the State. It demands a leaner, more efficient government. It encourages economic growth, and it better allows our children to get a world-class education so they can work in first-class jobs,” Markell said.

The FY 2011 Operating Budget totals $3.17 billion. The recommended budget includes more than $143 million cuts to agency funding and maximizes more than $59 million in federal and other funds. The proposed Bond and Capital Improvement Act totals $356.5 million and includes funding for capital education projects, investments in infrastructure and jobs for economic growth.

“The budget we present today is both balanced and responsible. It makes the cuts necessary to make our government more efficient. It maintains fiscal responsibility. It focuses education resources in the classroom, while demanding efficiencies in the backroom office functions of our school districts,” Markell said during his presentation. “It preserves other core functions, such as state police troop strength and healthcare for those vulnerable families who need it. It funds those priorities that will help create jobs and grow our State’s economy.”

The Governor’s Recommended FY 2011 budget fully funds salary steps for public educators, Delaware Technical and Community College employees, and Delaware State Police. It also fully funds the state’s pension liabilities, providing security within the state employee pension fund for retirees and current employees.

While states across the country failed to balance their budgets in time last year, Delaware met its financial obligations by passing a balanced budget that stressed fiscal responsibility and kept its core commitments. The state was rewarded for its approach when all three bond ratings agencies reaffirmed the state’s AAA bond rating, in part because Delaware only appropriated 98 percent of anticipated revenues and met its budget reserve obligation. This year’s budget keeps those priorities and those budget obligations.

The following includes highlights of the Governor’s Fiscal Year 2011 Recommended Operating Budget and Capital Improvements Act:

Education: “As I said in the State of the State, providing a world-class education is not only our moral obligation -- our State’s economic future depends on it,” Markell said.  “Every state is competing for the businesses that seek the best and the brightest of our youth.  So we must build on the foundations of success our hard-working teachers and administrators have already established.”

• Recommended $6.0 million to fully fund unit growth in Public Education, adding more than 90 additional teachers in the classroom.

• Recommended $8.5 million to fund salary steps for public educators and Delaware Technical and Community College employees.

• Recommended $98.8 million in the Capital Budget for Public Education projects, including funding to finish referenda projects in Colonial, Appoquinimink, Caesar Rodney, Smyrna, Lake Forest, Milford and Brandywine school districts.

• Recommended $9.0 million in the Capital Budget for Higher Education projects, including $2.0 million for the University of Delaware to develop the former Chrysler site to provide a center for high-tech laboratories, health sciences and alternative energy research.

Economic Development and Job Growth: “To restore Delaware’s promise and prosperity, we will reshape the way we, as a State, do business, to make Delaware a state where it is fundamentally easier to grow a business and create jobs,” Markell said. “Because employers want to locate in places with great schools and a great quality of life, we are making the proper long-term investments through our Bond Bill to ensure our state’s long-term economic prosperity. “

• Recommended $13.9 million for DEDO’s Strategic Fund, which provides funding for business development, training and job retention and creation.

• Recommended $1.0 million for Experimental Program to Stimulate Competitive Research (EPSCOR), which will match $3.0 million in federal funds.

• Recommended $1.0 million for Fraunhofer Vaccine Development, which leverages a 2:1 match in the development of safe and effective vaccines targeting infectious diseases and autoimmune disorders.

• Recommended $1.0 million for the first year of a 5-year commitment to the Health Sciences Alliance, which is a partnership between the University of Delaware, Thomas Jefferson University, Christiana Care and Nemours dedicated to healthcare education, research and service.

• Recommended $10.0 million for the Diamond State Port Corporation, which will fund capital improvements at the port.

• Recommended $4.5 million in Housing Preservation to preserve and maintain existing housing sites.

• Recommended $19.2 million for the Kent County Courthouse, which includes funding to complete the new Kent County Court facility and renovate the old Kent County Courthouse.

Examples of Government Efficiency and Savings (amounts in thousands): “We have been serious about finding efficiencies and reducing the cost of government,” Markell said. “We have asked our agencies to challenge their conventional wisdom and look for ways to be more efficient, effective, responsive and responsible, and they have.”

•  Realize full-year savings from FY 2010 statewide position reduction - $23,066.0

• Drive down employee health costs by renegotiating the pharmacy contract for prescription drugs and maximizing prescription drug rebates - $5,100.0

• Convert School Resource Officers to School Resource Agents at a rate of five officers per year - $92.9

• Eliminate printing of Governor's operating and capital budget books and providing budget information on CDs and online - $10.0

• Implement new pension tier for new employees, effective Jan. 1, 2011 - $500.0

• Implement new healthcare tier for new employees, effective Jan. 1, 2011 - $1,100.0

• Reallocate the Toll Administration unit from Maintenance and Operations Unit to the Division of Motor Vehicles in the Department of Transportation - create operational efficiencies and future cost avoidance

• Maximize IT resources through statewide shared services and consolidation- $1,000.0

• Drive public education administrative efficiencies through consolidated procurement and purchasing, i.e. E-school mall - $1,479.5

• Reduce funding for public school transportation to reflect reduction in fuel costs and projected new routes - $3,334.9

• Close a portion of the Multi-Security Building at Sussex Correctional Institution and relocate inmates to reduce overtime expenditures - $1,000.0

• Maximize state fleet assets by continuing to downsize the number of vehicles - $426.4

• Consolidate Department of Natural Resources and Environmental Control from six to three divisions to focus resources on clean air, water and the quality of outdoor spaces – streamlines service delivery

• Provide services for residential care in-house at the Department of Services for Children, Youth and Their Families and reduce and eliminate provider contracts - $932.9

• Eliminate the distribution of Personal Income tax booklets and implement online Gross Receipts and Income Tax filing system to reduce associated printing costs - $110.0

• Reduce EZPass Customer Service Center hours - $483.7

•  Reduce the State’s environmental footprint by implementing energy conservation measures - $2,465.5

• Consolidate Delaware Advisory Council on Career and Tech Education into the Department of Education - $318.5

• Reduce grass cutting to bi-weekly at the Department of Health and Social Services’ Holloway campus - $15.9

• Reduce the state’s footprint by reallocating employees from leased to owned space, consolidating lease space and renegotiating leases - $1,100.0

• Consolidate the Board of Parole and reallocate functions of the board to the Department of Correction and the Judiciary - create operational efficiencies.

• Reduce staffing for Inland Bay Enforcement - $30.0

• Eliminate EZPass paper statements - $222.0

• Reduce mosquito control spraying by approximately 5 percent - $40.3

• Maximize resources in the deer management program by working with the Department of Correction to assume food processing function - $61.5

• Eliminate funding for Phragmites Control - $40.8

• Reduce Maritime Exchange funding to reflect funding level of surrounding states - $100.0

• Refinance existing debt obligations to benefit from historically low interest environment - $16,000.0

• Reduce Smyrna Rest Stop staffing hours - $380.0

• Reduce maintenance allowance by 50% for school bus routes exceeding 30 miles - $3,149.8

• Eliminate funding for Beaver Control - $25.0

• Consolidate Department of Education branches from four to three - $310.0

• Consolidate Merit Employee Relations Board into Public Employment Relations Board in the Department of State – creates operational efficiencies

• Consolidate Technology Staff within the Department of Finance to the Office of the Secretary - $299.9

• Reduce overtime costs by eliminating the Motorist Aid program within the Department of Transportation - $231.7

• Reduce printing equipment and maintenance costs through the elimination of  the Department of Technology and Information’s 4100 printer - $97.0

• Use private resources for the Delaware Mortgage Assistance Program - $250.0

• Maximize technology resources by transferring Department of Transportation 24/7 help desk to the Department of Technology and Information - $83.0

• Implement a new lighting control system at the Department of Transportation Administration Building - $5.0

•  Reduce Department of Transportation funding for property maintenance - $50.0

• Eliminate funding associated with the Budget Commission - $40.0

• Leverage federal funds for Health Education/Disease Prevention in the Department of Health and Social Services - $104.1

• Eliminate floral display at the Delaware Psychiatric Center and Holloway Campus in the Department of Health and Social Services - $29.0

• Reduce gypsy moth surveys in Department of Agriculture - $25.6

• Eliminate funding for the State Accounting Course in the Department of Finance - $5.0

• Reallocate the Office of Prevention and Early Intervention to the Division of Prevention and Behavioral Health Services in the Department of Services for Children, Youth and Their Families - streamline service delivery

• Maximize Department of Transportation fleet assets through technology to track location, vehicle use, maintenance metrics, etc. - $150.0

Fiscal Year 2011 Governor's Recommended Operating and Capital Budget Information