Fiscal Year 2008 Budget Proposal by Governor Ruth Ann Minner
January 25, 2007
As you heard me say in my State of the State address last week, we are continuing to focus on key areas like education, health care, the environment and our economy. I’m proud of our achievements in these and other areas of state government, but we still have work to do.
We are, however, facing uncertain economic times, and for that reason, we are holding budget growth to under 5 percent.
Today, I present to the General Assembly and the people of Delaware a proposed general fund operating budget of $3.25 billion, which represents an increase of 4.73 percent over last year’s budget. My capital budget—also known as the bond bill—is $554.8 million, with $224.6 million appropriated for public education, higher education and agency projects and $330.2 million in transportation funding.
Education
I will start by offering some details of my recommended spending on education, which I am pleased to say includes the completion of our plan to place a math specialist in every middle school in our state. This program is an important one, as we need to reach those middle school students who are struggling with math to keep them from falling behind. My similar program to put reading specialists in every elementary school has proven to be extremely successful, so we know this is money well spent. This year, we will add the remaining 10 math specialists we need to complete this program at a cost of approximately $700,000.
We will continue to fund our full-day kindergarten programs, this year recommending $13.6 million to implement full-day K in 11 school districts and eight charter schools.
This represents $6 million in new funding over what was budgeted for the current fiscal year and will result in even more students being able to take advantage of full-day instruction during their critical early years of learning.
For the upcoming year, I am recommending $98.2 million in capital construction funding for public education. Clearly as the state grows, more children enter our schools needing a quality place to learn. As our population grows, there is continued pressure on our state facilities and our community college system. I look forward to discussing the report regarding Delaware Technical and Community College’s capacity to meet its growing capital demands.
Our successful Student Excellence Equals Degree (or SEED) program is helping more than 800 students go to college for free this year. For the next fiscal year, we plan to add $1 million in new funding for this program, bringing the total budgeted amount to $2.4 million.
I am recommending that we spend $3.9 million on public education efforts that support or are consistent with the Vision 2015 plan to support our goal of making our schools the best in the world. I won’t detail every dollar of that spending in this speech, but included in that funding is $300,000 for financial incentives for our early childcare centers, $620,000 to the University of Delaware for recruitment, retention and professional development of teachers in our critical need subject areas and $250,000 to provide additional support for our growing population of Limited English Proficient students. This funding also includes more than $2 million for Department of Education programs that support the Vision 2015 goal of developing and supporting high quality teachers.
I mentioned last week a program to promote better health among our students and am pleased to say that I am recommending we spend $250,000 on fitness-grams for our state’s students.
Many of our schools already have such programs underway, but this money will be available to those schools that need additional resources to help implement their student fitness programs.
Health
Working toward better health for all Delawareans continues to be a primary focus of my administration, and one of our key priorities in this area has been fighting cancer. I am recommending that we continue implementing the recommendations of the Delaware Advisory Council on Cancer Incidence and Mortality with funding of $16.2 million.
Part of that would be used to increase funding for our cancer treatment for the uninsured from one year of treatment to two years. We will also provide a vaccine to help prevent cervical cancer for uninsured girls ages 9 to 17—the target population for the virus known to cause this cancer in women.
As I announced last week, I propose that we increase the cigarette tax by 45 cents a pack, which at $1 dollar would still be one of our region’s lowest. This would not only help cut down on youth smoking, but would create the Delaware Healthy Life Fund. This fund would focus on the health needs of our state’s most at-risk population and would result in $5 million to fund initiatives for the uninsured and underinsured, $1.1 million to expand the Delaware Healthy Children Program (CHIP) and $1 million to implement recommendations of the Health Disparities Task Force, which has been working under the leadership of Lt. Gov. John Carney to eliminate disparities in health care among different ethnic groups.
We are continuing efforts to address infant mortality in our state and plan to spend an additional $1.9 million in the next fiscal year to implement recommendations of the Infant Mortality Task Force, bringing our total spending on this effort to $4.6 million.
I’m also pleased to say that we are finally able to start a Medicaid buy-in program that will enable Delawareans to earn a higher salary while still being eligible for Medicaid benefits.
And I look forward to an announcement soon about expanding our Delaware Helpline to provide 24-hour information services to our state residents.
Economy
In the area of economic development, we plan to fund year four of my New Economy Initiative with $5 million. This will fund a new initiative to promote a Pre-Venture Fund to provide seed funding for fast-growing small businesses in technology fields. This, coupled with the Emerging Technology Center and the New Intellectual Property program, will all fit together as a one-stop service for those wishing to start a business.
I am also recommending that we put $12 million toward our strategic fund, $1 million toward the development of new vaccines at the Fraunhofer Center for Molecular Biotechnology and $600,000 in crop insurance for our farmers. We will also continue our support of the Riverfront Development Corporation and the Port of Wilmington.
Environment/Livable Delaware
Protecting our environment and improving the quality of life in Delaware through my Livable Delaware initiative remain among my top priorities, and for the upcoming fiscal year, we want to continue to devote $20 million to further our efforts to preserve farmland and open space in the First State. And for the first time, I recommend that we budget $1 million for forestland preservation in our state.
Our land is our most precious resource, and I firmly believe that our efforts to preserve open space are among the most important as we strive to keep Delaware a place people want to live and raise their children.
We also recommend $5 million to preserve our beaches, which are obviously vital to our tourism industry, and $1 million for a dam emergency planning fund.
Legislative/Safety/Youth
Our new Veterans Home will open for patients this spring, and I am recommending a $9.9 million operating budget for that facility. This home is a first for Delaware and fulfills a long-time dream for our veterans. I am pleased we are able to make this dream come true for those who bravely served our state and our country.
We are continuing with my plan to add more troopers to our Delaware State Police force. I am recommending the addition of six more troopers at a cost of $465,200. This will bring our ranks to 661, keeping us on track to reach my goal of having 680 troopers by 2008.
Our efforts to reform our juvenile justice system are still underway, and I am recommending that we fund these efforts with $4 million dollars for the upcoming fiscal year. I think we all agree that this is money well spent to help the youngest members of our society get their lives on the right track, which will save us money in the long run.
Transportation Trust Fund
Today, I will detail some of our efforts to address the shortfall in the Transportation Trust Fund. You heard me say last week that what was originally estimated as a $2.7 billion shortfall is now estimated at $1.5 billion as a result of efforts to contain costs, maximize federal spending and reprogram capital projects. However, that is still a significant financial need to address.
Our plan to overcome this shortfall has a number of components. This is a structural problem and therefore requires a long-term solution as opposed to a one-time fix. Included in the budget information you receive today are details of a revenue enhancement package, part of which includes some increases in user fees that have not been raised in more than 40 years. We also stand to gain more than $14 million in federal funding if our legislature passes open container legislation that’s been on the table for several years.
Door Openers
This year, as in years past, we have seen significant increases in much needed services and programs that we must fund to ensure that our state residents are properly taken care of. We refer to these items as “door openers.”
Among these items are Medicaid, an area in which costs continue to increase—we’re looking at an additional $38.3 million for the next fiscal year—increases in our public school enrollment numbers, which will result in another $9.6 million, and Other Post Employment Benefits (also known as OPEB), to which we plan to dedicate $40 million as part of our comprehensive plan to meet our obligation on this issue.
Salary Policy
I want to again reward our state employees for their service by proposing a 2 percent salary increase (plus steps for educators) to all employees. In recent years, we have been able to give raises of between 5 and 8 percent for many employees as part of my effort to bump up salaries for those employees at the lower end of the pay scale, but unfortunately, this is not possible given the current economic forecast.
I have also commissioned a report to review public education salaries and look forward to receiving that report on May 1st, which should address the sustainable wage issue I raised last year.
Conclusion
I am proud of our efforts to keep Delaware in sound financial shape and am pleased to again be presenting a responsible budget that will finance critical priorities and fund core services, while keeping growth at under 5 percent for next year.
I want to thank J.J. Davis and her staff in the Office of Management and Budget, my Cabinet and staff and especially our state employees for their hard work and dedicated efforts to serve the people of Delaware.
I am looking forward to discussing my proposed budget with members of the Joint Finance Committee in the weeks ahead and working with the entire General Assembly to enact a responsive and responsible financial plan for Fiscal 2008.
