Fiscal Year 2007 Budget Proposal by Governor Ruth Ann Minner
January 26, 2006
As we continue to nurture the seeds we have sown for Delaware’s future, we are continuing our strong focus on schools, health, the economy and our environment.
Today, I am pleased to present to the General Assembly and the people of Delaware a proposed general fund budget of $3 billion dollars. As promised, this is a modest increase of 5.69 percent over last year. My capital budget—also known as the bond bill—represents $402.1 million dollars, with $285.6 million dollars appropriated for public education and agency projects and $116.5 million dollars in new authorization for transportation for a total transportation capital program of $364 million dollars.
Education
I will begin by highlighting some of our school spending, starting with the approximately $7 million dollars to continue support of the full-day kindergarten initiative.
This money will expand operations funding for districts with existing available classroom space and I am recommending additional money in the capital budget to continue to fund building costs for those districts that passed referenda for full-day kindergarten last year.
This is an important initiative that will help to build on our children’s foundation for learning, and I am committed to fulfilling our goal to implement full-day kindergarten in all elementary schools by 2008.
My budget also includes $632,400 dollars to fund 10 additional math specialists. We put 22 math specialists in middle schools last year, and while I had hoped to add more than 10 this year, we simply cannot do that and maintain our modest budget growth. But ultimately, we will fully fund this program for all of our middle schools, as we funded reading specialists for all of our elementary schools. These special teachers are assisting students who need help the most and we are already seeing the results of their work.
In fact, we are seeing plenty of good results from all of our educators. Our state test scores are showing steady improvement, our students are performing well nationally, and none of it would be possible without the support of our education community. To help build on that success, I am recommending more than $100 million dollars in capital construction funds and more than $7 million dollars in operating funds, which includes our funding for full-day kindergarten, as well as funds to modernize our school facilities.
I have also included an additional $600,000 for the SEED scholarship program, which offers students the opportunity to pursue a two-year degree at Delaware Technical and Community College or the University of Delaware’s Associate in Arts tuition-free, if they do well in high school and stay out of trouble.
Health and Safety
In the area of health and safety, I am recommending $12.5 million dollars be spent to continue implementing the recommendations of the Delaware Advisory Council on Cancer Incidence and Mortality. That brings our total budget for cancer over the past four years to $40 million dollars.
You know that fighting cancer has been a top priority of my administration. As I said last week in my State of the State address, we have seen our cancer incidence rate decrease four times as much as the nation’s, while our cancer death rate has declined twice as much as the nation’s. The statistics prove that our investments are clearly paying off.
I am proposing that we double our funding—to $2 million dollars this year—to implement the recommendations of our Infant Mortality Task Force. This additional money will increase preconception care for women with a history of poor birth outcomes.
To help continue our success in recruiting and retaining high-paying healthcare jobs, I am recommending we fund more than $3 million dollars to continue the nursing expansion program at the state’s higher education institutions. I urge the General Assembly to help us continue our efforts to solve the nursing shortage that is affecting Delaware, as well as the nation. These jobs—which have an average salary of more than $47,000—are critical to our state.
Funding for our new veterans home is budgeted at $4.5 million dollars. I am particularly proud that this project was initiated during my first term and is now scheduled for completion. We all look forward to the opening ceremony on Delaware Day this year.
We are continuing the trooper expansion initiative I unveiled last year to add approximately 70 new troopers during my second term in office.
This initiative was widely endorsed by the leadership of the General Assembly last spring. Last year, we funded 36 new troopers and with the 8 additional troopers I am recommending at a cost of $676 thousand dollars, we are more than halfway to meeting our goal.
As I said last week, this is not an effort we can undertake in one year or two years, but we are making progress to give our State Police the help they need to get a very difficult job done. Again, I thank the leadership for their support of this critical initiative.
We have also worked diligently to improve our 800 megahertz emergency communications system. This year, I am recommending that we fund $13.7 million dollars to continue our upgrades to this system, which is vital for the safety and efficiency of our state’s emergency and rescue personnel.
Economy
As you know, Delaware’s economy is one of the strongest in the country and I intend to build on that achievement.
I am recommending we fund more than $20 million dollars for three critical initiatives—Year Three of my New Economy Initiative, our strategic fund and vaccine development efforts at the Fraunhofer Center for Molecular Biotechnology.
As in previous years, we will also continue our support of the Riverfront Development Corporation and the Port of Wilmington.
Environment/Livable Delaware
I remain committed to our efforts to maintain and improve Delaware’s quality of life through my Livable Delaware initiative.
That’s why I am proposing continued funding for farmland preservation and open space—both recommended at $10 million dollars. I am also recommending $3.2 million dollars for the Conservation Cost Share program. This program helps landowners by providing funds for the design and installation of systems that protect water supplies and natural resources, while also minimizing the erosion of farmland and the pollution to wildlife habitat.
Door Openers
As in past years, I have highlighted our spending in key areas like schools, health and safety, the environment and our economy.
But some of our largest increases in the state’s operating budget are in areas in which we have to spend more to ensure that we are taking care of our Delawareans through much needed services and programs.
This year, we will spend an additional $59.4 million dollars on Medicaid and additional $10 million dollars to cover the cost of health care for state employees.
Our school enrollment continues to rise, and we will spend an additional $10.6 million dollars this year for new students joining our school systems. This school year alone, our enrollment grew by more than 2,000 students.
I am pleased that I will again be able to recommend a salary increase for state employees, though I hope to be able to work with members of the Joint Finance Committee in the coming months to enhance it. As you know, last year we made significant strides in improving compensation for state employees, with agency employees receiving an average increase of 8 percent.
I have made it a priority to ensure that our lowest paid employees receive a “living wage.” My budget proposals have targeted the largest increases to those workers and have also focused on limiting the cost of healthcare to all employees. I will do that again this year by providing a 3 percent increase for entry-level positions.
The salary policy is $500 or 1 percent, whichever is greater, for state agency employees and 1 percent and steps for our educators for a total cost of $21 million dollars.
It is my sincere hope that if the economic condition improves, that I will be able to recommend additional salary enhancements during the mark-up budget process.
We will also spend an additional $5.2 million dollars on employee pensions, $5.1 million dollars on other post-employment benefits and another $3 million dollars for energy costs.
We have provided funding for our obligations to pensioners’ health benefits. In light of the changes adopted by the Government Accounting Standards Board that will become effective this year, we intend to aggressively provide for these benefits to ensure that Delaware’s fiscal strategy responsibly addresses retiree health care, and that we maintain our state’s strong standing in the financial community.
We call these items “door openers” and they total more than $125 million dollars for the upcoming fiscal year. That makes up the bulk of our total increase in the operating budget growth. Because of these significant, mandated expenses, we have to limit what we can spend on other new or expanded programs.
Another key priority of mine is to continue to work on the cost of health care for the uninsured. This is a problem that we can’t afford to ignore. A lot of work has been done in the past year and a number of proposals are being considered.
Again, if revenues increase significantly, I propose that we consider funds for this type of program in Delaware.
Conclusion
I am recommending a responsive, yet responsible budget, as I promised you last week. By remaining fiscally prudent, we are not only looking out for the people of Delaware, but for the future generations of Delawareans.
I would like 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 dedicated efforts to serve the people of Delaware.
I will look forward to discussing my proposed budget with members of the Joint Finance Committee in the weeks ahead.
