House & Senate Republicans React to Governor’s Record-Setting Budget Proposals

Posted on 01-30-2023

Submitted by the Republican House Caucus on 1/28/23

On Thursday, Governor John Carney presented his proposed state operating budget, capital budget, and Grants-in-Aid Bill for the new fiscal year that begins July 1st.  

The $5.482 billion state operating budget would be the largest in state history – a 7.4% increase over the one it seeks to succeed.  Among other things, the operating budget pays for the salaries of state employees, and the daily costs of keeping state facilities and vehicles running.  

The proposed $1.289 billion capital budget would be the third-largest ever, eclipsing only the current capital budget and that of the previous fiscal year. Often referred to as the Bond Bill – because a portion of the capital budget is financed with money borrowed through the sale of general obligation bonds – the plan pays for building and maintaining roads, schools, and state facilities. More than half the governor’s capital budget would be paid for with cash, with bond sales accounting for less than 20% of the total.  

The proposed $59.8 million Grants-in-Aid bill is $9.5 million less than the present measure. The GIA gives state money to hundreds of non-profit organizations that perform services or provide amenities to Delawareans. These organizations include libraries, senior centers, fire companies, veterans’ organizations, and historical, cultural, and youth groups.  

The governor’s proposals also call for the passage of a supplemental appropriation bill containing $324.9 million for “one-time” spending items.   

Highlights of the four money bills include:  

  • Increases the state share of teacher pay by 9% and other public education employees pay by 3%. (The state typically pays about 70% of these wages, with the local school districts responsible for the remainder.)
  • Variable pay increase for state workers (3% – 9%), with the lowest wage-earners receiving the highest percentage.
  • Invests $101.5 million in affordable housing programs and incentives. (About 60% of this expenditure is federally funded.)
  • Allocates $194 million for state employee health care and other post-retirement employee benefits.
  • $30 million for mental health services for elementary and middle school students.
  • $191.7 million for public school construction.
  • $60 million for college and university campus improvements.
  • $10 million each for Farmland Preservation and Open Space program purchases
  • Increases “purchase of care” subsidies that pay for childcare services for qualifying Delawareans and expands the eligibility for such assistance.  

House Republican members of the Joint Finance Committee (JFC), the 12-member group charged with reviewing and amending the state operating budget, offered some observations regarding the governor’s spending bills:  

State Rep. Ruth Briggs King:

  • Supports the governor’s proposal to add nearly $19 million to the Budget Stabilization Fund, bringing this budget reserve to $421.5 million.
  • Welcomed the governor’s support of two tax-cut proposals: increasing the standard income tax deduction and the Earned Income Tax Credit. (NOTE: House Republicans sponsored multiple tax reduction bills last session, including bills to create the Delaware Resident Low Income Tax Credit and reduce the financial burden on modest-income Delawareans — none of which were allowed to receive a vote.)
  • “I would have liked to have seen more funding for public safety. We had one of our deadliest years last year for traffic deaths, both pedestrian and auto accidents, and it will take more funding to get the coverage we need to address that.”  

State Rep. Kevin Hensley:

  • Supported the call to increase the level of “purchase of care” (POC) subsidies: “Because reimbursement is at the level that it is, a lot of private childcare providers…have found themselves only being able to accept a limited number of POC kids in order to run a viable business. This would hopefully allow more kids to get care, giving their moms, dads, and guardians greater opportunities to seek employment.” 
  • The 7.4% increase in the state (operating) budget, would make it the largest budget we’ve ever seen. I know the governor reassured us that the funding would be there, but…the sustainability of this rapid increase in revenues is very unlikely to continue. …From a longer-term perspective, I’m concerned that we’re not putting more aside [in budget reserves].”
  • “I’m concerned there was a cut in Grants-in-Aid. The organizations supported by this funding do a fabulous job of providing critical services to Delawareans throughout the state that probably exceeds what the state could do if we did it in-house.”
  • “I was happy to see a significant amount of money designated to improvements in our prison facilities. I think some of these upgrades have been needed for quite some time. It’s an investment in safeguarding the health and safety of both our correctional staff and the prison population.”  

The JFC will take the governor’s recommended FY 2024 state operating budget and Grants-in-Aid Bill, reworking them over the next five months to adjust for changing state revenue estimates and legislative funding priorities. That process will start next week with the opening of five weeks of budget hearings featuring presentations from every state agency.

Click here to access a schedule.