Legislators seek changes to budget process

A bill that would change Delaware's Constitution to restrict spending and save money to offset future budget shortfalls was introduced June 12. House Bill 460 is the outcome of recent recommendations by a panel which convened earlier this year and was created by legislators and Gov. John Carney to update Delaware’s budget process and minimize revenue fluctuations that impact funding.

Throughout the year, Carney has stressed the need for budget solutions to prevent shortfalls and last-minute budget cuts that occurred at the end of last year's legislative session.

“We’ve been focused since taking office on addressing our long-term challenges, on responsibly investing one-time revenue, and on making sure we don’t spend beyond our means,” Carney said in a statement supporting the bill. “This will require a long-term commitment, and this constitutional amendment will help ensure our commitment to making responsible, long-term decisions about our finances.”

Although a budget surplus this year has eased some constraints, State Treasurer Ken Simpler said Delaware’s fiscal system should be fixed.

“HB 460 reforms 40-year-old fiscal practices and policies that are failing to meet the needs of our citizens in a manner that is certain, sustainable and sufficient,” Simpler said in a statement.

The bill includes new spending controls and the creation of a budget stabilization fund – a new reserve account replacing the budget reserve account. The Delaware Economic and Financial Advisory Council on Potential Fiscal Controls and Budget Smoothing Mechanisms recommended establishing a benchmark index that would limit the amount of money appropriated each year based on Delaware personal income growth, state population growth and other revenue growth. A three-fifths vote by each house of the General Assembly would be needed to change the index.

As a constitutional amendment, the bill would become law only after a two-thirds vote of both House and Senate in two consecutive General Assemblies. Failure to take up the legislation in the current session would delay any potential reform until 2021 or later.

“With the current General Assembly adjourning on June 30, our window of opportunity is limited to a few weeks,” said Simpler. “We owe it to Delawareans to act now.”