State budget passes in record time

Delaware’s General Assembly passed the fiscal year 2021 budget in record time – five days before the June 30 deadline.

The House passed the $4.55 billion budget June 25 by a vote of 40-1, following similar passage a day earlier by the Senate with a 20-1 vote.

Rep. Rich Collins, R-Millsboro, was the sole no vote in the House because he said he believed too much money was going to the executive branch, and the executive branch has wielded too much power during the COVID-19 shutdown.

“There's no indication when it will ever end,” Collins said.

Sen. Colin Bonini, R-Camden, was the only no vote in the Senate.

While the budget was passed in the Senate June 24, two other spending bills were not. Republicans blocked passage of grant-in-aid and bond bills because many members said they received the spending bills less than an hour before the vote, and they needed more time to review the documents.

“Both the bond bill and the grant-in-aid bill arrived in my inbox yesterday at 2:49 p.m., just 45 minutes before the start of session at 3:30 p.m.,” said Sen. Ernie Lopez, R-Lewes.

Senate Minority Leader Gerald Hocker, R-Ocean View, said he got his at 2:34 p.m.

“As important as these two bills are, it's not fair to our constituents to vote on something we haven't even looked at,” he said.

Sen. Brian Pettyjohn, R-Georgetown, said some of his constituents have been asking about details in the bills, and he needs more time to review the bills before voting on them. The budget bill that passed had been sent out to legislators June 19, he said, giving them days to review it before voting on it.

“I just got this printed out, and I'm on page 15 now,” Pettyjohn said of the 50-page grant-in-aid bill. “Again, this bill was released last minute and there are questions about some of the contents of the bills.”

A three-quarter vote is needed for passage of both the grant-in-aid bill and the bond bill, and with the majority of Republicans not voting, the bills failed.

By law, the General Assembly must approve the final FY2021 budget by Tuesday, June 30, and historically, legislators have passed the spending bills by late evening June 30 or early morning July 1.

The Senate will meet at 3 p.m., Thursday, June 25.

Revenues rise at last minute

Following months of dismal state finances due to the COVID-19 shutdown, the last financial forecast for the state's fiscal year ending June 30 had a slight silver lining with about $78 million more in revenue, but still short of the $4.6 billion budget Gov. John Carney put forth in January. Carney's original budget had about 4 percent growth; the revised version holds growth to 2 percent.

The last-minute extra revenue means state employees such as teachers, police officers and correction officers who have collective bargaining agreements with the state will continue to receive salary increases that come with years of service, and education or training, known as step increases. Those increases had previously been cut during Joint Finance Committee budget hearings but were restored with $27 million in funding. However, 2 percent raises for teachers and state workers proposed earlier in Carney's original budget were cut.

JFC makes cuts

Meeting in early June, the JFC worked on a spending bill that had to shave about $450 million off the fiscal year 2021 budget. They revised the original budget by cutting Carney's three spending initiatives – $50 million for Wilmington schools, $50 million for economic development, and $50 million for clean water, said Rep. Ruth Briggs King, R-Georgetown, a member of the JFC.

Some of the cuts might be backfilled with money from the federal stimulus CARES Act, Briggs King said. “The CARES Act can only be used very specifically,” she said, about money meant to offset revenue losses due to the coronavirus shutdown.

A big change could be made if New Castle County agreed to reimburse the state for unemployment insurance out of the $322 million that the county received from the CARES Act – an amount that exceeds the county's $303 million FY2021 operating budget.

Since Delaware pays unemployment insurance for the entire state, and NCCo has the majority of unemployment claims filed, Briggs King said, it would help with state finances if NCCo repaid $275 million to the unemployment trust fund.

In order to balance the budget, Briggs King said, the committee used about $60 million in reserves from the budget smoothing account, leaving about $100 million in that account. “It proved to be very valuable,” she said. “It helped us make budget this year.”

Grant-in-aid bill

Under the latest estimates, existing grant-in-aid recipients will be able to get the same amount of money they received last year, with paramedics receiving an increase, Briggs King said.

“We are certainly happy to get an increase for paramedics,” she said.

The total grant-in-aid package is $54 million – down $1 million from last year.

Bond bill

The fiscal year 2021 bond bill is about $155 million less than last year's bill – mostly due to less cash available from the general budget, said Sen. Brian Pettyjohn, R-Georgetown.

“Last year's bond bill was huge,” Pettyjohn said, about the $863 million capital budget, the state's largest ever. “It was a lot of one-time money for one-time projects.”

This year's $708 million bond bill was made with $5 million cuts here and there, he said, but many had matching federal funds to help make up the difference. Open space and farmland preservation funding both were cut back from $10 million to $5 million, but will receive matching federal funds.

The Department of Transportation was cut by about $62 million – $363 million opposed to last year's $425 million – but road projects across the state will continue, Pettyjohn said.

“More than half of the bond bill is for transportation,” he said.