Markell to trim programs, raise business taxes to close multimillion-dollar budget gap

Gov. Jack Markell Thursday afternoon unveiled his Fiscal Year 2015 budget proposal, showing he wants to raise some business and franchise taxes and make cuts in established programs to balance a $3.8 billion general fund operating budget. Overall, Markell is proposing approximately $4.3 billion in General Fund spending for the year beginning July 1 and approximately $461 million in bond and capital improvement spending. The plan will take the form of bills that will be introduced in the General Assembly on Jan. 30. The plan includes a pay raise for state employees and just under 0.2 percent in new spending, the governor said, and combined with other factors that require increased spending, represents a 3 percent increase in the FY 2014 operating budget. Markell also earmarked $342.2 million for the state’s transportation trust fund, $45.2 million for grants in aid and $460.9 million in bond and capital improvements. The latter includes $253.5 million in infrastructure enhancements and $207.4 million for transportation projects. The budget proposal reflects ideas outlined in his Jan. 23 State of the State address, Markell told reporters during a Wednesday night press briefing. A number of those priorities include money for reinvigorating downtown areas and for helping former felons successfully return to life outside of prison. State employees will receive a 1 percent pay hike, their first since FY 2013, Markell said. “We are continuing to invest in our people, making it more likely we can attract and retain quality employees,” the governor said Wednesday. “We’re working hard to find a way to make that happen.” Markell has budgeted $18.9 million for public education, reflecting an increase of 220 teacher units throughout the state. That growth has come because more parents are deciding to enroll their children in the public education system rather than private or parochial schools, he said. Lt. Gov. Matt Denn said the $12.9 million Health and Social Services budget includes $1.3 million for a startup nurse/family partnership program that will have registered nurses visiting low income, first time mothers to help them with pre- and post-natal care up through the child’s second birthday. The program is modeled on similar projects in other states that have shown great promise in improving the lives of these children. “It’s really going to get these kids off to a great start,” Denn said. The nurse/family partnership is one of only nine new programs for FY 2015, programs that add up to just over $7.4 million or less than 0.2 percent in additional costs over FY 2014. They include $400 million to improve school security, $265 million for a new firearms investigations unit to help curb gun violence, $250 million for a program of pretrial supervision to help keep minor offenders out of the prison system and $250 million to help juvenile offenders once they are released from rehabilitation. To close a projected $139 million deficit in the general fund operating budget, Markell said the state will realize $33 million in savings by not having to pay for one-time programs that have been discontinued, and cut $56.5 million from the transportation, open space, farmland preservation and energy efficiency programs. The remainder of the deficit will be covered by a $50 increase in the annual tax levied on limited liability companies, limited partnerships and general partnerships, and an increase in the minimum annual corporation franchise tax from $75 to $175. Markell’s capital budget includes several local construction initiatives, to include $92.6 million for school construction throughout the state, including the Capital, Lake Forest and Polytech districts as well as $16.5 million for projects at Delaware State University, Delaware Technical Community College and the University of Delaware. Also included is $4.2 million for library construction, which includes a project in Harrington and $3 million for construction of a new headquarters facility for Delaware State Police Troop 3. House and Senate Republican leaders scheduled a session to respond to Markell’s budget, but after the Dover Post’s press time. However, Senate Minority Whip Sen. Gregory F. Lavelle, R-Sharpley, said he’d had only 20 minutes to review the plan, but was not impressed with that he had seen. “Our economy continues to be extremely slow. We need to think about what to do, from a policy standpoint, to turn that around,” he said. “Fourth-quarter gross domestic product may be up 4.2 percent, but that’s nationally. Locally, we continue to lag the country. Economic growth may be had, Lavelle said, without a spending plan laden with “budget gimmicks and tax increases.” “If our economy was growing at 3 percent a year, we wouldn’t be having this discussion. We’d be talking about what to do with all the money as opposed how to find the money to fund these bare bones programs The entire FY 2015 state budget is posted on the Delaware Office of Management and Budget website at