Legislators Pass Balanced Budget

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Senator Gary Simpson at Legislative Hall during this year’s budget deliberations.

By Terry Rogers

In the early morning hours of July 1, 2015, Delaware legislators passed a balanced budget for Fiscal Year 2016 of $3.9 billion, an increase of just under three percent from 2015. Two key components that will have a direct impact on Milford, which were initially cut, were restored during the marathon session that ran through the night on Wednesday.

Initially, Governor Jack Markell recommended $3 million for the Municipal Street Aid fund, which is used by Milford for street and road repair. When the budget was presented by General Assembly Democrats, this fund was cut completely. Joe Fulgham, a staff member with the State House of Representatives’ Minority Caucus, said that General Assembly Republicans argued that towns and cities relied on the funding and that it needed to be returned. The final budget includes $5 million for the street aid fund. In addition, the initial budget presented by the Governor completely removed Community Transportation Funds which each lawmaker uses for transportation, drainage and other eligible projects within their district. This fund was also restored to the relief of municipalities throughout the state.

“It was a long, long night, but fortunately compromises were hashed out which enabled us to balance the budget and leave town without too many hurt feelings,” said the State Senator Gary Simpson. “Communities will now receive financial funding for street repairs and other transportation related needs. Many of the non-profits in Milford and our school district will also receive funding to help balance their financial budgets.” The week prior to the budget, some lawmakers were threatening to cut the county and municipal realty transfer tax, money used in Milford to fund the police department.

Senator Simpson said that he was glad that the threat never came to fruition, mostly because lawmakers were “inundated with calls from their local governments who let them know in no uncertain terms they were displeased with the loss of that revenue source.” State Representative Harvey Kenton agreed with Senator Simpson.

“The proposal for the state to take a larger portion of the transfer tax revenue would have taken effect July 2016 at the start of the next fiscal year,” Representative Kenton, who sits on the Joint Finance Committee, said. “That action proved very unpopular because it would have cut by a third the money they receive from this revenue source – forcing them to potentially choose between service cuts or increased taxes. Facing that reality, county and municipal officials made it clear they wanted to maintain the status quo and legislators heard them loud and clear. Real estate agents also lobbied against any change to the existing formula.”

One concession made by the Governor’s office was an agreement to look at Prevailing Wage. According to Senator Simpson, part of the negotiation between the General Assembly and the Governor’s office was in regard to the infrastructure package dealing with changes to prevailing wage, both in the amount of the cost of road projects before prevailing wage was allowed to kick in as well as how the prevailing wage formula is set.

“While prevailing wage is a difficult subject to understand without going into a long discourse, the thing to remember is that with the changes that were just enacted, many of our public works projects and transportation projects should end up costing us between 20 and 25 percent less,” Senator Simpson said. “This not only saves money for our communities, but stretches our dollars further, and hopefully, putting more people back to work.” Prevailing wages are an hourly wage that include benefits and overtime paid to the majority of workers, laborers or mechanics within a particular area. Many legislators believe that prevailing wage hurts free market competition and causes escalated costs for public projects, such as roads, bridges and schools. This is because prevailing wage is often based on union wages in an area rather than on average wages.

Another project that received funding in the new budget is for an overpass at Northeast Front Street and Route 1, a project that residents of Woods Haven have fought for due to safety concerns for years.

“The Northeast Front Street-Route 1 overpass has been appropriated nearly $2.8 million in the new Bond Bill,” said Representative Jack Peterman, who supports the project. “I was really gratified to see money included for this needed project, especially in such a difficult budget year. The people living in and around Woods Haven need a way to safely cross the highway and this funding is a significant, tangible sign that this work is moving ahead.” In addition, the FY 2016 Bond Bill also has almost $3.25 million earmarked for the development of the Kent County Regional Sports Complex which will be located just north of Milford.

Senator Simpson said that he was very pleased that Governor Markell had personally committed to him that there would be a high-level task force created to review spending in the state, something Senator Simpson has been requesting for the past few years.

“I’m not talking nickel and dime issues, but rather major policy shifts that might result in meaningful efficiencies around such things as our energy policy, how we fund pensions, how we can save money in our Medicaid program, how we contract for state purchases, etc.,” Senator Simpson said. “I’m very hopeful that such a review will put Delaware on a face-forward approach to how we conduct the business of our state.”