By Terry Rogers
On Wednesday, March 8, Governor John Carney held a Town Hall Meeting at Carlisle Fire Company in order to get public input regarding the upcoming budget. Delaware currently faces a budget shortfall of $350,027,700. Senator Gary Simpson, who hosted the Town Hall, opened the meeting by telling those in attendance that the proposed budget submitted by outgoing Governor Jack Markell could be “thrown out,” gaining applause from some in the audience.
“Governor Carney is starting from scratch,” Senator Simpson said. “The deficit looks bad. There is no question $350 million is a lot of money. But, we have faced worse. When Governor Markell took office, we had a deficit of over $800 million. We worked together and were able to balance the budget that year. We will do it again this year, but we need your input.”
Governor Carney explained that the key words when talking about the budget were “expected” revenue and expenses. He explained that the revenues and expenses were predicted by experts with the Delaware Economic and Financial Advisory Council (DEFAC). He also explained that, because the numbers were estimates, they could actually be higher or lower than predicted.
“When the economy improves, revenues can grow, which means we have more income for the State than expected,” Governor Carney explained. “But if the economy goes down, revenues can also go down, so we try to make these estimates as accurate as possible.”
One area where the State budget has grown is in education. Student enrollment has increased significantly over the past ten years. In 2008, there were just under 125,000 students enrolled in Delaware public schools. In 2016, that number rose to almost 137,000. This has led to a need for more public school employees, adding to the State’s budget expenditures. Medicaid has also increased the budget for the State, growing from just under $176,250 in 2010 to almost $235,000 in 2017.
“We do have something going for us here in Delaware,” Governor Markell said. “Corporations. We make it very easy for companies to incorporate here and those revenues are critical to our budget. Without the corporate taxes we collect, we would have to have a sales tax of between eight and nine percent. Therefore, we need to balance our cuts carefully. We don’t want corporations to go elsewhere because our taxes and fees are too high but we need to make sure our residents are not shouldering the burden. Strong economic growth is the best solution to our budget issues. We also can’t cut things that companies look for when they locate in a particular state. Healthcare and education are critical factors that help a company decide to build or expand in an area.”
It was suggested to the governor by one attendee that he get “DelDOT and DNREC under control.” Many businesses complain that the delays from the two agencies are one reason businesses choose to locate in another area. Governor Carney agreed that businesses who want to expand or build want to do so as quickly as possible. He stated that permitting delays must be addressed as well as the fees charged to companies who are considering locating in Delaware.
Governor Carney discussed the growth in public school enrollment, saying that some of the growth may be due to private schools closing as parents can no longer afford the tuition for private schools. There was a suggestion that the technical high schools, which are currently full-time high schools, be returned to what they were originally designed to do – teach students a trade.
“I do agree that this is a problem,” Governor Carney said. “Now that the tech schools offer college prep classes, students who don’t need college but want to enter a trade are denied entrance. This means that schools like Milford now have to create their own trade programs. That does not make much sense. Unfortunately, the economy now requires that even students who learn a trade need some college-level background. We need to get to a place where every student who graduates is either career or college ready. More than half are not planning to go to college after high school and we need to do a better job of preparing them for the workplace.” Governor Carney said that the state needs to invest in education to make the state competitive for business. He also said that learning occurs at home and in the classroom and that the State did a pretty good job with students who have strong support at home, but not quite as good a job with children who do not have that support. He stated that he wants to see improvement in that area as well.
One attendee asked if there was any discussion about consolidating school districts in an effort to save money, saying that research showed there could be significant savings if smaller districts, such as Seaford, Laurel and Delmar, were combined into one. Governor Carney said that although there may be some upfront savings in combining districts, he did not believe there would be long-term savings and that it may not be worth the political fight that would ensue to make it happen. He also said it could not be done before July, so it would have little impact on the budget for next year.
Governor Carney stated that he believed economic development as well as education improvements were a way to address rising Medicaid costs.
“As people are able to find jobs and return to work, fewer will need to rely in government subsidies for basic care,” Governor Carney said. “We have jobs out there, but employers are telling us they can’t find qualified people for those jobs. We need to address that and we have started through our Pathways program. We made some changes to the Medicare system in the 1990s to make it more advantageous for people to return to work. Many people were not working because they would lose their healthcare. By changing the qualifications so people could remain on the program for a short time after obtaining a job, we found more people were returning to work and phasing out of the system. We need to do more of that.”
Opioid abuse was another issue discussed and the Governor said that there were departments working on addressing the growing use of opioids in Delaware. He pointed to better prescribing regulations as one of the ways that he felt the issue could be addressed. He also felt increased use of medical marijuana may reduce the dependency on other types of pain medications that may lead to addiction. One attendee suggested legalizing marijuana as a way to manage the budget deficit, citing Colorado as an example of how it could work. They said that it would be discretionary income and not an imposed tax if cannabis was legalized and taxed.
“This has come up at other town hall meetings,” Governor Carney said. “I am not ready to do it, but I think it needs to be thoroughly discussed. There are problems in Colorado and before we take those steps here in Delaware, we need to make sure we don’t create the same issues. Therefore, I plan to hold separate town hall meetings on this subject. We still don’t have our medical marijuana program up and running. I don’t think we are ready yet to jump into legalization.”
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