Gov Carney Presents State of the State

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On Wednesday, February 12, Governor John Carney held a town hall meeting at Carlisle Fire Company to present residents with a State of the State update. Carney’s comments indicate that the economy in Delaware is strong but there is still room for improvement.

“We have a strong and growing economy,” Governor Carney said. “There are 20,000 more people who go to work every day in Delaware than just three years ago. That can summarize the difference right there. More people are going to work, making money, paying taxes so instead of looking at a $400 million deficit, we are now looking at as much as a $200 million surplus with $161 million in reserves that is available for the next time there is a slow down in the economy. Much of this was developed by the Delaware Economic and Advisory Council, a bipartisan group that came up with a smarter way of budgeting for the state.”

Graduation rates are up in the state as well, Governor Carney explained, especially for lower-income students and those who are English-language learners compared to ten years ago. Delaware also has one of the most successful farmland and agricultural preservation program in the country, putting $20 million toward farmland preservation in this year’s budget alone. Enrollment in the Affordable Care Act (ACA) marketplace plans has gone up by 6 percent in Delaware and rates were lowered by 20 percent this year. In other states, Governor Carney explained that enrollment rates are dropping, a situation that is not occurring in Delaware because the state used a creative way to work with the insurance companies that allowed rates to drop. The state is seeking a Medicaid waiver in an effort to reduce rates even more.

“We are in a much better fiscal situation than we were three years again when everyone in this room wanted to know how we would meet a budget deficit,” Governor Carney said. “For the last 40 years, since Governor duPont, the Delaware constitution requires that we have 2 percent of our total budget placed in a rainy day fund. However, that amendment does not allow us to touch that money. Based on our current budget, that is $250 billion in a rainy day fund we cannot touch. It has rained a lot in Delaware over the past 40 years, but still that money cannot be touched. Last year, I proposed a constitutional amendment that would give us access to those funds but we did not take that route. Instead, we created a $161 billion reserve fund in addition to the rainy day fund. Instead of using our old rules that had us funding the government, we established a budget growth rate of 4 percent. Any revenue we have over 4 percent is not plugged into the operating budget. We use it to fund special projects like farmland preservation or waste and wastewater systems. This is a much different method for budgeting than in the past so we hope we are not here next year wringing our hands about a shortfall.”

Governor Carney talked about a gentleman who was at a Milford town hall meeting three years ago who told him he did not mind a small tax increase if the Governor would simply make government run more efficiently and more effectively. Governor Carney explained that the Government Efficiency and Accountability Review (GEAR) was established to do just that. The group looks at all kinds of ways that the state can run more efficiently and economically.

“There is a huge mismatch between jobs that are available, whether it is a welder, electrician, plumber, scientist or IT personnel, and people who are trained to do those jobs,” Governor Carney said. “There are a lot of job openings but not enough people with the skills to do the job. If we want to attract business, we need a properly trained workforce. Our goals are to have every child reading on grade level by third grade and on math grade level by middle school. We don’t talk enough about the trade side of employment and we need to do that as well.” Governor Carney also pointed out that young people are not just looking for a job but are also seeking locations that have unique fun things to do, which is why the state has implemented programs like the Downtown Development District.

Farming has changed significantly over the years, Governor Carney stated, asking if anyone in the room had been on a combine lately.

“A combine is a sophisticated piece of computerized equipment today,” Governor Carney said. “They drive themselves now. I’ve been on one, I don’t know a darn thing about them, but I have been on one. They need high speed broadband internet to perform the functions they need to do adequately. We have areas in Sussex and Kent County where there are voids in internet service. We need to address that and we are working with contractors to bring that about.”

Overall, Governor Carney sees a growing, thriving economy in Delaware but knows that much more work must be done to continue on this upward movement.

 

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