Gov. John Carney’s spending plan released Thursday includes raises for state workers, an increase in early education funding and the state’s largest investment ever into affordable housing.
The budget for the fiscal year, which begins July 1, is based on a $5.48 billion operating budget, which is about a 7.4% growth from the previous year. Nearly $1.3 billion will go toward the bond bill, as well as $60 million for grant-in-aid. The state will set aside $325 million for a “one-time supplemental bill.”
The governor will set aside $18.9 million into the state’s budget stabilization fund, which increases the total to $421.5 million. This money acts as a state piggy bank, allowing Delaware to tap into it when revenue is down.
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It’s now up to the Delaware General Assembly to figure out how to spend this money. In the coming weeks, state agencies will go before the powerful Joint Finance Committee to explain these proposals and ask for more funding. It’s these lawmakers who then write the state budget based on the governor’s suggestions.
The General Assembly has to pass the budget by June 30. In recent years, there’s been relatively little drama among lawmakers.
Here’s what’s inside the governor’s proposal:
‘Historic’ wage increases for state workers
One of the major tenants of the governor’s budget recommendation is to increase state worker salaries, particularly for teachers.
The state, which is the largest employer in Delaware, plans to spend $147.9 million on wages. This includes a 9% pay increase for Delaware teachers and a 3 to 9 percent increase for other state employees. The lowest-paid workers will receive the highest raises, the governor said.
Delaware will also establish a $15 minimum wage for full-time state employees, beating the deadline of 2025 for all industries set by previous legislation.
Carney has repeatedly remarked how the state government is losing employees to companies like Amazon and Wawa, which entice workers with higher salaries and better benefits.
“That’s the kind of competition that we find ourselves in,” he said.
A tax relief with hopes of getting more people back to work
Carney outlined a tax policy that he hopes will address one of the state’s most pressing challenges: Incentivizing people to work.
Delaware businesses have a whopping 37,000 job openings, which is a number Carney said he has never seen in his decades of working in government.
The tax policy aims to help middle-class Delawareans pay fewer taxes by increasing the standard deduction to $5,700, which is an increase of 75%. It would be $11,400 for those filing jointly. This would go into effect in the upcoming tax year.
The idea, Carney said, is that it will be more beneficial to people who are going back to work or moving up to a higher-paying job.
Finance secretary Rick Geisenberger said this will start showing up in people’s paychecks in 2024. The state plans to also increase the refundable earned income tax credit, which Geisenberger says will help lower-income Delawareans with children.
Massive spending into early education, as children begin to fall behind
As Delaware children continue to fall behind in reading and math proficiency, the state plans to invest more in early education.
Carney remarked that when he was lieutenant governor in the early 2000s, the state was “not spending any money” in this area, other than for kindergarten and programs for children with disabilities.
Now, the state is spending close to $150 million.
The state seeks to double the funding for the Early Childhood Assistance Program, which helps children ages 3 and 4 years old, to about $12 million. Pending legislation, which Carney supports, would also decrease special education student-teacher ratios for preschoolers.
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The budget also includes an increase to the purchase of care rate. This is an early childhood and after-school education subsidy for about 15,000 children who, right now, live within 200% of the federal poverty limits. The state also plans to expand the eligibility.
This money is more for workforce support than it is early education, Carney said. The hope is by increasing the rate, the facility will be able to hire more people, allowing them to care for a greater number of children.
But the issue the state finds itself in is having little oversight on how owners of these facilities are using this money. Delaware, as of now, doesn’t receive any financial reports.
“It drives me crazy,” Carney said.
“If you can’t read proficiently at third grade, what’s going to happen the rest of your life?” the governor also said. “You’re going to struggle.”
“Early education prior to kindergarten, which is mandatory in Delaware, ought to help us with that. And I’d like to see accountable results there, frankly.”
Largest investment into affordable housing – ever
The governor’s spending plan includes $101.5 million for affordable housing, an issue touching every corner of the state.
About $31.5 million will be for housing initiatives, pairing it with $60 million in federal funding. Another $10 million will come from capital budget housing initiatives.
The state money will go toward loans for the redevelopment of vacant or blighted properties. Money will also be spent on a “preservation fund” to help affordable housing units with repairs and rehabilitation.
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Affordable housing will also be a significant focus for the legislature. Carney said he supports legislation that gives tenants a right to representation during eviction hearings, as well as a bill that would allow tenants to enact rent escrow when they face dangerous living conditions.
The administration also backs a fund that will help reimburse landlords for certain claims.
Funding continues for clean water
Carney’s recommended budget would spend $53.7 million on the environment, with much of the money going toward clean water.
More than $26 million will go to clean water, in addition to the $53 million in federal funding. Ten million dollars will each go to farmland and open space preservation. About $7.5 million will go to protecting shoreline and waterways.
