While the election season is in full swing, and what a season it has been, the “nuts and bolts” work of Delaware’s government continues. The work is critical, varied, and impacts all our lives in different ways.
While we may all have our own ideas, pet peeves, and suggestions regarding what state government does and how it does it, all that work is ultimately directed by our state’s operating and capital budgets.
The FY17 operating budget, which runs from July 1, 2016 through June 30, 2017, is $4,089,700,000 ($4.1 billion rounded up). The FY17 capital budget was $501,400,000. The federal government also spends considerable sums in Delaware, but that is a topic for another day. The FY17 budget was up 4.5%, or $176 million, from the FY16 budget.
While the budget gets most of its publicity in June of each year, the process of putting together a budget is a year-long effort that is currently underway. Driven by the Governor, each branch of government is hard at work drafting the FY18 budget (which runs July 1, 2017 – June 30, 2018). Referred to as the Governor’s Recommended Budget, it will be introduced in January.
Delaware’s Controller General assists the General Assembly so as to have some independence from the Executive Branch. As it currently stands, and as reported by the Controller General at a recent meeting of the General Assembly’s Legislative Council, the budget process for FY18 is facing a $300 million deficit vs. FY17.
While it is impossible to have a deficit on a budget that doesn’t exist, and by state constitution we must pass a balanced budget, this is a significant number. It is a combination of lower tax receipts for FY18 vs. FY17 of $167 million and increased expenses of more than $130 million. These expenses are often referred to as “door openers” where the thinking, not shared by all, is that they can’t be avoided. Some of these expenses include Medicaid, school enrollment growth, and healthcare costs.
This $300 million represents 7.3% of the FY17 budget. While tax revenues may increase between now and June, they may also decrease. It does not include items that legislators or others might want to see added to the budget or other expenses that might increase between now and June. The legislative “wish list” changes quite often but can add up to $100 million or more without much effort. Some items that were hoped for last year, but even with 4.5% budget growth were not funded, included tens of millions of dollars for education items like WEIC; millions for new and expanded childcare initiatives; millions for new and expanded Medicaid services; and the list that goes on and on.
My point in raising this now is to inform you that (1) the budget process is well underway; (2) that tax receipts are currently slated to fall vs. last year; (3) that expenses continue to increase; and (4) that the drive for new spending and programs is as strong as ever.
The next DEFAC report on Delaware’s revenue picture will be on December 19, so stay tuned.