Central Delaware

Markell proposes 1 percent pay increase for state workers

DOVER — By reallocating money and raising corporation taxes, Gov. Jack Markell proposed a balanced budget for Fiscal Year 2015 that gives state workers a 1 percent salary increase and funds $7.4 million in new programs.

The $3.83 billion operating budget, which begins July 1, is 3 percent higher than last year.

Pay increases for state workers would cost $15.6 million and be given to every state worker from entry-level employees to cabinet secretaries.

“We think it’s important to continue to retain and attract high-quality state employees and we want to make sure we have a compensation package that’s as competitive as it can be,” Gov. Markell said. “It’s something we’ve wanted to do. One percent is really not a ton, but it’s a step in the right direction,” he said.

His budget proposal includes:

•A capital budget of $461 million, about $37 million higher than the one he proposed last year.

•$93 million for school construction and renovation

•$7 million for the proposed downtown development grants

•$3 million for the new State Police Troop 3 in Camden.

•$24 million for Medicaid costs, which is mandatory under the state-federal partnership

•$45 million in grants to nonprofit groups and community agencies, slightly higher than the $43 million he proposed last year.

With increased enrollment in Delaware’s public schools, education costs have risen. The budget doubles the funding for public education staffing and increases transportation costs, allocating more than $22 million for projected growth.

“We had an influx on kids, then that triggers more jobs because you need teachers to teach the kids that show up,” state Education Secretary Mark Murphy said, noting that twice as many children enrolled in Delaware’s public schools this year.

Gov. Markell said Wednesday, “More and more families are choosing to send their children to the public schools than the parochial and independent schools.”

Some of his new initiatives focus on continuing to improve Delaware’s public schools and child development.

Budget Director Ann Visalli characterized the cost of the $7.4 million new initiatives as “minimal,” representing a 0.199 percent growth in the operating budget, for the crowd, which included about 15 Delaware Republicans scattered throughout the room.

The proposed budget released Thursday puts dollar figures on the initiatives Gov. Markell outlined in his State of the State last week. Those include: $2 million for increased services to help individuals with drug addictions, $250,000 for at-risk youth re-entry services following juvenile delinquency, and $265,300 to fund a new division in the Delaware Department of Safety and Homeland Security with a concentrated effort on gun trafficking.

In order to fund the expenses, the governor has proposed more than $15 million in cuts to Open Space and Farmland Preservation programs in addition to slicing the Transportation Trust Fund’s supply of escheat revenue by $40 million and adding it to the state’s general fund.

“That has been nothing more than a patch,” Gov. Markell said of the escheat revenue, which comes from abandoned property receipts.

That revenue, he added, has been “incredibly inconsistent” for the Transportation Trust Fund, which supports the Delaware Department of Transportation’s operating and capital projects.

“That’s no way to balance the budget,” he said.

In addition to the cuts, he proposed an increase to the annual tax on limited liability companies and business partnerships from $250 to $300 and an increase to the minimum annual corporation franchise tax from $75 to $175 to generate $51 million in new revenue.

Secretary of State Jeffrey Bullock said those taxes affect businesses not located in Delaware. “They would be exported taxes that will not be paid by Delaware companies,” he said.

The governor’s fiscal plan does not factor in the administration’s proposal to bolster the Transportation Trust Fund by hiking the state’s 23-cent gas tax 10 cents and mandating $50 million in additional borrowing to add $100 million to the fund’s dwindling revenue. Overall, the transportation proposal is projected to generate $500 million in revenue over the next five years.

The governor did not discuss funding for his initiative, Clean Water for Delaware’s Future, which he touted in State of the State one week ago. He said those plans would be explained in coming weeks.

“In our view, this is a financially responsible budget,” Gov. Markell said before unveiling the plan to state lawmakers.

This story contains information from the Associated Press.

Staff writer Jen Rini can be reached at 741-8250 or Follow DSNJen_Rini on Twitter.