FEBRUARY 2007

Governor Minner’s 2008 Budget

Budgets set priorities and Governor Minner’s FY 2008 Budget, which she has presented to the General Assembly, is definitely reflective of her priorities.  At the top of her agenda, as it has been from the beginning of her administration, is education.  Close behind are health, the economy, the environment, safety, and transportation.

Before the Governor can address these priorities, however, the State must fund mandates, such as an additional $38.3 million for Medicaid, $40 million for the OPEB (Other Post Employment Benefits) requirement, $9.6 million just for increases in public school enrollment, and $6.5 for State pension programs.

Undergirding both these mandates and her policy choices, are Governor Minner’s key financial principles:  preserving core State government services; building a sustainable financial plan; bolstering capital investments with pay-go funding; aggressively containing costs; addressing future liabilities; and maintaining reserves.  Guided by these principles, the Governor has proposed a FY 08 General Fund Operating Budget of $3,248.7 million, Bond and Capital Improvement Act of $554.8 million (including $224.6 million for State Capital Projects and $330.2 million for Transportation Authorizations), and Grants-In-Aid of $54.6 million.  Her priorities include:

Education

• Full-day Kindergarten-$6 million in new funding; $13.6 million total
• Math Specialists in every middle school-$702,300 new funding; $2.7 total
• SEED Scholarships-$1 million new funding; $2.4 total
• School construction/renovation-$98.2 million
• Support of Vision 2015-$3.9
• Public School Transportation-$3.5 million
• Public Education Fitness Challenge Grants-$250,000

Health

• Delaware Healthy Life Fund - Funded by income from a $.55 increase in the cigarette tax, the Delaware Healthy Life Fund would improve the State’s comprehensive system of healthcare services and address health needs of Delaware’s most at-risk population, including:
  • Uninsured/Underinsured Initiatives-$5 million
  • Delaware Healthy Children Program (CHIPS) Expansion-$1.1 million
  • Health Disparities-$1 million
  • Delaware Health Information Network (DHIN)-$3 million
  • Nursing Expansion Programs-$3.2 million
  • Medicaid Buy-in Program-$223,700
  • Medicaid Caseload Increases-$28.4 million
• Cancer Council Recommendations-$16.2 million
• Veterans Home Operations-$9.9 million
• Infant Mortality Task Force-$1.9 million new; $4.6 million total
• Developmental Disabilities Services-$4.8 million

Economy

• Strategic Fund-$12 million
• New Economy Initiative, Year Four-$5 million
• Diamond State Port Corporation-$3 million
• Riverfront Development Corporation-$2 million
• Fraunhofer Vaccine Development-$1 million
• Crop Insurance-$600,000

Environment

• Farmland Preservation-$10 million
• Open Space-$10 million
• Dam Emergency Planning Fund-$1 million
• Forestland Preservation Program-$1 million
• Beach Preservation-$5 million

Safety

• Juvenile Justice Reform-$4 million
• 800 MHz Emergency Radio System-$12.7
• Trooper Expansion-$465,200 and 6.0 FTEs (all funds)
• Pilot Prison Re-entry Program-$75,000

Transportation

• Preserve $220 million in federal funds by ensuring adequate State match
• Preserve $14.4 million in federal revenue by passing Open Container Legislation
• Provide Systemic Revenue Correction to Adequately Fund the Transportation Trust Fund
  •    Motor Fuel Tax increase of $.05/gallon (FY 08)
  •    Documentation Fee increase of 1.25% (FY 08) and .5% (FY 09)
  •    Eliminate 10 p.m.-6 a.m. commercial EZ-Pass discount on I-95 (FY 08)
  •    Eliminate all SR 1 EZ-Pass discounts (FY 08)
  •    Raise Tolls at Biddles/Dover by $1.00, Boyds/Denny $.50, and Smyrna $.25 (FY 09)
  •    Vehicle Registration increase by 50% (FY 08)

Perspective on Transportation Revenue:

• Delaware’s current Motor Fuel Tax is $.23 (compared with Pennsylvania at $31.2 and Maryland at $23.5) and was last increased in 1995.
• Delaware’s current Documentation Fee is 2.75% (Pennsylvania at 6% and Maryland at 5%) and was last increased in 1993.
• Delaware’s current Registration is $20 (Pennsylvania $36; Maryland $64) and was last increased in 1965.

DEFAC’s December 18, 2006 FY 2008 revenue estimate of $3,367.8 million comes from Personal Income Tax at 32.9%, Incorporation Revenue 21.1%, Abandoned Property 8.7%, Lottery 7.1%, Corporate Income Tax 5.3%, Gross Receipts Tax 5.2%, Bank Franchise Tax 4.3%, Realty Tax 2.7%, Public Utility Tax 1.4%, Other Tax Revenue 4.2% and Other Non-Tax Revenue 7.1%.  The Governor’s $3,248.7 million Recommended Operating Budget allocates funds to Public Education at 34.1%, Health & Social Services 27.3%, Corrections 7.5%, Higher Education 7.4%, Services for Children, Youth and Their Families 4%, Safety/Homeland Security 3.8%, Judicial 2.7%, All Others (including one-time items) 13.2%.

Beverley Baxter