The Committee of 100 | Meeting Notes

It's all about the economy. Despite the furor over the Clean Indoor Air Act and Jane Brady's enforcement initiative of a 24-hour waiting period, the biggest issues remain the state of the economy and the loss of jobs and revenue in Delaware.

Delaware's revenue shortfall is serious enough for Governor Ruth Ann Minner to present her Fiscal Year 2004 Budget in a special session of the General Assembly. Because the Delaware Economic and Financial Advisory Council (DEFAC) has projected a $300 million gap between projected revenues and expenditures for FY04, there will be tough decisions ahead. Options are narrowed by mandated costs, such as Medicaid, and by DEFAC's projection that FY05 revenues will be lower than this year's budget. After already cutting $200 million from the budget since taking office, the Governor is faced with cutting even more.

The good news is that Delaware is in better shape than most other states. In other states, prisoners are being released, infrastructure projects are being halted, school days are being slashed, Medicaid benefits are being reduced, and jobs are being cut.

Governor Minner's goal is a FY04 Budget that is balanced and sustainable into FY05 and beyond without cutting essential services. To do that, she has proposed $155 million in program cuts and $145 million in new revenue, including a 17% increase in franchise tax; a 264 increase in cigarette tax; decoupling from the federal elimination of estate tax; and expanding hours and lottery machines, with the State taking a larger share of the increased revenues.

In addition, the Governor proposed moving the Division of Motor Vehicles into DelDOT, thereby transferring $9.7 from the Transportation Trust Fund into the General Fund, leaving less for transportation investments.

Governor Ruth Ann Minner will discuss the state of the state, the budget challenges, and economic development in Delaware.