Delaware state budget
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Delaware closed July 1, 2009 an $800 million shortfall for FY 2010 by passing a budget smaller than FY 2009, cutting spending more than raising taxes, and setting appropriations at 98% of revenues. The 2% margin is set aside for a “rainy day fund.”[1]
The Delaware General Assembly passed and Gov. Jack Markell signed a FY 2010 budget with $3.1907 billion in revenues and $3.1269 billion in appropriations. The budget reserve was $186.4 million as of August 15, 2009. Delaware saw a reduction in revenue projections by $303.6 million for FY 2009 and $648.4 million for FY 2010 before adopting its final budget. Delaware's top 3 revenue sources are 31.8% Personal Income Tax, 28.2% Corporate Franchise Tax & Fees, and 10.1% State Lottery. The state's top 3 General Fund appropriations are 36.3% Public Education, 30.5% Health & Family Welfare, and 16.5% Corrections.[2]
FY 2010 budget is a 5.1% decrease from FY 2009. The FY 2009 General Fund was $3.363 billion, a 2.35% increase over FY 2008.[3]
Business Wire reported October 5, 2009, "The state addressed revenue shortfalls during FY 2009 totaling $215 million as the forecast was repeatedly lowered over the course of the year. To match spending to the lowered revenues, the governor instituted a statewide hiring freeze and announced midyear budget reductions of 7% for all state agencies, excluding schools and higher education."[4]
[edit] Budget Background
Delaware's fiscal year begins July 1 and ends June 30 of the following year. The state budget process begins in September when the budget office requests that each department in state government submit budget requests for the next year's budget. These requests are generally presented to the State Budget Office at public hearings held in October and November. Between November and January the Governor compiles a recommended budget which is then presented to both the House and the Senate in January.
According to the State Constitution, the Governor must present a budget which is balanced at 98 percent of the state's projected revenues. The Delaware Financial and Economic Advisory Council is charged with making revenue projections, which are made in September, December, March, April, May and June. The Governor's budget is assigned to the Joint Finance Committee. The budget bill is typically introduced and voted on during the last week in June, just before the General Assembly adjourns. [5]
[edit] Budget figures
| Fiscal Year | General Funds Expenditures | % Change from Previous Year |
|---|---|---|
| 2003 | $2,454,100,000[6] | --% |
| 2004 | $2,553,700,000[7] | 4.0%[7] |
| 2005 | $2,822,300,000[8] | 10.5%[8] |
| 2006 | $3,180,500,000[9] | 12.7%[9] |
| 2007 | $3,389,900,000[10] | 6.6%[10] |
| 2008 | $3,421,600,000[11] | 0.9%[11] |
See Delaware state budget (2008-2009) for more information.
[edit] Accounting Principles
The Delaware State Auditor since 1989 is R. Thomas Wagner, Jr.. Audit reports are published online.[12]
Russell T. Larson is the Controller General. The Controller General reports directly to the Legislative Council, a joint committee comprised of the leaders of both houses of the Legislature.[13]
The country's three major bond-rating agencies have affirmed Delaware's triple-A ratings based, in part, on the state's strong fiscal management practices. The agencies specifically cited state officials' decisions to appropriate only 98% of available revenue for the fiscal 2010 budget, which allows for a cushion if revenues fall, and the decision to maintain the Rainy Day Fund. The agencies also praised the Delaware Economic and Financial Advisory Council for its revenue forecasts.[14]
| Credit Rating | Fitch | Moody's | S&P |
| Delaware[15] | AAA | Aaa | AAA |
The Institute for Truth in Accounting (IFTA) rates Delaware “Tardy” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA does not consider Delaware’s CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[16] Delaware's Division of Accounting is responsible for filing the CAFR.[17]
[edit] Economic Stimulus Package
Delaware is expected to receive $802 million, not counting the tens of millions in tax cuts, increased unemployment benefits, student grants and other initiatives, of the $787 billion dollar economic stimulus package. [18] According to White House officials the package is expected to create approximately 59,000 jobs. [19]
For more information on how the federal stimulus funds are being used in the state of Delaware, visit the state recovery website.
According to preliminary reports Delaware is expected to receive:
- $3.6 million for mandatory transportation enhancements [20]
- $21.7 million for urban areas [20]
- $11.7 million for suburban areas [20]
- $3.2 million for rural areas [20]
- $81.6 million for transportation [20]
- $11 million for state and local law enforcement agencies [21]
- $38 million to make homes and businesses more energy efficient [22]
[edit] Budget transparency
Delaware currently has no statewide, official spending database online, despite multiple, recent attempts to pass legislation which would require such transparency. However, in May 2009, Governor Jack Markell announced that, by July 30, 2009, citizens will be able to see the state's expenditures online in a searchable database. Said Markell, "During these historically challenging financial times, it is critical Delawareans are confident their state tax dollars are being spent as effectively and efficiently as possible."[23] Sign up here to learn more about Delaware's transparency.
The Caesar Rodney Institute recently launched an independent government spending transparency website, DelawareSpends.com, which allows users to search state employee payrolls and vendor payments. Visitors to the site can also post their own data, thoughts, questions, and concerns on the DelawareSpends Forum.
[edit] Economic Stimulus Transparency
- The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.[24]
- It is estimated that Delaware will receive at least $502 million in federal funding.[25]
- The economic recovery website for Delaware is available here.
[edit] Error in ARRP
On November 16 and 17, 2009, many errors were found in the $747 billion plan that showed the plan set aside money for districts that do not exist. According to Recovery.gov, the plan shows its funds will go to 884 Congressional Districts, though there are only 435.[26][27]
Delaware’s congressional representation rose by 4, according to ARRP's tracking website, as $10 million dollars was pumped into 4 congressional districts that did not exist.[28]
[edit] Legislation
None.
[edit] Government tools
The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:
| State Database | Searchability | Grants | Contracts | Line Item Expenditures | Dept/Agency Budgets | Public Employee Salary | Exemption Level |
|---|---|---|---|---|---|---|---|
| None | n/a | n/a | n/a | n/a | n/a | n/a | n/a |
[edit] Limitations and Suggestions
[edit] Support for creation of the database
The National Taxpayers Union urged legislators in Delaware to support SB 184, which would have created a state spending transparency website.[29]
[edit] Independent transparency sites
None.
[edit] Public employee salary information
None.
[edit] See Also
Delaware taxpayer-funded lobbying
[edit] External links
- Model transparency legislation from the American Legislative Exchange Council is available at this link.
- Caesar Rodney Institute
- Delaware Office of Management and Budget
- Delaware General Assembly
- Delaware state site
[edit] Additional reading
- Information on Delaware's Budget Development
- FY 2009 Budget, as enacted by the legislature at the end of June 2008.
[edit] References
- ↑ Gov. Jack Markell Press Release, "Markell Signs Budget That Responsibly Closes Historic Shortfall," July 1, 2009
- ↑ Delaware Office of the Controller General, "FY 2010 Highlights," September 28, 2009
- ↑ Delaware Office of the Governor, "Fiscal Year 2009 Highlights," July 1, 2008
- ↑ Business Wire, "Fitch Rates Delaware's $515MM GO Bonds 'AAA'; Outlook Stable," October 5, 2009
- ↑ Delaware State Education Association,"The budget process," retrieved March 24,2009
- ↑ State of Delaware,"Financial Summary FY 2005," retrieved March 24,2009
- ↑ 7.0 7.1 State of Delaware,"Financial Summary FY 2006," retrieved March 24,2009
- ↑ 8.0 8.1 State of Delaware,"Financial Summary FY 2007," retrieved March 24,2009
- ↑ 9.0 9.1 State of Delaware,"FY 2008 Recommended Budget," retrieved March 24,2009
- ↑ 10.0 10.1 State of Delaware,"FY 2009 Recommended Budget," retrieved March 24,2009
- ↑ 11.0 11.1 State of Delaware,"Financial Summary FY 2010," retrieved March 24,2009
- ↑ Delaware State Auditor Web site, retrieved October 13, 2009
- ↑ Delaware General Assembly Web site, retrieved October 13, 2009
- ↑ Gov. Jack Markell Press Release, "Delaware Receives Triple-A Rating," October 7, 2009
- ↑ California State Treasurer, “Comparison of Other States’ General Obligation Bond Ratings”
- ↑ Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
- ↑ Delaware Division of Accounting Web site, retrieved October 13, 2009
- ↑ Governor of Delaware,"Stimulus Package Will Create Jobs, Fund Critical Infrastructure Improvements ," February 18,2009
- ↑ American Recovery and Reinvestment Act,"Estimated job effect," retrieved March 24,2009
- ↑ 20.0 20.1 20.2 20.3 20.4 Philadelphia Business Journal,"Feds release $1.8B in infrastructure funds for tri-state area," March 3,2009
- ↑ Demarva Now,"Del. police agencies expect 'vital' funds," March 11,2009
- ↑ Community Pub,"Feds pledge $38 million to make Delaware greener," March 24,2009
- ↑ State of Delaware, "Delaware State Government Will Open Checkbook to Public," May 7, 2009
- ↑ National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
- ↑ Wall Street Journal, "Stimulus Spending by State"
- ↑ $6.4 Billion Stimulus goes to Phantom Districts, Watchdog.org, November 17, 2009
- ↑ Stimulus Creates Jobs in Non-Existent Congressional Districts, Watchdog.org, November 16, 2009
- ↑ Delaware, Watchdog.org, November 17, 2009
- ↑ National Taxpayers Union,"An Open Letter to the Delaware State Senate: Taxpayers Support Spending Transparency Web Site (SB 184)," March 7, 2008
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