Budget committee approves pay raises for state workers

John Carney

DOVER — The General Assembly’s appropriations committee began budget markup Tuesday by approving pay raises for most state workers and rejecting higher health care premiums.

The Joint Finance Committee unanimously agreed to include in the budget salary increases of $1,000 for most state employees, as recommended by Gov. John Carney in January.

Not included among the recipients of the flat sum are teachers, who would receive a 2 percent bump instead, and collectively bargained employees like correctional officers.

Lawmakers on the committee also opted not to require state employees to pay more for their health care, even though several members of State Employee Benefits Committee spoke in favor of those hikes earlier this month.

JFC’s decision on health care came despite projections the Group Health Insurance Program reserve account, forecast to total about $60 million by the end of this fiscal year, would be nearly $34 million underwater in just two years without any changes to health care plans.

The SEBC had been considering increases of either 1 or 2 percent but decided to defer to lawmakers.

While the future estimate for the reserve account appears ominous, Office of Management and Budget Director Mike Jackson is more optimistic.

“We’ve experienced claims experiences that have beat trends,” he explained after the meeting. “We feel that that’s going to continue, and obviously the forecast that the State Employee Benefits Committee has been reviewing is one forecast and we feel as long as the trend continues for the next year or so, we’re going to be able to smooth in premium increases. It’s not really a matter of if it’s going to happen, it’s just when.”

While the SEBC could very well end up raising premiums next year, state employees for now have the comfort of knowing their paychecks should soon be a little larger — and the state won’t be giving with one hand while taking with the other.

“We’re trying to do a comprehensive approach so that employees know we are intending to keep up a regular effort to make sure that their take-home is better than it was last year,” JFC co-chair Sen. Harris McDowell, D-Wilmington, said after the committee broke for the day.

The legislature traditionally takes a two-week hiatus at the end of May, giving lawmakers time to prepare for the chaotic final month of session. The budget-writing committee uses those two weeks to meet and craft the final operating budget bill, which could be introduced by the middle of June.

In addition to Tuesday’s opening, JFC is scheduled to meet today, Thursday and three days next week. By the time the 12-member body concludes, the operating budget should be all but complete.

The exact total of the spending plan isn’t known just yet, but it is expected to be at least $4.4 billion.

With the state in a strong financial situation — revenue projections for the current and upcoming fiscal years have climbed by about $300 million cumulatively over the past 11 months — budget-writing legislators do not have to worry about making deep cuts.

In fact, they might even be able to start new programs or expand existing ones. Proposals floating around in the legislature would expand Medicaid to cover dental care, raise the rates paid to disability service providers and provide more funding for special education, to name a few.

But just because lawmakers have more money to play with doesn’t mean the state will be rolling out hordes of new initiatives. Both Gov. Carney and most members of JFC have strongly supported using extra revenues for the capital budget or other temporary needs rather than building potentially unsustainable spending into the general spending plan.

“The source of it, the majority was one-time issues. And so, the thing that we’re trying to prevent is not that we appropriate something now just to turn right back around and take it away. We’re trying to get consistency and predictability back into our process,” said JFC co-chair Rep. Quinn Johnson, D-Middletown, alluding to the large peaks and valleys Delaware’s budget has seen over the past decade.

JFC set aside $47 million last year, and Gov. Carney wants to add about $45 million to that, giving the General Assembly a sizable sum that can be used in the near future if, as expected, expenses surpass revenue growth.

That’s an approach backed by the State Chamber of Commerce, with President Michael Quaranta in a statement urging legislators to “seize this opportunity to better prepare the state for inevitable economic downturns and subsequent budget shortfalls” by holding in reserve another $125 million.

Aside from passing the pay raise and turning down higher premiums, JFC did little that would grab headlines Tuesday. Instead, most of its work was focused on the necessary but rather boring parts of the operating budget, things that would mean little to most Delawareans.

But by spending several hours authorizing minor increases or decreases to different areas of the spending plan and approving “boilerplate” provisions — epilogue language, in government jargon — that spell out in greater detail how funds are to be spent, legislators took a big step toward producing a balanced budget well before June 30, the last day of the fiscal year and the final regularly scheduled session day in 2019.

The process is still far from finished, however, as JFC did not touch some of the more controversial or complex state agencies, such as the Department of Education. Members will continue making adjustments to funding levels and passing epilogue language today.

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