Carney signs executive order on budget limit

DOVER — Gov. John Carney on Saturday signed an executive order focused on limiting budget growth, although the directive is nonbinding.

Based off recommendations issued last month by an advisory panel on budgeting, the order instructs the council that sets the state’s revenue forecast to develop a benchmark aimed at slowing the growth of the budget by setting aside revenue that, if expended, would cause the spending plan to pass a certain point.

The decree comes after a constitutional amendment that would have accomplished much of the same thing failed to advance through the General Assembly, primarily due to opposition from Democratic lawmakers, members of the governor’s own party.

While the administration hopes to use the executive order to end the cycle of boom and bust that has plagued decision-makers over much of the past decade, it is ultimately advisory, meaning the General Assembly can choose to completely ignore the limit and expend beyond what the benchmark calls for.

Asked if the idea behind the order was to put political pressure on legislators, Gov. Carney, who has made budget stabilization perhaps his main priority, did not deny it.

“Well, the intent is to lead, to say to the public that this is the way we ought to do it, this is a better way,” he said. “It protects our priorities in down cycles better than our current system. Our current system in some ways creates an incentive to appropriate into a bubble because it allows us to do so.”

Under the executive order, DEFAC will be tasked with developing an “index” based on the three-year average of the state’s personal income and population growth, as well as inflation on government goods and services. From there, the council will create a spending limit the governor’s proposed budget, unveiled in January every year and used by lawmakers as the basis for the eventual final spending plan, will adhere to.

Whether the Joint Finance Committee adheres to it is a different story.

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