Gov. Carney: fiscal reforms still a priority

 

Gov. John Carney speaks during the State of the State Address in the House of Representatives at Leg Hall on Thursday. (Delaware State News/Marc Clery)

DOVER — Gov. John Carney’s first State of the State focused on economic development, education and state budgeting, as the governor highlighted steps taken by his administration and lawmakers over the past year and urged legislators to continue working together to promote business growth, stronger schools and better quality of life.

The governor’s speech offered a few hints at what will be in his budget presentation next week, including an indication a pay raise for state workers will be recommended. Other points of emphasis for the budget recommendations, according to his address Thursday, include grants for needy students, upgraded government facilities and expanded early childhood education.

The address, largely apolitical, touched on a wide range of topics, as Gov. Carney continued themes he has promoted since he began campaigning in earnest for the governor’s office in 2016.

“A year ago, I stood on the steps outside this building and promised that working hard and working together, we would begin to meet the challenges facing our state,” he told the assembled audience. “And that by making tough decisions, we would put our state on a sustainable path in the new economy.

“And despite the inauspicious freezing rain on that day a year ago, I felt hopeful. I knew that if we worked hard and worked together, we could make our state stronger, and better prepared for the future. And we have.”

The governor pointed to five priorities in the beginning of his speech — the economy, jobs, schools, public safety and health — and several times urged bipartisan collaboration to meet goals. Partisan bickering and sharp differences of opinion prevented the General Assembly from getting a budget passed before the end of the fiscal year last summer, and lawmakers from both parties have pledged better cooperation this year.

Sergeant of Arms, Ed McTaggart, left, goes over the itinerary with House Speaker Pete Schwartzkopf. (Delaware State News/Marc Clery)

“When we left here last, we had worked through disagreements in balancing a $400 million budget shortfall. I said then — and believe today — that more work needs to be done to ensure our long-term financial sustainability,” Gov. Carney said. “But we should not lose focus on the progress we’ve made by working together.”

As accomplishments over his first year in office, Gov. Carney identified the creation of a public-private partnership aimed at bringing jobs to Delaware, modifications to the Coastal Zone Act officials hope will lead to business growth, more resources for students in need of extra help, updated cyber security, new cameras at the James T. Vaughn Correctional Center and continued efforts to combat addiction.

“It is because of all this work, all this work we did together, that I can tell you this: The state of our state is strong, and getting stronger,” the governor said.

State spending

The address lasted about 45 minutes, with several breaks for applause, and Gov. Carney deviated little from the prepared remarks.

More than 100 people, including lawmakers, judges and cabinet secretaries, were gathered on the floor of the House chamber, while around 50 more watched from the balcony in the back of the room. The governor’s wife, Tracey, and mother, Ann, were among those convened in the chamber for Gov. Carney’s first official State of the State. (He delivered an address to the entire General Assembly in March.)

House representatives from right to left, Stephen Smyk, Ronald Gray and Timothy Dukes during the Pledge of Allegiance. (Delaware State News/Marc Clery)

“You talk about ‘This is what I’d like to do,’ you give a big, broad plan and then later on you’ll see bills come out that will address some of those issues,” House Speaker Pete Schwartzkopf, D-Rehoboth Beach, said.

“You’ll see press conferences held for some of it, you’ll see budget proposals that will help fill in the blanks. State of the State is not meant to be ‘We’re going to do this by this, step by step by step.’ It’s usually just a broad outline of where he wants to go and what he wants to do for our state.”

Gov. Carney’s budget recommendations last year included tax increases he said would help provide long-term budget stability — necessary because revenues are not reliably growing with the economy, while state employee health care and Medicaid costs are skyrocketing. However, the key piece of that proposal, a hike in income tax rates, failed to pass despite months of lobbying from Democrats.

“We’re standing here today facing a much more positive financial picture than this time last year,” Gov. Carney said. “We closed a $400 million budget shortfall. But we did not go far enough, unfortunately, and as a result, our long-term budget problems continue to linger.

“It’s a simple math problem. Our long-term growth rate for state spending is two times the growth rate of our revenues. We have to find a long-term way to limit our spending growth. I’ve imposed this type of discipline on the budget I’ll introduce next week.”

He praised an effort by officials and health care providers to slow medical expenses, which currently make up nearly one-third of the state’s $4.1 billion budget.

In an effort to control budget growth, a committee of state officials and others has been examining the creation of a “budget-smoothing” fund that would be filled in boom years and tapped in bust years. Gov. Carney spoke in favor of the idea, which has bipartisan support, and he urged legislators not to commit to costly new initiatives without sound sources of funding.

Rep. Jeffrey Spiegelman, left, chats with Rep. Daniel Short before the State of the State Address. (Delaware State News/Marc Clery)

While most lawmakers, particularly Republicans, welcome the idea of avoiding adding too many costs, one leading legislator was critical of potential increased costs.

“If we want to make those additional expenditures, we have to pay for them somehow,” Senate Minority Whip Greg Lavelle, R-Sharpley, said of proposals like a state employee pay raise. “Again, it was a great speech, I heard a lot of fiscal contradictions at the beginning.

“We can’t spend money that we don’t have, we can’t build one-time money into the budget, we spend twice as much as we take in, and by my count, eight to 10 to 12 new spending initiatives, including some significant ones.”

Many new proposals, Sen. Lavelle said, are good ideas in theory — “I’m not the Grinch who stole Christmas” — but cannot be afforded because of budget constraints.

The governor has backed several pieces of legislation this year that would cost several million dollars.

House Minority Leader Danny Short, R-Seaford, agreed the speech identified important objectives and contained valuable advice toward limiting new spending: “Maybe there’s a lesson there for my colleagues, not to put together a program that will be perpetuated itself when in fact the money is not going to be the same thing.”

Economy and education

A current plan from the administration to provide more resources for Wilmington students who come from low-income households, are non-native English speakers or have disabilities has hit some speedbumps in the form of opposition from the Christina School Board, but that did not stop the governor from pushing additional resources for needy students Thursday.

“Working with you last year, we created the opportunity grants program to provide new resources to students who need it most. We reached thousands of students across 13 schools last year,” Gov. Carney said. “Next week, we will be proposing additional funding for opportunity grants that will more than triple the number of schools receiving this support. Schools could use this funding for things like after-school programs, reading interventions or other resources to help students and teachers be successful.”

Also revealed in the address was a planned student loan forgiveness program, designed to keep educators in the highest-need schools.

Senate President Pro Tempore David McBride, D-Wilmington Manor, was satisfied with the priorities laid out in Gov. Carney’s address.

“I was very pleased that the governor stressed education and economic issues. Obviously, we have a lot of work to do in the area of education,” he said. “I also like the fact that he talked about … improving some of their facilities and considering a pay raise. We haven’t done a lot of that lately because of budgetary issues.”

After one year in office, Sen. McBride said he believes Gov. Carney is “hitting his stride.”

“I think in the beginning, it was a little difficult for him, as it would be for anyone because it’s a difficult job,” he said. “But, I think over the last year, he’s really blossomed. In the beginning of the term, there’s a lot to do with the legislature and your cabinet. He’s done a good job putting everything together.”

Touting the budget-smoothing fund and the call for “fiscal discipline,” Rep. Short said he is looking forward to seeing more details about the governor’s vision being revealed next week in the budget recommendations.

During his speech, Gov. Carney pointed to specific legislation pending in the General Assembly on only two occasions: He urged lawmakers to pass a bill that would create a tax credit for investors in select Delaware technology companies and called a bill that would establish paid leave for state employees “the right thing to do.”

The tax credit measure passed the House unanimously last year, and the family leave bill was released from committee to the full House Wednesday. While a few Republicans are listed as cosponsors on the paid leave proposal, it received limited applause from GOP lawmakers when the governor mentioned it Thursday.

Economic development and employment in high-demand fields was a central topic throughout the address, with the governor pointing to collaboration between government and private businesses as an example of the role government can play in facilitating growth.

Continuing to prepare students for careers is a key goal, he said, singling out programs like Zip Code Wilmington and Pathways. Zip Code Wilmington teaches participants about coding and software, and Pathways is designed to prepare students for specific, in-demand fields, such as engineering and manufacturing.

“Investing in our workforce will pay dividends for generations to come,” Gov. Carney said. “Join me in making this a high priority.”

He teased a new strategy for the Port of Wilmington, saying his administration will soon detail “a plan for a new public-private partnership that holds the promise of significant new investments at the port.”

Part of the address centered on Wilmington, a hub of economic activity that has nonetheless seen record levels of violence in recent years. As Wilmington goes, so goes the state, Gov. Carney said, echoing a mantra used by many politicians before him about the First State’s largest city.

Briefly mentioned in the speech was a new deer-control program aimed at limiting crop damage and maximizing profits for farms.

On several occasions, Gov. Carney sought to bring together Democrats and Republicans, vowing cooperation would bring success for Delaware.

“This past year, we were faced with our fair share of challenges. But they did not shake our resolve to get things done. And they will not going forward,” he said.

“We won’t always agree on the solutions, but we can all agree on the goals: To make our economy stronger, our health care system more effective, our communities safer, our state workforce strong and stable, our children more ready to compete for the future.

“Working hard and working together, we can and we will get this done.”

Reach staff writer Matt Bittle at mbittle@newszap.com

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