Time running out for legislative session

 

DOVER — Tick, tick, tick.

Lawmakers have less than a week left to balance the budget (and take care of all other business this year), pitting them against the clock.

June 30 is the final day of the fiscal year and the last of four regularly scheduled legislative days remaining.

June 30s are typically a marathon, with lawmakers coming into session in the late afternoon or early evening and working until the wee hours of July 1.

The budget was not signed until after 5 a.m. the previous two years, and there’s the potential for another very late night.

Because this is the first leg of the 149th General Assembly, any bills not passed by the time lawmakers break for the year can be picked up where they were left when senators and representatives return in January.

While that’s good news for supporters of causes like marijuana legalization and reinstatement of the death penalty, advocates would doubtless prefer to see their measures passed sooner rather than later. Unfortunately for them, the budget is all-consuming.

This year, the General Assembly is tasked with eliminating a shortfall of approximately $390 million. A bill raising the franchise tax would generate about $116 million, while the Joint Finance Committee has cut about $80 million, and “soft cuts” — areas lawmakers do not plan to fund but do not have to vote on — of about $95 million exist.

Bills raising taxes on income, alcohol and cigarettes would bring in about $85 million in the next fiscal year, leaving around $14 million left.

Proposals from Gov. John Carney to reduce education funding and require state employees to pay more for their health care could then eliminate the rest of the gap.

The catch, as always, is in the details.

Negotiations

Democrats and Republicans have been meeting for months in an effort to come to an agreement on the budget. While Democrats control both chambers, the party lacks a three-fifths supermajority in the Senate, which is needed to raise taxes.

That gives the GOP substantial bargaining power, and Republicans have used it, resisting tax hikes thus far.

Members of the party are pushing for spending reform, and while lawmakers on both sides of the aisle agree structural reform (a favorite term of Gov. Carney’s) is needed, their approach differs. Republicans, at least publicly, have been more amenable to large cuts than Democrats, although House Speaker Peter Schwartzkopf, D-Rehoboth Beach, said members of both parties privately called him to protest cuts several weeks ago.

Rep. Schwartzkopf said Thursday the two parties are closer to reaching a deal, which could see Democrats agree to examine Medicaid reform, school district consolidation and fiscal restraints in return for Republican votes on taxes.

“This is something that both sides, all four caucuses, leadership have talked about, some of the language,” he said Thursday. “We’re going to try to put it in one bill. We have a copy of the bill we want to just talk to our caucuses about. See where they stand on it.

“Doesn’t have anything to do with money, not right now anyway, no dollar signs on it, but this is the … prelude to getting to the money discussion.”

The draft bill would create committees to study merging some of the state’s 19 school districts, reducing Medicaid costs and limiting budget growth based on inflation and population increase.

Republicans have also pushed for prevailing wage reform, which governs how much laborers on state-funded construction projects are paid, but Democrats have steadfastly resisted changing the wage.

Democrats have questioned why they need to give up something for Republicans to do, in the words of Rep. Schwartzkopf, “what is in the best interest of our state” but the opposition counters tax increases do not help Delawareans.

“Enacting tax increases does nothing to address the underlying issues; it just pushes off the day of reckoning,” Senate Minority Leader Gary Simpson, R-Milford, said in a statement. “If we keep walking down the same path, we’re going to continue winding up at the same destination.”

Politics likely comes into play too: Republicans might be able to gain some seats in the 2018 election by tying the cuts to services and tax increases to the Democratic majority. Just one flipped seat in the Senate would give the GOP control of the chamber for the first time since 1973.

Fairly or unfairly, voters may blame negative effects on Democrats.

The budget process has been stormy at times, with politicians tossing not-so-veiled shots at the other side and even the Facebook pages for the Senate Republicans and Senate Democrats engaging in an indirect war of words.

Members of the leadership meetings have stomped out at times, although they’ve returned and discussions have picked up again, according to Rep. Schwartzkopf.

He is hoping the budget can be passed before Friday, though technical limitations (the need to draw up and print the budget) makes that unlikely if no deal is reached soon. The speaker does believe, however, lawmakers will come to an agreement before the last day of the legislative session.

Rep. Quinn Johnson, D-Middletown, noted the bond bill may not be finished until around 5 a.m. Saturday, a remark that led to some other lawmakers joking he is taking an optimistic view.

In contrast to Rep. Schwartzkopf, Senate Minority Whip Greg Lavelle, R-Sharpley, is not sure there will be an agreement by Friday.

“We’re still working on it,” he said. “I mean, it’s not easy. There’s broad differences of opinion across a range of issues and we’re not there yet.”

Joint Finance Committee

JFC eliminated or reduced a number of programs and groups several weeks ago, ranging from the elimination of the Board of Education to reductions to many health-related programs, including efforts to combat heroin addiction, infant deaths and cancer.

Some of those cuts could be undone by the committee if lawmakers come to an agreement on revenue.

Members of Kent County Tourism are certainly hoping one cut in particular is reversed. JFC voted to transfer 1 percent of the public accommodation tax to the state, effectively depriving the nonprofit of $400,000 — nearly all of its funding, according to Executive Director Wendie Vestfall.

“So if this cut ultimately is final we are looking at possibly closing our doors,” she said.

The organization has produced an economic impact of about $4.5 million so far this year, she said.

Other nonprofits are also facing what could be a serious hit to their bottom line, and even drive some out of business, in the form of a $5.2 million, or 11.3 percent, cut to grant-in-aid. The exact nature of that cut has yet to be decided, and it’s possible lawmakers could go in a different direction.

Spending reform would help prevent nonprofits from being “held hostage,” Sen. Lavelle opined.

JFC has yet to address controversial proposals from Gov. Carney to cut $37 million from school district funding and shift $6.5 million in health care costs to state employees.

The governor has called the health care change a key part of stemming expenditure growth, but lawmakers were not keen to put more of the burden on state workers in a previous JFC meeting.

Other business

Still on the table are bills to, among other things, legalize marijuana, put the death penalty back in place and raise the minimum wage.

House Bill 110 would allow individuals at least 21 years old to buy cannabis from licensed shops, making Delaware the ninth state in the nation with legal marijuana. Delawareans would not be allowed to grow their own plants, unlike most of the states that have legalized the drug.

The bill is currently awaiting a vote on the House floor. If it is approved by the full chamber, it will go the Senate.

Passage is generally seen as unlikely, particularly because the proposal requires a supermajority in both chambers.

House Bill 125, which would reinstate capital punishment after the Delaware Supreme Court struck it down in August, has been awaiting a Senate committee hearing for six weeks after passing the House.

The bill has bipartisan support, but while it passed the House with a bit of breathing room, the Senate vote is expected to be closer. However, a vote will not take place until next year, unless backers try to suspend the rules to get it on the floor this week.

Senate Bill 10 would raise the minimum wage by 50 cents over four years, stopping when the wage floor reaches $10.25. The measure was expected to be voted on in the Senate earlier in June but was pulled from the agenda because it did not have the votes.

Nonetheless, it remains in the queue, to the delight of most Democrats and frustration of most Republicans.

Set to be voted on Thursday is House Bill 190, which would remove some of the limitations in the 1971 Coastal Zone Act. The law limits industrial activity and development along the state’s coast.

The proposal, supporters say, would drive economic activity.

Plenty of bills will be passed this week, and while they are doubtless important, no single piece of legislation impacts every Delawarean like the budget.

While unlikely, there does technically exist a chance legislators will fail to find consensus and will exit July 1 without a budget. Although questions surround that possibility, it is believed lawmakers would pass a continuing resolution temporarily funding the government — or at least the essential services.

Rep. Schwartzkopf said he believes state employees would not be paid and many services would halt for the duration of the period where there is no budget, but he is unaware of that ever happening in Delaware.

The steps, legislators say, have been trying at times, and they are not done yet, but (a bit of) time remains.

“They say it’s like watching scrapple being made,” Rep. Schwartzkopf said of the process.

Reach staff writer Matt Bittle at mbittle@newszap.com

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