Mid-term recap: A look at the Carney administration’s first two years

DOVER — John Carney’s first six months couldn’t have gone much worse.

Fifteen days after he was inaugurated to the office he’d had his eyes on for at least a decade, the governor had an unprecedented crisis on his hands. On Feb. 1, 2017, inmates in the James T. Vaughn Correctional Center seized control of the facility’s C Building, taking several prison employees hostage.

It was the first mass prison riot in Delaware history. When authorities breached the building the next morning, correctional officer Steven Floyd was found dead.

Meanwhile, the former U.S. representative took office with a budget gap of $350 million, which wouldn’t be resolved until July 3, after lawmakers missed their deadline for the first time since 1977.

So, yes, you might say there have been a few bumps in the road.

Gov. John Carney

But to put both issues on Gov. Carney is to ignore that he inherited them. The situation in the state’s prisons in particular had been brewing for years due to understaffing and, according to an October lawsuit, inmates being kept in “inhumane conditions.”

Difficult as it may be to believe, the 62-year-old Democrat is now approaching the halfway point of his first term, a period that has been defined in so many ways by the prison and budget problems.

Naturally, opinions on his tenure vary. House Speaker Pete Schwartzkopf, a Rehoboth Beach Democrat, sees the first two years as “a feeling-out,” while House Minority Leader Danny Short, a Seaford Republican, approves of some of the governor’s proposals and actions but disagrees with a few, and Delaware Democratic Party Chairman Erik Raser-Schramm characterizes it as a successful beginning.

Gov. Carney, for his part, said he believes he has achieved a number of significant accomplishments.

“The way I look at it is we did what I told people we would do when I ran for election, and that’s the thing that I’m proudest about,” he said earlier this month from his office in the Tatnall Building, which sits right across the street from Legislative Hall.

His campaign website highlighted various areas and initiatives he sought to focus on, such as:

  • Stabilizing the budget
  • Bringing blue-collar jobs back to the state
  • Eliminating excessive regulations limiting businesses
  • Limiting health care costs
  • Expanding drug treatment
  • Adding re-entry programs for inmates leaving prison
  • Strengthening the relationship between law enforcement and communities
  • Expanding career education programs in schools
  • Giving districts and teachers more authority
  • Cleaning up Delaware’s waterways
  • Preserving farmland and open space

Economic development

More than anything else in his platform, the governor emphasized job creation and economic development when he ran in 2016.

“Today in Delaware, we’re facing an economic future that will look very different from our past,” his campaign website states.

“When I was growing up in Claymont, it seemed like every other driveway on my street had a car going to work at DuPont in the morning. The parents of my friends were welders at Edgemoor or secretaries downtown. Other neighbors worked at the steel mill, or the GM plant on Boxwood Road. Today, many of those jobs are gone.

“We need to provide Delawareans with well-paying middle class jobs of the future as we strengthen our current economic base in manufacturing and financial services. Clearly, the future of Delaware’s economy is an innovation, start-up economy. I want Delaware to not only be the First State when it comes to incorporating a company, but also the First State when it comes to growing a company.”

He’s met many of his goals, such as reforming the Delaware Economic Development Office, updating the Coastal Zone Act and expanding job training efforts.

Gov. John Carney holds the first full-scale sports betting ticket, after picking the Philadelphia Phillies to beat the Chicago Cubs.

Whether all of those ideas have been what’s the best for the state, or have paid off, can be argued.

The state’s unemployment numbers were stagnant for the first year of his tenure even as the national rate improved. While unemployment has dropped in 2018, Delaware’s rate has been worse than the national average in 20 of Gov. Carney’s first 23 months.

Prior to March 2017, Delaware had lower unemployment than the country as a whole every single month save one for more than 16 consecutive years.

What could turn out to be one of the governor’s signature accomplishments, for better or for worse, is the creation of a new economic development body.

In 2017, legislators, on the urging of the governor, transformed the Delaware Economic Development Office into a public-private partnership with a board consisting of state officials, private-sector executives and nonprofit leaders. Other parts of DEDO were moved to a new division in the Department of State.

“So, the public-private partnership is going to be almost solely focused on marketing the state of Delaware,” Cerron Cade, the former interim chief of DEDO and now the secretary of labor, said in October 2017.

“That can be very costly, very time-consuming and really take the attention away from really all the blocking and tackling things that are necessary in economic development. So, they’re going to pick up that burden and leverage some private-sector resources so we can continue to put our best foot forward there.”

According to the organization, formally known as the Delaware Prosperity Partnership, it has helped 10 companies locate or expand to Delaware this year. Those companies will lead to “709 new jobs, 1,171 retained jobs, and $105.3 million in capital investment,” partnership spokeswoman Sarah Kenney-Cruz wrote in an email.

Some of those companies also received funding from the state, which was recommended by a separate (and pre-existing) entity.

The partnership’s efforts can include helping interested businesses find a suitable site, setting up meetings with other state officials and providing companies with information about tax credits and other incentives.

Whether those companies would have expanded or settled in the First State under DEDO will never be known. Partnership officials were not immediately available to comment further on the group’s successes and failures.

While describing Gov. Carney as committed to economic development, Senate Majority Whip Bryan Townsend, a Newark Democrat, expressed skepticism over the partnership. He was one of the few lawmakers to vote against the bill creating the entity.

“I just didn’t really understand how that model was supposed to work,” he said. “I still don’t understand. I’m not convinced it’s optimal.”

Some legislators and open government advocates took issue with the Delaware Prosperity Partnership being effectively considered a private entity immune from some of the rules that govern state bodies, such as Freedom of Information Act laws, and argued the bill establishing it lacked teeth to enforce conflict of interest statutes.

2017 also saw changes to the landmark Coastal Zone Act, which prohibited development along the coast when it was passed in 1971. Under Gov. Carney’s direction, legislators created exemptions for 14 sites in the coastal zone, authorizing the Department of Natural Resources and Environmental Control to issue permits for other industries and bulk transfer facilities there.

The original act referred to banning bulk transfer facilities as “imperative.” Bulk product transfer consists of moving large quantities of a substance such as oil from a ship to a dock.

Gov. John Carney is sworn into office in January 2017 by Chief Justice Leo Strine.

Backers hoped the measure would not only spur cleanup of pollutants from brownfields but would create jobs. Nearly all of the exempted sites are between Delaware City and Claymont.

The bill was opposed by environmental proponents.

The changes to DEDO and the Coastal Zone Act were recommended by Gov. Carney’s transition team, which drafted a long list of ideas focused on revitalizing the economy, improving public safety and bettering the education system.

Earlier this year, the state announced it had reached a deal to lease the Port of Wilmington to a company based in the United Arab Emirates. That company, Gulftainer, the largest independent and privately owned port operator in the world, agreed to invest more than $580 million in the site over the next nine years. The 50-year lease is expected to create thousands of jobs, according to the state.

James DeChene, the Delaware Chamber of Commerce’s lobbyist, praised the governor’s focus on making Delaware more attractive to businesses with the elimination of some regulations, creation of the Delaware Prosperity Partnership and alteration of the Coastal Zone Act.

“There’s a vision there on what he wants to accomplish related to economic development, certainly,” he said.

Prison conditions

Just two weeks after he took office, the governor was tasked with responding to the prison crisis.

Now, two years later, many of the issues still form a cloud over the state and could continue to do so for some time.

Geoff Klopp, the president of the Correctional Officers Association of Delaware, spoke approvingly of the changes the state has sought to make to its prisons since the Vaughn uprising. Delaware has agreed to raise starting salaries for correctional officers from about $35,200 to $43,000, provided money for new equipment for officers and created a committee to analyze ways to better recruit and retain workers.

However, the Department of Correction’s issues are far from solved. As of Monday, there were 217 open positions, a vacancy rate of 11 percent, although Mr. Klopp claims a staffing study conducted by the agency indicates more than 400 additional officers are needed.

Delaware spent almost $31 million on correctional officer overtime for the fiscal year that ended June 30, up from $22 million the year before. Reducing overtime remains the only one of the 41 main recommendations made by an independent review team that has not been met, and a July report estimated that goal might not be complete until 2020.

“We’ve been happy with the initial steps that have been taken by the governor’s administration and the DOC, but right now we have crucial steps forward that must be taken or we will start to fall back in the wrong direction again,” Mr. Klopp said.

He said he wants a better pension structure and higher salaries for COs, characterizing the changes made thus far as only about one-third of what is needed.

“If we do not fix this properly, I don’t think the governor makes it through his tenure without dealing with another catastrophic event,” he said.

Education

In the education arena, the most notable news is perhaps that there hasn’t been too much. Some teachers, education advocates, parents and lawmakers butted heads with Gov. Carney’s predecessor, Jack Markell, at times during his second term, arguing the Department of Education was becoming too centralizing and the state’s education system too corporatized.

Jack Markell

The Delaware State Education Association was effusive in its praise for the current governor.

“He has championed issues that matter to our members like paid parental leave, student loan forgiveness, and special education funding. Governor Carney is also the first governor in recent history to propose raises for state employees and demonstrate his willingness to work with state employees to provide quality healthcare while trying to reduce the cost to the state,” union spokeswoman Shelley Meadowcroft wrote in an email.

“While many of the changes that our members want to see, such as access to mental health services in schools and funding for disadvantaged students, take more than two years to accomplish, the governor’s willingness to listen and collaborate on these issues helps us to continue forward progress.”

Budget policies

A key tenet of Gov. Carney’s 2016 platform was revamping the state’s budgeting process. Lawmakers have struggled to balance the budget over much of the past decade, starting with an $850 million shortfall in 2009 during the height of the Great Recession, in part due to the nature of the state’s revenue portfolio.

Delaware derives much of its revenue from sources like the corporate franchise tax, the lottery and unclaimed property, which don’t reliably grow with the economy.

“We have a spending problem, we have a revenue problem and both are structural,” Secretary of Finance Rick Geisenberger told the budget-writing Joint Finance Committee in February 2017.

Gov. Carney, the state finance secretary from 1997 to 2000, tackled the issue with zeal, pitching legislators and the public on a “budget reset.”

Upon being inaugurated, he was immediately tasked with closing a nine-figure shortfall.

In March 2017, he proposed a budget based on what he termed “shared sacrifice,” with slightly higher income and property taxes and cuts in nonprofit and school district funding. That proposal, however, was met with opposition from both sides.

Republicans refused to vote for an income tax increase without major concessions from Democrats, and some Democratic lawmakers from the party’s left wing felt the recommendations put too much of a burden on lower- and middle-class Delawareans.

In the end, an income tax bill different from the one proposed by the governor fell just short of passage in the House on July 1, 2017, when Rep. Andria Bennett, a Dover Democrat, refused to support it. While the measure still would have had to make it through the Senate with Republican votes, Democrats felt there would be more pressure on GOP lawmakers if it could get out of the House.

The General Assembly settled for a temporary funding measure and entered into an “extraordinary” session after five months of negotiations and a historic failure to pass a budget by July 1, the start of a new fiscal year. Legislators departed the state capitol to return the next day, when they finally hashed things out and reached consensus.

With Delaware in a better financial state in 2018, Gov. Carney proposed a “budget smoothing” fund. Under that plan, officials would establish a benchmark figure, with the state setting aside all revenue that exceeds that in a given year — the biggest change to Delaware budgeting in more than 35 years.

The new fund would have thus been filled in boom years and tapped in bust years, providing more stability to the state’s budgeting process.

Republicans strongly supported the plan, with 23 of the Legislature’s 26 GOP lawmakers at the time cosponsoring a bill creating such a fund. But while some Democrats were initially receptive, others were not, and many supporters turned against it because they did not want to put the concept in the state constitution out of concerns they would be unable to make changes if needed because of the higher vote threshold required to alter the constitution.

Gov. Carney remains supportive of the concept, and he signed an executive order at the end of June that sought to accomplish the same thing as the failed bill, although the executive order does not have the force of law. Some Democratic lawmakers were not overly pleased with the order, calling it an unnecessary restriction and an overreach.

Flanked by lawmakers, Gov. John Carney holds up the budget bill after signing it.

The governor believes a “strong and stable and sustainable budget” remains a necessity and hopes to push the smoothing concept again to lawmakers.

“I’ve always believed as a Democrat that lots of these social programs and education and things that cost money are really, really important, but you can only do it in a fiscally sound and sustainable way,” he said.

He sees the proposed budgeting changes as common sense, a way to counter the fiscal challenges officials have been faced with over the past decade.

“What my argument with my fellow Democrats is if we work hard on being more efficient and being more effective, spending our tax money more wisely and having a more sustainable budget, we can do more of the things that they want to do,” Gov. Carney said.

Asked if that concept has been tough to get across to lawmakers, he said they generally understand but have their blind spots and pet projects.

The work on that front continues, and while many legislators are hesitant to put spending controls in stone, Gov. Carney said he believes his administration has been successful in convincing the General Assembly to look long-term in regard to budgeting. Lawmakers set aside $46.7 million earlier this year and used other funds for one-time projects to avoid inflating the budget, which would necessitate either large cuts or tax increases when revenue falls short of projected costs, as it is expected to do within a few years.

“The challenge will be how we spend our money this year knowing that those lines are going to cross again next year or the year after as those spending increase rates are greater than the revenue increase rates, if that makes sense, so the conversation needs to continue but it needs to continue in the context of finding a mix and a balance, and then this year it’ll be, much like last year, we have this extra revenue, should we spend it in the operating budget or should we put it to one-time investments that don’t recur, that make it harder next year when those lines get closer together,” the governor said.

“Particularly with a lot of new people, 20 or 25 percent of each chamber’s new, so they’re all coming down here eager and energetic, ready to do things and ready to spend money.”

Opponents of budget smoothing often ignored the fact that while there would be less money to spend in some years, those funds could be available in other years to offset decreases in revenue, Gov. Carney said.

Rep. Short, the House minority leader, credited the governor for supporting the concept, which is backed by the Delaware Chamber of Commerce and several other organizations.

To Sen. Townsend, Gov. Carney has done a good job shining the spotlight on sustainable budgeting, although the majority whip indicated he wants to see more discussion about revenue sources as well.

“As long as it doesn’t result in political shenanigans that get in the way of countercyclical spending to help Delawareans, then I’m very open to the idea,” he said.

Butting heads

While opinions on Gov. Carney’s term thus far vary in part based on political affiliation, the governor has at times angered or frustrated members of his own party. Budget smoothing is one example, but he also sparked some ire when he vetoed two bills in October.

One measure would have changed the state’s Earned Income Tax Credit by making it refundable, meaning recipients would get money back from the government when the amount of the credit exceeded the money owed to them. The second would have placed the senior property tax credit, which is currently administered by the counties, under the state’s authority and means-tested it so that seniors who are financially well-off would not receive it.

The former would have lowered the amount of the credit, in effect raising taxes on 35,000 families, the governor wrote in his veto notice. His opposition to the second bill stemmed from a desire to implement tax changes all at once rather than piecemeal and out of concern it placed too much of a burden on citizens by requiring them to seek the rebate from the state.

The main sponsors of both bills reject his arguments.

Rep. Paul Baumbach, a Newark Democrat who introduced the Earned Income Tax Credit legislation, said he believes the governor “let the pursuit of the perfect keep us from achieving the good.” While some people would in effect have paid more under it, more would have benefited, he said.

The main sponsor of the other measure, Rep. Kim Williams, also questioned the governor’s decision, pointing out that the current budget bill contains language stating the tax credit will exist in its current form until a means-testing program could be developed. That provision could be carried over into future budgets.

“I don’t know if there’s something else,” the Newport Democrat said. “I don’t know. I’m not going to try to think about why.”

Both representatives also questioned how the governor handled the situation, saying it was poorly communicated.

Like Rep. Baumbach, Sen. Townsend is somewhat skeptical of Gov. Carney’s insistence on handling tax policy all at once rather than breaking it up into pieces.

He has for several years promoted the creation of new fees to be used to clean up the state’s dirty waterways, although the idea has gained little traction. While Sen. Townsend pointedly avoided directly criticizing the governor, he pushed back against Gov. Carney’s preference to get all his ducks in a row first, describing the desire as not always feasible or advisable.

“The administration wants to have it be part of the broader budget conversation and I get that, but if a broader solution isn’t forthcoming yet then let’s not have any delays on clean water,” he said.

Naturally, Republicans were quicker to find fault in the governor’s performance.

“We’re still considered an anti-business state and we’ve got some problems that haven’t been corrected under him,” Senate Minority Leader Gerald Hocker, an Ocean View Republican, said. He’d like to see a greater reduction in government regulations and a stronger education system.

Delaware GOP Chairman Mike Harrington shared similar sentiments, giving the governor a C- grade in economic development and criticizing the state’s schools.

“I’d hate to think my grandchildren are all going to have to leave Delaware in order to get a decent job,” he said.

While Rep. Short was more complimentary, he said Gov. Carney has been more political than his predecessor, getting more involved in campaigning for Democratic candidates, which “can create hard feelings” on the other side.

Lawmakers differed in describing how well the governor’s office has communicated with the Legislature.

House Speaker Pete Schwartzkopf

“Like any new governor coming in, he’s going to have his ups and downs,” said Rep. Schwartzkopf, the speaker of the House.

He sought to downplay the October vetoes, describing them as normal disagreements and as the governor’s right.

Any new administration will have its rough spots on occasion, he said, noting it takes time for members of the executive and legislative branches to get to know one another.

Rep. Schwartzkopf said he and Gov. Carney can be honest with one another, and while differences of opinion do pop up, he characterized them as a normal part of a working relationship.

Sen. Hocker said Gov. Carney communicates well with the General Assembly, while Rep. Short said he is generally accessible and willing to compromise, although he did remark that the relationship between the two branches still has room to improve.

Rep. Schwartzkopf praised the governor for his work combating the opioid crisis, attempting to limit health care spending and expanding the port.

“If there’s anything that he may need to improve on, it’s his self-promotion, his packaging,” he said, describing the governor as quiet.

Sen. Townsend is optimistic about the future of the Carney administration, describing the governor as hitting his stride.

“I think there have been some important steps and I think there have been some tremendous challenges,” he said, pointing to the Vaughn uprising in particular as throwing a wrench into whatever plans Gov. Carney may have had coming into the office.

He refrained from casting an overarching judgment on the administration, calling it “folly” to do so after just two years.

For his part, Gov. Carney noted a host of new lawmakers will be sworn in in January, meaning he will have to start from scratch with about a quarter of the General Assembly.

In total, 15 of the body’s 62 members were newly elected in November.

‘Now the pressure is on’

The last five governors of Delaware have all served two terms. Only time will tell whether Gov. Carney does too.

His approval ratings remain strong, with an October survey from Morning Consult finding 52 percent of Delaware respondents approved of his performance while 28 percent did not. His net rating makes him the second most popular Democratic governor in the country by that index.

Gov. John Carney posted to Twitter this photo of him and his son Jimmy at Super Bowl 52.

Shortly after the 2018 election, Gov. Carney said he had not put much thought into re-election yet, and Rep. Schwartzkopf said earlier this month he has not broached the subject with the governor.

Not counting Richard McMullen, who did not run for a second term in 1940 due to health concerns, the last governor not to seek another term was Robert Robinson, who held the office in the 1920s.

Should Gov. Carney run in 2020, he might have to fend off a challenge from his left despite his apparent popularity. Some of the state’s most left-leaning residents have long desired primary opponents for some of Delaware’s more moderate Democratic officials, and they got one this year when Kerri Evelyn Harris took on the behemoth that is longtime politician Tom Carper.

Though Sen. Carper won, the race gained substantial attention around the country and energized many progressives. Ms. Harris picked up about 35.4 percent of the vote, only 2.4 percent less than Republican nominee Rob Arlett got against Sen. Carper in the general election two months later.

Many liberal activists did not have particularly high expectations for Gov. Carney, whom they viewed as an uninspiring candidate lacking bold ideas and a commitment to progressive policies.

Drew Serres, the executive director of the grassroots advocacy group Network Delaware, said he believes Gov. Carney wants to help people but feels the best way to do it is by working with businesses to grow the economy, an approach some members of the Democratic base disagree with.

“The folks in the activist community I talk to are still waiting for Gov. Carney’s plan of action to fundamentally tackle issues impacting communities of color and low-income families,” Mr. Serres wrote in an email. “Right now he appears focused on working with the private sector on development and setting up ‘opportunity zones’ to target investment, but where’s the sense of urgency to move quickly on so many other issues?

“Where’s the sense of urgency to reduce the size of prison population, instead of sending prisoners out-of-state due to overcrowding? Where’s the sense of urgency to dramatically reshape our education system so kids get an exceptional education no matter which neighborhood they live, instead of arguing that the state has no constitutional requirement to provide an equitable education for all? Where’s the sense of urgency to support working families, instead of vetoing low-income tax credits?

“Now the pressure is on Gov. Carney over these next two years to prove with his actions his commitment to Black and Brown families and low-income neighborhoods. The Democrats added to their majority in both the House and the Senate, so there’s no excuse to not be bold. He has a huge opportunity to push an agenda to address concentrated poverty in areas left behind, or he can waste this chance.”

Entering the 150th General Assembly, the Carney administration will “be looking to build on” the successes of 2017 and 2018, the governor said, although he was reluctant to share specifics.

In some ways, his resolve has only strengthened over the past two years.

The Vaughn riot added budgetary obstacles for Gov. Carney, although those pale in comparison to the impact of having a law enforcement officer killed on his watch.

Gov. John Carney gets emotional as he makes remarks at a press conference about the events that led to the conclusion of the hostage situation at the James T. Vaughn Correctional Center in Smyrna and the death of Steven Floyd, a 16-year veteran of the Delaware Department of Correction.

The incident was a sobering and emotional one, but at the same time, it was a reminder for the governor of what’s truly important — something he said was needed as he adjusted to the rigors of the office of the state’s chief executive.

He spoke with passion as he described how the deadly uprising has influenced him, pounding his hands on his desk for emphasis at one point.

“When that happened and I realize that people go to work as state employees risking their lives, this guy lost his life, then I shouldn’t be worried about some of the petty political things that get in the way or something that might negatively affect me personally in the press, I should just try to do the right thing and just bring people along,” he said, “and it was in that sense an important part of that first year because you get buffeted by all the differences of opinion, people in the press that are hammering you all the time, but if you can wake up and think, ‘This is the right thing to, whether it’s for corrections or for education and whatever and I’m going to do it,’ … just sticking to your guns and focusing on really making sure that you’re doing what you can.”

Staff writer Matt Bittle can be reached at 741-8250 or mbittle@newszap.com. Follow @MatthewCBittle on Twitter.

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