Retired state employees seek hike in pensions

DOVER — Gov. John Carney’s budget proposal calls for setting aside $45 million lawmakers can use for a future budget crunch, but that money is already being pulled in several directions.

Whether those dollars end up being allocated for the fiscal year starting July 1 or saved could depend simply on how much influence the governor has in the General Assembly.

The first round of legislative budget hearings kicked off Tuesday, with state officials and members of the public appearing before the Joint Finance Committee to detail funding requests and urge legislators to support increases in some areas. Several retired state employees implored the budget-writing committee to provide more money for pensioners, who have received two permanent increases over the past seven budget cycles.

“We want to remind you that our retirees depend on you to help safeguard their pension and health care,” said Ted George, the president of the Delaware Retired School Personnel Association.

The 27,000-plus retired state workers are being impacted by inflation and rising medical costs, Mr. George said, asking JFC to fund a 3 percent raise for those government employees who retired at least 20 years ago and a 2 percent bump for most others.

Joseph Malloy, the chairman of the Delaware Pension Advisory Council, spoke in favor of increasing the burial benefit of $7,000, which he said falls well short of covering funeral expenses. According to Rep. William Carson, a Smyrna Democrat, the death benefit was last increased in 2001.

Lawmakers gave pensioners a $400 bonus last year, but speakers said it was not enough for most retirees. State employees were earmarked a $500 bonus in 2018 in addition to a raise of either $1,000 (for most workers) or 2 percent (for teachers).

According to the Office of Management and Budget, a 1 percent increase for pensioners would cost about $10 million per year for five years — a sum legislators are sure to find tough to swallow.

Sen. Harris McDowell, a Wilmington Democrat who co-chairs the 12-member committee, appeared reluctant to support a permanent increase for pensioners, noting the cost.

Some lawmakers also briefly stumped for more funding in other areas, with Sen. Dave Lawson, a Marydel Republican, advocating for more money to go toward school safety while Rep. Earl Jaques pushed for increased pay for substitute teachers and school bus drivers.

“You can get a job delivering pizzas for more money than our students, and that’s a shame,” the Glasgow Democrat said.

In the months to come, philosophical differences are sure to pop up — and not just between Democrats and Republicans. Legislators will file bills with price tags, which could eat into the $45 million Gov. Carney wants to sock away, and JFC may be inclined to use some of those dollars too.

Gov. Carney last year convinced legislators to set aside about $47 million to avoid growing the budget too much, with the intention of using that money when the state’s expenditures surpass its revenue collections, as is expected to happen in the next few years. Like last year’s recommended budget, the spending plan he unveiled last week not only holds some money for the future but also allocates a significant portion of new dollars to one-time items, chiefly capital projects.

That stance, however, has frustrated some members of his own party, who in 2018 killed a constitutional amendment that would have mandated lawmakers hold in reserve revenue beyond a certain point to prevent the budget from ballooning.

Sen. McDowell was unwilling Tuesday to commit to not touching the $45 million, noting legislators may want to tap into it to fund retiree increases or something else.

“I’m fond of saying the governor gave us a good budget to start with, but there is one thing: He spent all the money,” he said after budget hearings concluded.

Worth keeping an eye on in the upcoming weeks and months is the dynamic of the committee, which has seven new members, including a new House co-chair. That chair, Rep. Quinn Johnson, a Middletown Democrat, has been supportive of putting excess revenue in a stabilization fund, while Sen. McDowell is more in favor of spending it to secure a robust social safety net.

Among the items in the governor’s budget recommendations that could meet with opposition from some in the legislature is a proposal to provide $60 million over three years for low-income students and those who speak English as a second language. Although Democrats figure to be largely supportive of the plan, some lawmakers fear much of that money will be eaten up by bureaucracy rather than going to the groups it is intended to benefit.

Sen. Lawson, a noted critic of the Department of Education, said he has heard much of the money allocated for education initiatives never reaches the classrooms, which he sees as a symptom of the state placing too much emphasis on a top-down approach where the department dictates policy rather than letting individual teachers and schools determine what works.

“I don’t think throwing more money at it is the solution,” he said. “We’ve done that for years and years and years.”

Gov. Carney has specifically countered accusations the $60 million would simply toss money at an issue, noting districts will have some freedom to use their share as they see fit. Officials also intend to review how effective new programs and services are and work to make sure money is being spent smartly and efficiently, the governor’s office has said.

JFC is scheduled to meet twice more this week and 10 times in February. The committee will then convene again at the end of May to “mark up” the budget, with the goal of having it completed and passed before the fiscal year ends June 30.

There will be headaches on the way, although everyone is hopeful the process is less painful than the past two years, where partisan politics and an inability to find common ground created major impasses and plenty of hard feelings.

While each lawmaker has his or her own views and pet projects, Office of Management and Budget Director Mike Jackson urged JFC to look at the bigger picture and how decisions they make have very real impacts on Delawareans.

“Many look at the budget as though it’s a mathematical exercise, but to be clear about that, there are people behind the numbers,” Mr. Jackson said.

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