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Minner Budget Leaves Much Work to Successor

Fri January 30, 2009 - Northeast Edition

DOVER, Del. (AP) Gov. Ruth Ann Minner’s proposed budget for the upcoming fiscal year represents significant belt-tightening but still leaves her successor and Delaware lawmakers the task of finding at least $367 million in cost savings or new revenue.

Minner on Jan. 15 proposed an operating budget of slightly more than $3 billion for the fiscal year starting July 1 — 9 percent smaller than the current year’s budget.

Budget officials have identified some $190 million in savings in response to revenue estimates for next year that have fallen $456 million since June. To close the rest of the gap, the Minner administration is simply offering Gov.-elect Jack Markell and the legislature a “framework’’ from which to work.

“The operating and capital budgets I present today have been prepared during a significant downturn in our nation’s economy,’’ Minner said. “The state of Delaware is experiencing the impacts of this downturn through dramatic decreases in revenue and increases in the demands for core state services. These factors have created financial challenges that must be addressed in the coming year.’’

The framework offered by the administration for solving the budget crisis suggests that state agencies come up with an additional $51 million in non-personnel spending reductions, and that lawmakers and the new administration identify $127 million in personnel-related cost savings. Minner’s recommendations also include $99 million in unspecified health and social service cost reductions, $53 million in unspecified public education cuts, and $36 million in unspecified savings from government re-engineering and higher education.

“I wouldn’t say it’s passing the buck; I’d say it’s recognizing the difficulty of the challenges we face,’’ said acting state budget director Michael Jackson. “I think we’ve done some heavy lifting.’’

Markell said that Minner’s budget proposal “is further proof that we are living in incredibly tough economic times.’’

“With the difficult times facing all Delawareans, we need to be focused now on cutting back on state government, not raising taxes,’’ Markell added.

Jackson noted that officials still must find at least $109 million in current year budget cuts just to balance the books for the fiscal year ending June 30. Official have set a goal of about $160 million in additional cuts for this year to provide a $50 million safety cushion in the event that revenue estimates continue to drop.

“There’s no easy choices that remain,’’ Jackson said, noting that the economic downturn affecting Delaware and most other state’s leads to greater demand for state services, including Medicaid, unemployment insurance and other assistance programs.

Meanwhile, Minner’s proposed capital budget is the smallest in 15 years, totaling $344 million. That is significantly less than the $474 million she proposed last year, and a whopping 43 percent less than the capital budget that was eventually approved by lawmakers for the current year.

The proposed capital budget includes $185 million for transportation-related projects and $159 million for other construction, with roughly half of that amount targeted at public school projects.

The state’s traditional grant package to volunteer fire companies and other nonprofits totals about $41 million, down from last year’s $58.4 million proposal, which was whittled down by lawmakers to about $45 million.

“Nearly every grant-in-aid program is receiving a 15 percent reduction,’’ Jackson said.

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