Governor signs record $4.7B budget, extra spending

DpOVER – Gov. John Carney signed into law June 30 a record-setting spending package that includes a $4.77 billion operating budget, a $1.3 billion capital bill and a $221 million one-time expenditures measure for Fiscal Year 2022, which begins July 1.

Gov. John Carney signs the Fiscal Year 2022 budget into law on June 30. | PHOTO COURTESY OF THE OFFICE OF THE GOVERNOR

“This has been an incredibly difficult year. We came out of a pandemic and lost hundreds of millions of dollars in revenue,” Carney said to lawmakers during a signing ceremony at Legislative Hall in Dover. “Fortunately, we were set up in a strong position going in, because all of you have bought into our approach to be reasonable on the operating side, set aside reserves and we were able to get through that like no other state in the country.”

Delaware’s flush revenues allowed legislators to expand the spending package by hundreds of millions of dollars. The state’s FY 2022 operating budget outlined in House Bill 250 exceeds the current budget by more than $200 million, a nearly 5% increase. State Sen. Trey Paradee (D-Dover) said Delaware now has $538 million saved in budget stabilization and the state’s “rainy day” fund.

“Even with the turbulence of the past year, we managed to carefully track revenue forecasts and fund much-needed programs and projects, all while keeping budget growth below 5%,” Paradee said in a statement last week, after the bill cleared the legislature.

Notable expenses include $5.2 million to implement a statewide body-worn camera program for police officers, a one-time bonus of $1,000 and a $500 pay raise for all state employees, $20 million to cover projected state employee health insurance costs, and more than $6 million for small business programs such as Delaware Small Business Development Center and Main Street.

The $1.3 billion capital spending plan, outlined in Senate Bill 200, includes $450 million more for infrastructure projects than what Carney had proposed in January due to a surprise surplus.

Carney said Delaware was able to come out of the pandemic “mostly with revenue that’s coming not from our taxpayers, but the taxpayers from outside of our state,” referring to corporate income taxes and franchise fees that ballooned during the pandemic. That significant increase in resources led to a 46% increase in the FY2022 capital budget compared to the previous fiscal year.

Lawmakers said higher-than-anticipated revenue allowed for the additional funds, which will speed the completion of deferred maintenance and capital projects.

A bulk of capital spending – $386 million – will go toward road projects, while $229 million will fund school construction projects throughout Delaware. Other efforts include new family courthouses for Kent and Sussex counties, library upgrades, college campus improvements, state park maintenance and clean water investments.

“This is a responsible, sustainable financial plan that protects taxpayer dollars and invests in the future of our state,” Carney said in a statement about the budget bills. “We’re adding to our budget reserves, so we’ll again be ready if we face a crisis or revenue downturn. And we’re investing in our state workers, who have been on the front lines of the COVID-19 pandemic since Day 1.”

The state is expanding funds for Delaware students as well, including:

• $22 million in additional education Opportunity Funds for students in low-income families and whose first language is not English
• $16 million for student mental health services
• $10.2 million for the Redding Consortium to advance educational equity for students in Wilmington and northern New Castle County.
• $4.3 million toward expansion of SEED and Inspire scholarships

“In this budget, we’re investing more than ever in our classrooms, and in direct services for low-income students and English learners,” Carney said in a recent statement. “These are the children who need our help the most.” The state is also allocating $63 million for the FY2022 grant-in-aid bill, which helps fund police and fire departments, senior centers, and hundreds of nonprofits throughout the state. Under House Bill 265, the funding measure unanimously cleared the legislature on the last day of the 2021 General Assembly.

The grant-in-aid bill is divided into four sections that total just over $63 million:

• Government units and senior centers receive nearly $27.6 million
• One-times funding and community agencies receive just over $28 million
• Fire companies receive just over $7 million
• Veterans organizations receive $431,348

Carney also revived a $10 million business-focused initiative after it was cut from last year’s budget due to an unexpected pandemic-spurred deficit. Senate Bill 127 creates the Site Readiness Fund to provide grants, loans or other economic assistance to businesses or public entities that invest in constructing, renovating, or improving infrastructure for sites that would attract job-creating projects.

Michael Quaranta, president of the Delaware State Chamber of Commerce, called the Site Readiness Fund a “smart, strategic step to take,” especially when considering how it could help companies and developers to consider rehabbing existing properties.

The General Assembly passed SB127, sending the bill to Carney for his consideration.