- Associated Press - Tuesday, May 20, 2014

DOVER, Del. (AP) - The legislature’s budget writing committee unanimously recommended a pay raise Tuesday for most state employees despite a $41 million gap between projected revenue and Gov. Jack Markell’s proposed spending plan for the next fiscal year.

Members of the Joint Finance Committee voted to approve a $500 pay increase for most state employees effective Jan. 1. Overall personnel costs, including pension contributions and adjustments to teacher pay, would increase by about $22 million over the current year.

That’s about $11 million less than the $33 million in additional personnel costs in Markell’s January budget proposal, which included a 1 percent pay raise for state employees.

Committee co-chair Sen. Harris McDowell III, D-Wilmington, expressed “heartache” at not being able to pursue a larger pay hike for state workers.

State revenue estimates have declined significantly since Markell unveiled his budget proposal, dropping by $181 million since December for the current fiscal year, which ends June 30. Even with state agencies reverting $104 million in unspent money to the general fund, administration budget officials still must close a $13.1 million deficit for the current year in the next few weeks.

Meanwhile, budget director Ann Visalli told lawmakers that the administration has come up with $37 million in cuts from Markell’s proposed 43.8 billion budget to help them through the mark-up process. She refused to provide a detailed list of the administration’s proposed cuts.

Even if the committee approves all those revisions, and revenue estimates do not decline further next month, lawmakers are still left with a $14 million gap to close.

“We’ve got a tough job ahead of us,” McDowell said.

Despite the tight fiscal situation, Sen. Brian Bushweller, D-Dover, reminded fellow committee members of a proposed financial bailout for Delaware’s three casinos that could cost the state more than $20 million annually, including $10 million in the upcoming fiscal year.

“I did think it was important to get this issue out on the table,” said Bushweller, chief sponsor of the casino relief bill, which is supported by the Markell administration.

Delaware casinos say they are struggling because of competition from neighboring states and the amount of gambling revenue that goes to Delaware’s general fund.

But committee co-chair Rep. Melanie George Smith, D-Bear, indicated that the proposed casino bailout has little chance of passage.

“We need to do what’s in the best interest of the state, and at this point everyone can see that there’s just not the money there,” she said.