- Associated Press - Friday, December 2, 2016

WILMINGTON, Del. (AP) - Governor-elect John Carney is anxious to get to work tackling Delaware’s thorny budget problems, but he’s having trouble enlisting a key aide to help him do so.

After being elected last month, Carney said he wanted to get a new budget director and finance team in place sooner rather than later.

“I’m having a little trouble with that at the moment,” Carney acknowledged this week in an interview with The Associated Press.

The Democrat, who takes office in January, is looking in-state for a budget director who is experienced in Delaware government and who understands the details and machinations of cobbling together a spending plan each year.

“Your budget director ideally would really have that in-the-weeds expertise and experience,” he said.

“There’s going to be a bigger commitment to cost containment and operational efficiency that I’d like to have that person lead beyond just doing the annual budget cycle,” Carney added.

But just dealing with the annual budget could be a Herculean effort in itself.

The most recent state projections show zero revenue growth over the next year, meaning that if officials simply wanted to match this year’s budget next year, with no cost increases, they would be facing a $167 million shortfall. Assuming typical budget growth of about 3 percent, along with cost drivers for programs such public education and health and social services, the shortfall is closer to $329 million, according to Democratic Gov. Jack Markell’s budget office.

Carney said Markell, who faced an $800 million shortfall when he took office on the heels of the 2008 financial crisis, has told him that balancing the budget could be just as difficult next year.

“They had different pots, different things that they could go to,” Carney said, referring to one-time revenue sources that former budget director Pete Ross compared to “rabbits that you pulled out of the hat.”

“They’ve exhausted all those,” he said.

Carney has called for a complete “budget reset” that includes closely scrutinizing both state spending and the government’s revenue portfolio.

“When you look for cost savings, you have to go where the money is … Public ed is where all the money is, and health care,” he noted.

Meanwhile, Carney has expressed concern about the state’s reliance on abandoned property collections, a key revenue source that has been the subject of several federal lawsuits. Delaware is also facing increased competition for gambling revenue from new casinos in Maryland.

Carney did not rule out proposing tax or fee increases to balance next year’s budget.

“We’ll see,” said Carney.

“We have to submit a balanced budget,” said Carney, who fully expected the budget to be a source of contention. “I suspect that unless we can come up with the cost reductions or the cuts that there will have to be some.”

LOAD COMMENTS ()

 

Click to Read More

Click to Hide