- Associated Press - Saturday, June 30, 2018

DOVER, Del. (AP) - Democratic Gov. John Carney said Saturday that his administration plans to adopt new fiscal restraints in developing proposed budgets to recommend to the legislature.

On the final day of this year’s legislative session, Carney signed an executive order directing the state budget office and the panel that sets Delaware’s official revenue forecast to adhere to certain rules using a benchmark index of various economic indicators, which would be used to calculate an advisory benchmark appropriation.

Carney signed the order after Democratic leaders in the General Assembly indicated that they would not consider a proposed “budget smoothing” constitutional amendment, as recommended by an advisory committee of the Delaware Economic and Financial Advisory Council, which issues official revenue projections.

The amendment would have required use of the index to limit year-over-year spending growth. A portion of any funds exceeding the cap would be set aside to cover future shortfalls in lean budget years, with the other portion available only for one-time expenditures.

“As every Delaware family knows, you’re supposed to save some of your money during the good times so you can make it through when money gets tight,” Carney said. “This executive order holds state government to the same standard.”



DEFAC chairman Michael Houghton said a budget-smoothing approach would help the state avoid “feast or famine” fiscal cycles based on wide swings in revenue collections.

Houghton said Carney’s executive order implements certain budget principles and mechanisms while not usurping the authority of the legislature, which controls the state’s purse strings.

“It doesn’t purport to do that which has to be done through a constitutional amendment, but in the absence of legislation this year, it is as far as I think this governor, this administration, can go to implement this mechanism,” Houghton said.

House Speaker Pete Schwartzkopf, D-Rehoboth, said he had not read Carney’s order but that issuing one is the governor’s prerogative.

“But if he’s only talking about the recommended budget for next year, that’s all on him anyway,” Schwartzkopf said.

Senate Republicans praised Carney’s embrace of budget reforms.

“While attempts were made by the governor during this year’s budget process to rein in the General Assembly, the state will still spend nearly 10 percent more next year than we did this year,” the Senate GOP caucus said in a prepared statement. “This is unwise and unsustainable, but we are hopeful that the commitments made by the governor today will result in a better budgeting process as we move forward.”

Republican House Minority Leader Danny Short said he was disappointed that majority Democrats prevented the proposed constitutional amendment from being debated in either chamber.

“Twice in the last eight years, Delaware experienced the largest budgetary shortfalls in its history,” Short noted. “We have also witnessed windfalls during this span. These boom-and-bust cycles are indicative of basic flaws inherent in our system.”

Short said Carney’s order is well intentioned but is binding only on the executive branch and will not prevent legislative budget writers from disregarding it.

“The General Assembly’s leadership has failed in its obligations to our citizens and has squandered a prime opportunity to alter our financial processes in a way that would have provided more predictability, accountability, and stability for state government and the citizens it serves,” Short said.

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