State of Delaware Presentation to the Institute for Office of the - - PowerPoint PPT Presentation

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State of Delaware Presentation to the Institute for Office of the - - PowerPoint PPT Presentation

Feb 23, 2024 113 likes •365 views

State of Delaware Presentation to the Institute for Office of the Governor Local Government Leaders Fiscal Year 2018 Financial Overview Bert Scoglietti January 12, 2017 November 9, 2017 Agenda FY 2018 Look Back FY 2019

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State of Delaware Office of the Governor

Fiscal Year 2018 Financial Overview

January 12, 2017

Presentation to the Institute for Local Government Leaders Bert Scoglietti November 9, 2017

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Agenda

  • FY 2018 Look Back
  • FY 2019 Budget/Finances
  • Other items affecting local governments

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X X X X X X X

O

Appropriation bills passed/signed. Session completed. “Continuing resolution” June 30

Extended End of Session

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Budget Shortfall: $377 million Revenue package: $182 million Expenditure reductions: $195 million

FY 18 Solution

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General Fund Operating Budget $4,106.9 million Grants-in-Aid $37.2 million Bond and Capital Improvements Act * $590.0 million

  • State Capital Projects……………………..$272.2 million
  • Transportation Projects…………………..$317.8 million

*The FY 2018 Bond bill was supported entirely with new bond authorizations and special funds. No general fund cash was appropriated in the Bond Bill.

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FY 2019 Financial Plan

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Major elements of revenue package…

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Revenue Source Description FY 2018

($ million)

FY 2019

($ million)

Corporate Franchise Create a two-tier maximum tax and true up other rates to reflect inflation. $116.1 $116.1 Realty transfer Increase rate by 1% $45.6 $72.9 Tobacco Increase per pack and OTP

  • rates. Treat e-cigarettes and

moist snuff as OTP. $11.9 $17.8 Alcohol Increase for beer, wine and spirits $5.2 $7.2 Insurance Fees Across the board increase to fees charged by DOI $4.6 $4.6 Estate Tax Eliminates the tax entirely ($3.75) ($5.0)

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…and highlights of the expenditure reductions

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Eliminate 200 FTEs $ (5,000.0) Reduced Senior Property Tax by $100 (5,000.0) Medicaid Savings/Cost Containment (8,075.0) Employee Health (3,600.0) Education Sustainment Fund (11,000.0) 1.5% Reduction to Districts/Charters (15,000.0) Open Space/Farmland (@ 98%) (16,700.0) Grant in Aid reduction (8,645.0) Programmatic/Operational Reductions (18,798.8)

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Five Year Revenue Forecast ($ Millions)

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0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% $3,000.0 $3,200.0 $3,400.0 $3,600.0 $3,800.0 $4,000.0 $4,200.0 $4,400.0 $4,600.0 $4,800.0 FY 17 FY 18 FY 19 FY 20* FY 21* June 2017 DEFAC Sept 2017 DEFAC Year on Year Growth based on Sept DEFAC

*FY 20 and FY 21 June projections are from Sept 2016 DEFAC.

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What does this mean for FY 19?

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  • DEFAC projections showed 5.6% growth from FY

17 to FY 18. BUT, much of this is one time in nature, and realizing the revenue enhancements adopted in June/July.

  • If all of the available resources are built into the base

budget, FY 20 budget would likely require base budget cuts to balance (projected revenue growth from FY 18 to FY 19 is 1.2%).

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What’s Been Driving Growth?

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Numbers reflect changes in actual expenditures from FY 11 - FY 17 91% of spending growth is in four categories: salaries, health care, pension and Medicaid.

Medicaid, 30% Pension, 12% Health Care, 25% Salaries, 24% All Other, 9%

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Cabinet vs District/Charter employee growth

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14,103 16,877 13,007 19,383

12,000 13,000 14,000 15,000 16,000 17,000 18,000 19,000 20,000 Cabinet Agencies Except School Districts School Districts

2009 2017

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Public Ed. Enrollment Growth

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126,271 127,944 130,102 131,029 132,841 134,442 135,517 136,709 120,000 122,500 125,000 127,500 130,000 132,500 135,000 137,500

09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17

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Public Ed. Unit Growth Over Time

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  • 1,000

2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000

09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17

Regular Units Special Ed Units K-3 Basic Basic Intensive Complex

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Driving Growth: Medicaid

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160,018 173,769 193,633 207,067 212,693 217,658 224,198 228,046 230,743 58,750 117,500 176,250 235,000

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Monthly Average

  • f Medicaid Recipients
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Projected demands on FY 19 budget

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  • K-12 enrollment growth.
  • Corrections
  • Retiree health, pension costs, and OECs.
  • Health Care.
  • Restoration of unfunded programs from FY 18.
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Where do I find…..?

Item Location FY 18 Funded FY 19 Request

Municipal Street Aid/Community Transportation Funds Bond Bill, DelDOT $5.0/ $17.68 $5.0/ $17.68 Drainage Bond Bill, DNREC “Resource Conservation and Development”

  • $3.0

Libraries Bond bill, State $4.3 $6.7 Volunteer Fire/Ambulance Grant in Aid $4.7 Fund to Combat Violent Crime Operating budget, DSHS Spec funds SALLE/EIDE/Loc Police Grant in Aid $.5 Water/Wastewater Bond bill, DNREC $1.4 $1.4 Housing Develop Fund Op budget/Bond bill, DSHA $10.0 $10.0 Downtown Development Districts Bond bill, DSHA “Urban Redevelopment” $8.5 $8.5 Bayshore Bond Bill, DNREC $.5 $.5

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Outside issues affecting budget

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HJR 8 (budget smoothing) School Consolidation Task Force Global Health Benchmark Federal Tax/Budget Policy State and Local Funding Task Force

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Moving forward

  • Currently in the middle of budget hearings.

(DelDOT 1:30 today !)

  • DEFAC will meet again in December,

Governor will submit recommended operating and capital budgets January 25

  • Budget will include investments in policy

priorities identified in Action Plan for Delaware and State of the State.

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Timetable – Legislative Budget Development

  • January 29 – February 28 (JFC/Bond Bill

hearings)

  • May 14 – 17 (JFC/Bond Bill hearings)
  • May 21 – 31 (JFC Mark up)
  • June (JFC Mark Up continues, Bond Bill and

Grant in Aid)

  • June 30th (Budget, Bond and Grant-In-Aid

Bill passes the Legislature and Governor signs)

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Other legislation – local effects

  • Leg website and session calendar

– http://legis.Delaware.gov – http://legis.delaware.gov/SessionCalendar

  • Mandates

– Parking, Land use

  • Charter changes
  • Task Forces
  • Changes to certain titles

– Not just 9 and 22

  • Budget/Bond/GIA epilogue
  • Executive Orders

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HR1 – House Tax Reform

  • Among other effects, would:

– Consolidate federal income tax brackets – Raise the standard deduction – Repeal numerous deductions – Reduce the corporate income tax rate – Eliminate private activity bonds

  • Being marked up in committee this week. House

leadership to take it to full House by Thanksgiving.

  • The Senate Finance Committee is expected to

release its proposal this week

  • If enacted, would it violate PAYGO and trigger

automatic sequestrations?

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Other issues

  • Other legislative initiatives:

– Wilmington schools, marijuana legalization, racinos

  • Federal Budget
  • Census
  • Demographics
  • Longer Term Infrastructure issues

– Water – Economic Development

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Conclusions

  • State revenue forecast has improved for the coming
  • year. Continue to focus on addressing needs in

priority areas such as education, job creation, corrections, public safety, and containment of healthcare costs.

  • State needs to avoid committing all available

resources towards the base budget to avoid future cuts.

  • Local governments need to understand budget

timelines through the legislative session and take advantage of opportunities therein

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Questions?