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Delaware businesses begin to draw lobbying lines

Delaware Public Media

State lawmakers looking to solve what has become a perennial revenue problem are getting another push from Delaware’s business community.

The Delaware Business Roundtable, a group of CEOs that employ more than 75,000 in the state, commissioned a study that projects steep budget problems barring any public policy changes.

The report by Capitol Matrix Consulting suggests laying off state workers over time, cutting money spent on prisoners and charging public employees and retirees more for their health benefits to help curb rising costs.

They project 4.0 percent in annual operating budget growth – 1.1 percent of which is solely attributed to expected ballooning costs from Medicaid benefits – leading to a $600 million problem in ten years. The report also notes that the state has a "strong track record" on year-to-year budget management and that, "Based on Delaware’s history of strong budget management, it is likely that the state will take prompt action to offset emerging shortfalls before they occur."

Still, lawmakers have been trying to address similar grim projections for the past year, though much of it didn't take shape until the gavel fell for the final time this year.

Newark Democrat Rep. Paul Baumbach says it’s “no longer clear” that the General Assembly can necessarily meet the revenue challenges facing the state.

“We punted on a $60 million deficit. We’ve got a $160 million deficit in the upcoming year. There’s been no constructive movement on that," Baumbach said.

It took leaders from both parties in the House and Senate until the waning moments of June 30 to strike a transportation funding deal while dropping work on addressing the state’s funding sources.

Republicans are looking to pair this report with recommendations from a soon-to-be formed task force that will examine state spending to craft their economic policy for January. Many, including Sen. Ernie Lopez (R-Lewes), have said they'd prefer to avoid late-night horse-trading.

“I think we all hope not," said Lopez. "But that being said, this is the time to be doing the math and these two guides, between the spending task force and this report now are really going to be the guides going forward.”

Democrats began forming some potential solutions this past spring, including creating new personal income tax brackets for wealthier earners.

Nonpartisan proposals offered up include tweaking different tax rates among Delaware's revenue streams to better respond to growth in the economy. A roadmap outlining those changes was issued in May by a state task force, but was never acted upon.

Most any plan will require Republican input to gain approval, as Senate Democrats no longer have the super majority needed to modify tax rates.

That state spending task force backed by Gov. Jack Markell (D) is expected to take shape in the coming weeks.

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