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Senate GOP publicly calls for budget changes amid backroom negotiations

Delaware Public Media

About a month after Gov. John Carney (D-Delaware) released his proposed budget, Senate Republicans are offering their own take.

The group of 10 GOP lawmakers is championing a significant change to how Delaware legislators currently spend taxpayer money.

In essence, they want to tie spending to some kind of benchmark – like a percentage of economic growth. Any extra money would get funneled into a rainy day fund to help ride out leaner years.

Right now, lawmakers basically use the prior year’s budget as a blueprint and build off of it.

There are plenty of automatic spending increases tacked on, too, like hiring more teachers and giving educators yearly pay raises based on their years of service.

Without addressing such underlying cost drivers, Senate Minority Whip Greg Lavelle (R-Sharpley) says Carney’s budget simply adds yet another patch to a beat up tire.

“With all due respect to the governor and my Democrat colleagues, their proposal kicks the can down the road, doesn’t make any structural reforms and we’ll be right here, surprisingly, after the 2018 election, doing this again,” Lavelle said.

He wouldn’t say whether he’d support the Democrats’ proposed tax increases.

Carney’s plan boasts an even mix of spending cuts and tax hikes to try and backfill a projected $396 million shortfall.

It relies on increases to each bracket of the personal income tax, raising the eligibility age for senior citizen tax credits and boosting franchise fees for the world’s biggest businesses.

State employees could also have to pay more for their generous health benefits, saving taxpayers $6.5 million next year.

But those aren’t significant enough for Lavelle.

“There is no systemic or structural change in this bill and it continues unabated and I’m not sure why we would participate in a false solution because that’s what it is,” he said.

Medicaid has been a perennial flashpoint among budget hawks.

The state and federal health insurance partnership weighs in at $767 million in the current year, with nearly $12 million needed next year to cover low-income and indigent people who have applied.

Carney proposed cutting child dental reimbursements in Medicaid, which Lavelle says it’s a good start.

But his caucus wants significant reforms to avoid digging a deeper hole. Medicaid recipients in Indiana, for example, have to chip in a few dollars for their coverage, based on their income.

“The shovels are getting bigger. There’s no stopping taking place. So to look at what some of what those other states have done to try to manage their Medicaid budget, because if you don’t, we won’t,” Lavelle said.

The party is also calling for the complete gutting of prevailing wage. Laborers and skilled workers are paid based on wage surveys sent to contractors by the state Department of Labor, which Republicans have said are far too high for years. 

Those infrastructure projects using prevailing wage are paid through Delaware's capital budget, which is a separate pot of money that is not facing a projected shortfall.

Carney's office didn't immediately respond to a request for comment on the GOP's suggestions.

All of this talk comes at a time when Democrat and Republican leaders from both chambers are meeting behind closed doors to find some compromise in one of the roughest recent budget years.

“I think there’s a general feeling that we all know we’re in a bad spot and we’re going to have to work together and we can’t fix this by ourselves, independently. We have to do it as a group,” said House Speaker Pete Schwartzkopf (D-Rehoboth Beach), who declined to comment directly on the Republicans’ plan.

Instead, he says he’s cautiously optimistic these backroom talks will crack the partisan divide.

Similar negotiations spawned a deal on a five-year infrastructure package in 2015, despite Republicans walking away from the table until June 30th.

Now, Schwartzkopf says they’re trying to finalize a deal much earlier, using the second to last state revenue forecast.

“In the past, we’ve tried to wait until the June DEFAC numbers hoping for a miracle, but at that point it’s too late,” he said.

That’s an attempt to give the Joint Finance Committee time to punch in the significant changes while making their own budget tweaks after the following report.

Rep. Mike Ramone (R-Middle Run Valley), who sits on JFC, says he agrees with his party’s line that most, if not all, of this projected shortfall can be made up by cuts, but that it’s not happening this year.

“I believe there is enough room to make enough cuts to offset this, but reality dictates we haven’t given ourselves enough time to do that in an adequate way to address what we need to address,” Ramone said.

The next revenue forecast will be released May 15, with a plan from both parties expected soon after.