John Carney’s Cult Of Budget-Smoothers Goes After State Employees
OK, kids, a refresher. John Carney, combining the collective wisdom of Ken Simpler, the Concord Coalition and, of course, the Chamber, tried but failed to get the General Assembly to adopt his budget-smoothing proposal.
What is budget-smoothing, you ask?:
Developed by a task force that included Republican Treasurer Ken Simpler and Carney’s Finance Director Rick Geisenberger, House Bill 460 would place a cap on year-to-year spending growth based on a series of economic indicators.
Lawmakers then would be required to evenly split any revenue beyond that benchmark between one-time expenses and a special fund set aside to cover future shortfalls in tight budget years.
Do you notice anything missing from this inflexible formula? If you answered ‘generating sources of additional revenue’, you’re correct. You know, like increased taxes on Delaware’s wealthiest, for example.
The good news is the General Assembly didn’t enact this scheme, and doesn’t appear poised to do so any time soon.
The bad news? Carney has instructed his cabinet and state agencies under his purview to adopt the Carney/Simpler/Chamber plan when putting together their budgets. He did it by Executive Order.
Delaware government employees might have to pay a little more for their health care in a few months. The State Employee Benefits Committee is considering raising premiums for tens of thousands of state workers and their families, although nothing has been decided yet…
…“Any time the state sort of puts off minimal increases because of the financial situation, the problem just compounds and gets worse,” Department of Health and Social Services Deputy Secretary Molly Magarik said…
…”Mr. Jackson, who is tasked with carrying out Gov. John Carney’s financial vision in regard to the state spending plan, would not say Monday which premium option the executive branch prefers…“(a)t this point, we’re looking at you could smooth (the Group Health Insurance Program projected deficit) out over time or you could do nothing and, rather than a 2 percent increase over the next two years, it could be a 4 percent in one year,” Mr. Jackson said.
Or you could generate more revenue to ensure the ongoing solvency of the program. Do any of you know just how many important positions are going unfilled in state government b/c the state does not offer a competitive salary? Do you know that state has changed its overtime formula so that, instead of getting OT at 37.5 hours, it’s now at 40 hours?
Budget-smoothing does not consider the needs of state employees and the services that state employees provide.
But it satisfies its cult members, aka John Carney, Ken Simpler and their, wait for it, ilk.
Will someone please primary Carney’s Concord Coalition ass?
Also note that open enrollment for state employee health care begins now, meaning workers are being asked to pick plans now, but have not been told their premiums may get jacked up above that. This article was the first employees have heard of such changes.
It should also be pointed out that the SEBC, while it has one union rep, does not include representation of the many non-union state employees. This includes many degreed professionals who could make a ton more in the private sector but hang on with the state for stability and excellent benefits.
Just a free tip. Noone works less than 40 hrs, your 37.5 to 40 isn’t going to bring anyone over to your point of view.
40 hours minus your typical 1/2 for lunch 5 days a week=37.5 hours. That’s pretty typical for most employees, not just state employees.
Now, there’s a change which either (a) takes $$’s out or workers’ pockets and/or (b) removes the incentive for people to work the extra hours, even when it’s needed.
My point being that nickel-and-diming state employees means nothing to Carney’s cult who worship at the altar of budget-smoothing.
Thanks for the tip, though.
Mike Ramone is circulating a bill that is a mirror image of the Grover Norquist, Governor Carney HB 460 to impose a balanced budget amendment. Here is the email solicitation for co-sponsors and my reply.
Hello! If you are interested in co-sponsoring this bill, please let me know by noon on Tuesday, 5/14. Thank you. Here is the synopsis:
SYNOPSIS
This Act is the first leg of a Constitutional Amendment reflecting the recommendations of the Advisory Panel to the Delaware Economic and Financial Advisory Council (DEFAC) on Potential Fiscal Controls and Budget Smoothing Mechanisms established as per House Joint Resolution 8 of the 149th General Assembly (Panel). This Act would build upon the State’s existing appropriation limit methodology by moving the Budget Reserve Account into a newly defined Budget Stabilization Fund, defining rules for deposits to and withdrawals from said Budget Stabilization Fund, and adding a check of the appropriation limit against an index comprised of relevant indicators of growth of the State’s economy. The Panel further recommended that any final adoption of the structural budget reforms included in this Act be accompanied by statutory enactment of structural reforms to the Personal Income Tax by broadening the tax base as initially recommended by the DEFAC Advisory Council of Revenues report dated May 2015 and further detailed in the Panel’s report dated June 1, 2018.
“Since this bill is very similar to last years “Budget Smoothing” attempt I will not be adding my name and will advise all to oppose this legislation”.
Representative John Kowalko
SPONSOR: Rep. Ramone & Rep. D. Short & Sen. Delcollo &
Sen. Hocker
HOUSE OF REPRESENTATIVES
150th GENERAL ASSEMBLY
HOUSE BILL
AN ACT PROPOSING AN AMENDMENT TO ARTICLE VIII, § 6 OF THE DELAWARE CONSTITUTION
RELATING TO LIMITATIONS ON APPROPRIATIONS.
1 WHEREAS, the 149th Delaware General Assembly enacted and the Governor of Delaware signed House Joint
2 Resolution 8 creating an Advisory Panel to the Delaware Economic and Financial Advisory Council on Potential Fiscal
3 Controls and Budget Smoothing Mechanisms (Panel); and
4 WHEREAS, the Panel convened and recommended 1) redefining the State’s appropriation method and building on
5 current fiscal controls, 2) repurposing the Budget Reserve Account into a Budget Stabilization Fund, and 3) reforming the
6 Personal Income Tax to broaden the tax base; and
7 WHEREAS, it is the intent of the General Assembly in adopting this Constitutional Amendment to redefine the
8 State’s appropriation method, build on current fiscal controls and repurpose the Budget Reserve Account into a Budget
9 Stabilization Fund; and
10 WHEREAS, it is the intent of the General Assembly in the final adoption of this Constitutional Amendment that it
11 be accompanied by legislation reforming the Personal Income Tax by broadening the tax base as detailed in the final report
12 of the Panel.
13 NOW, THEREFORE:
14 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (Two-thirds of all
15 members elected to each house thereof concurring therein):
16 Section 1. Amend Article VIII, § 6 of the Delaware Constitution by making deletions as shown by strike through
17 and insertions as shown by underline as follows:
18 § 6. Procedure in withdrawal and payment of public moneys; annual publications of receipts and expenditures.
19 Section 6.(a) No money shall be drawn from the treasury but pursuant to an appropriation made by Act of the
20 General Assembly; provided, however, that the compensation of the members of the General Assembly and all expenses
21 connected with the session thereof may be paid out of the treasury pursuant to resolution in that behalf; a regular account of
22 the receipts and expenditures of all public money shall be published annually.
Page 2 of 4
HR : RDS : AFJ
0401500008
Draft: 01/10/2019 12:28 PM
23 (b) No appropriation, supplemental appropriation or budget act shall cause the aggregate State General Fund
24 appropriations enacted for any given fiscal year to exceed the sum of 98 percent of the estimated State General Fund
25 revenue for such fiscal year from all sources, including estimated unencumbered funds remaining at the end of the previous
26 fiscal year (the “98 percent limit”), plus funds available for withdrawal from the Budget Stabilization Fund as determined in
27 subsection (f) of this section. An act approved pursuant to § 3 of this article shall not be considered an appropriation for the
28 purpose of this section. Estimated unencumbered funds are calculated by taking the estimated General Fund cash balance at
29 the end of the fiscal year less estimated revenue anticipation bonds or notes, estimated encumbrances, estimated continuing
30 appropriations and the amount of the Budget Reserve Account Budget Stabilization Fund as established in subsection (d) of
31 this section at the end of said fiscal year. The amount of said revenue estimate, and estimated unencumbered funds
32 remaining, and funds available for withdrawal from the Budget Stabilization Fund shall be determined by the most recent
33 joint resolution approved from time to time by a majority of the members elected to each House of the General Assembly
34 and signed by the Governor.
35 (c) Notwithstanding subsection (b) of this section, any portion of the amount between 98 and 100 percent of the
36 estimated State General Fund revenue for any fiscal year as estimated in accordance with subsection (b) of this section may
37 be appropriated in any given fiscal year in the event of an emergency emergencies involving the health, safety or welfare of
38 the citizens of the State, such appropriations to be approved by three-fifths of the members elected to each House of the
39 General Assembly.
40 (d) There is hereby established a Budget Reserve Account Budget Stabilization Fund within the General Fund. The
41 Budget Stabilization Fund shall include the balance of funds existing in the predecessor Budget Reserve Account as of the
42 effective date of this section. Deposits to and withdrawals from the Budget Stabilization Fund shall follow the rules
43 established in subsection (f) of this section subject to the limitations set forth in subsection (g) of this section. Within 45
44 days after the end of any fiscal year, the excess of any unencumbered funds remaining from the said fiscal year shall be
45 paid into the Budget Reserve Account, provided, however, that no such payment will be made which would increase the
46 total of the Budget Reserve Account to more than 5 percent of only the estimated State General Fund revenues as set by
47 subsection (b) of this section. The excess of any unencumbered funds shall be determined by subtracting from the actual
48 unencumbered funds at the end of any fiscal year an amount which together with the latest estimated revenues is necessary
49 to fund the ensuing fiscal year’s General Fund budget including the required estimated General Fund supplemental and
50 automatic appropriations for said ensuing fiscal year less estimated reversions. Notwithstanding subsections (f)(2), (f)(3),
51 and (g)(2) of this section, the The General Assembly by a three-fifths vote of the members elected to each House, may
52 appropriate from the Budget Reserve Account Budget Stabilization Fund such additional sums as may be necessary to fund
Page 3 of 4
HR : RDS : AFJ
0401500008
Draft: 01/10/2019 12:28 PM
53 any unanticipated deficit in any given fiscal year or to provide funds required as a result of any revenue reduction enacted
54 by the General Assembly. address a severe economic downturn or an emergency involving the health, safety or welfare of
55 the citizens of the State.
56 (e) There is hereby established a Benchmark Appropriation, to be calculated for any given fiscal year as the sum of
57 (1) the product of (x) the Benchmark Index for such fiscal year and (y) the sum of the previous fiscal year’s budget act and
58 appropriations for grants-in-aid, plus (2) an amount not to exceed 1 percent of the previous fiscal year’s budget act, but only
59 to the extent that such amount is directed as a supplemental appropriation to the bond and capital improvements act for such
60 fiscal year. The Benchmark Index shall be comprised of relevant indicators of growth in the State’s economy and may be
61 periodically revised by statute approved by three-fifths of the members elected to each House of the General Assembly.
62 Initially, the Benchmark Index for any given fiscal year shall be comprised of equal weightings of the three year average of:
63 (1) Delaware personal income growth and
64 (2) Delaware population growth plus the growth in the implicit price deflator for state and local
65 government purchases.
66 (f) Deposits to and appropriations and withdrawals from the Budget Stabilization Fund are authorized as follows:
67 (1) Whenever the 98 percent limit for any given fiscal year is more than the Benchmark Appropriation for
68 such fiscal year, 50 percent of such excess shall be deposited to the Budget Stabilization Fund and up to 50 percent
69 of such excess may be appropriated for non-recurring expenditures and reductions in long-term liabilities.
70 (2) Whenever the 98 percent limit for any given fiscal year is less than the Benchmark Appropriation for
71 such fiscal year, up to 50 percent of such difference may be appropriated from the Budget Stabilization Fund.
72 (3) Whenever General Fund expenditures for any given fiscal year are estimated to exceed revenues for
73 such fiscal year by more than 2 percent of the estimated State General Fund revenue for such fiscal year from all
74 sources, including estimated unencumbered funds remaining at the end of the previous fiscal year, up to 50 percent
75 of such difference may be withdrawn from the Budget Stabilization Fund.
76 (g) Notwithstanding subsections (d) and (f) of this section, deposits to and appropriations and withdrawals from
77 the Budget Stabilization Fund shall be limited as follows:
78 (1) No deposit shall be made that would increase the balance of the Budget Stabilization Fund to more
79 than 10 percent of only the estimated State General Fund revenues as determined pursuant to subsection (b) of this
80 section. Any deposit (or portion thereof) required by subsection (f)(1) that would exceed such level may be
81 appropriated for any purpose.
Page 4 of 4
HR : RDS : AFJ
0401500008
Draft: 01/10/2019 12:28 PM
82 (2) Appropriations and withdrawals from the Budget Stabilization Fund for any given fiscal year shall be limited
83 to the extent that such amounts would either exceed 50 percent of the balance of the Budget Stabilization Fund or reduce
84 the balance of the Budget Stabilization Fund to less than 3 percent of only the estimated State General Fund revenues as
85 determined pursuant to subsection (b).
SYNOPSIS
This Act is the first leg of a Constitutional Amendment reflecting the recommendations of the Advisory Panel to
the Delaware Economic and Financial Advisory Council (DEFAC) on Potential Fiscal Controls and Budget Smoothing
Mechanisms established as per House Joint Resolution 8 of the 149th General Assembly (Panel). This Act would build
upon the State’s existing appropriation limit methodology by moving the Budget Reserve Account into a newly defined
Budget Stabilization Fund, defining rules for deposits to and withdrawals from said Budget Stabilization Fund, and adding
a check of the appropriation limit against an index comprised of relevant indicators of growth of the State’s economy. The
Panel further recommended that any final adoption of the structural budget reforms included in this Act be accompanied by
statutory enactment of structural reforms to the Personal Income Tax by broadening the tax base as initially recommended
by the DEFAC Advisory Council of Revenues report dated May 2015 and further detailed in the Panel’s report dated June
1, 2018
It speaks volumes that Rethuglicans are pushing Green Eyeshade Carney’s vision for budget-smoothing. They know that it’s just a mechanism, I mean gimmick, to screw those who need government services the most.
Carney really is clueless. And he’s not a fucking Democrat. Neither is any ‘D’ who signs on to this bill.
He comes off as completely helpless in person. He has no sense of agency and gives the impression of being a victim of circumstances. Which makes sense I guess because he is basically the product of circumstances.
State employees aways whine about EVERYTHING and the Delaware financial and economic nightmare continues thanks to Democrats.
There is no financial nightmare. There is plenty of money at the top. We are just too chickenshit to collect it.