Budget blows through Senate; bit slower in the House

Sen. Trey Paradee of Dover, standing in the back, details the2025 budget before a unanimous vote to adopt it.

The 2025 Delaware state budget quickly passed the Senate Thursday afternoon and the House in the evening.

The $6.1 billion budget, outlined in Senate Bill 325 , goes into effect July 1, and likely will be signed into law next week by Gov. John Carney before the session ends.

Quick budget approval hasn’t always been the case in the General Assembly. Battles over the budget and other bills often lasted well into the night on June 30, the final day of the session.

In recent years, though, it’s arrived and been passed with little dissention during the penultimate week.

In the Senate, the only whiff of concern came when Sen. Dave Lawson, R- Marydel, asked if the budget was exactly as it had been passed by the Joint Finance Committee.

That bipartisan group starts with the governor’s suggested budget to create the final version.

Sen. Trey Paradee, D-Dover, the chairman of the Joint Finance Committee and sponsor of SB 35, assured him it was.

“Once markup is done and we’ve all agreed, you know there’s no making changes at that point, unless of course, we were to call the Joint Finance Committee back in,” he said.

In the House, Rep. Lyndon Yearick, R-Camden, thanks Rep. Kim Williams, D-Marshallton, for co-chairing the Joint Finance Committee.

“It’s a competition for resources and competition that is very challenging at times,” he said.

But, he pointed out, the 2025 budget is 9.3% higher than 2024’s. In two years, he said, the state’s operating budget spending has increased by more than $1 billion, a 20% increase, while the state’s gross domestic product is growing at about 1%.

“The budget broke the $5 billion mark for the first time in fiscal year 2023, and the new one smashes through the $6 billion ceiling,” he said.

SB 325 includes a lot of good things, he said.

“I’m challenged to see how we’re going to be able to keep that pace of spending up with an economy that struggling to grow,” he said. “Revenues have now started to slow down from all-time high, but they continue to grow 20% in two years. I find it very challenging that we’re gonna be able to keep that pace without some very serious discussions in regard to how we’re going to acquire additional revenue because we’ve never really found any way to quench our insatiable appetite to spend. ”

The budget passed the bill 38-3, with Yearick; Rep. Rep. Rich Collins, R-Milsboro; and Rep. Bryan Shupe, R-Milford voting no.

RELATED STORY: State budget, one-time spending bills filed in Senate

Budget details

Medicaid and employee expenses drove the budget, he said.

Paradee pointed out that this bill is the third in a row to make “significant investments” with another $95 million for pay increases for the state workforce.

“That is mission No. 1 here,” he said. “You know our job as a government is to make sure that we have a functioning government. You have to have all the employees. You have to have all the employees. You have to attract and retain quality people to run our government and provide essential services that our citizens depend on.”

Merit employees will be receiving a 2% increase. Education employees receive a minimum 2% raise, but teachers, nurses and non administrator classroom staff will receive additional increases as recommended by the Public Education Compensation Committee.

“We added over 332 million to cover the state share of state employee and state retiree health insurance premiums to ensure existing health benefits remain intact,” he said. “When we get to the one time supplemental … I will talk about how we’re investing over $100 million in our retirees and their pension system and in health care.”

The budget will add more than $94 million to cover inflation, volume increases and statewide Medicaid service needs.

It includes $7 million for long term care skilled nursing facilities, leveraging $10.5 million in federal funds, and $3 million to increase home health and personal care Medicaid reimbursement. Another $3.4 million is directed towards increasing compensation for direct support professionals.

Schools will see $39 million to cover projected growth, $70 million to continue increasing mental health supports and $10 million in opportunity funding for low income and multilingual learners.

Delaware will put another $10.3 million into purchase of care payments made to child care providers to enable more low-income workers to stay on the job because they have childcare.

Other education money includes $3.5 million to add 204 Pre K seats; $3 million for 20 early literacy coaches; and $4.4 million towards school transportation raising bus driver pay to $25 an hour.

It also includes $3.3 million for the Seed Scholarship program at Del Tech and the University of Delaware, $2.1 million for the Inspire scholarship at DSU; $5 million added for operations at DSU to help with its expansion and additional costs brought on by the Wesley acquisition; $2.5 million added for First State Promise Scholarship at UD; and $1.2 million to expand Del Tech’s nursing program.

“Because as all of us know, we as a state have a serious issue with a lack of nurses, a lack of teachers and we need more young people also entering the law enforcement profession,” he said.

Legislators and citizens of the future are one day going to look back at the last few years in Delaware, when it enjoyed surpluses of nearly $1 million and put a lot of that toward one-time projects, making investments in capital needs.

“People will look back at this time and say you know what, what an incredible opportunity,” Paradee said. “And I think all of us who have served on JMC, who served on bond, and certainly the governor and his staff should really take pride in the investments that we’ve been able to do with the roads, schools, bridges, courthouses, you name it. Being able to support some of our nonprofit partners with capital project money. I mean, it’s really been an incredible time.”

The 2025 budget also will make efforts to keep the state budget sustainable in the future.

It’s an important point since the General Assembly had 190 bills filed with fiscal notes, an indication of a proposal that requires funding every year into the future.

Paradee said the budget would put another $50 million into the budget smoothing fund, helping it rise to $460 million from $410 million; and raise the state’s rainy day fund from $328 million to $347.8 million.

With all of that, the state will spend $427 million on its bond bill.

Even with extra revenue, the Joint Finance Committee still had to make tough decisions, Paradee said.

“I know that there’s a lot of folks in this room that are disappointed because this building didn’t get funded or that building didn’t get funded,” He said. “It doesn’t mean they weren’t wonderful ideas and that we all didn’t want to do them. There just wasn’t enough space and, and I hope next year that some of those ideas come back.”

The 2025 budget bill was one of four passed by the Senate Thursday.

Two simply estimated the revenues for fiscal year 2024, which ends June 30, and fiscal year 2025, which begins July 1. They are important, because the legislature builds its budgets according to those estimates.

Senate Joint Resolution 9 estimated the gross general fund revenue for 2024 as $6.9 billion with refunds at $543.3 million, net general fund revenue at $6.4 billion and estimated unencumbered funds are $745.5 million.

Senate Joint Resolution 10 estimated the gross general fund revenue for fiscal year 2025 at $6.97 billion, refunds at $524.8 million, net general fund revenue at $6.5 billion and unencumbered funds are $573.5 million.

Senate Bill 326, also sponsored by Paradee, is a one-time supplemental bill for the Office of Management and Budget.

Among other things, it will put $56 million into the Other Post Benefits fund to help ensure future retiree needs. OPEB is woefully underfunded and the state has started to invest money in it.

The bill will give state employees who have been on a pension for a while a little bump. People who have been retired for five to 20 years will get a 1% increase and those retired for more than 20 will get a 2% increase.

SB 326 includes $8 million for primary and general elections; $3.5 million for residential and childhood lead prevention and remediation; $10.4 million in one time money to help cover increased Medicaid costs.

The state will also put $250 million toward a voluntary pilot program that will allow students to place their cell phones in a locked pouch at the start of the school day. The students will be able to keep the phones, but not open them.

Paradee said other states have tried that, and it resulted in better classroom behavior and test scores, among other things.

The program will require schools to apply for the money to pay for the pouches, he said. They are the same kind that are now used at a lot of concerts, he said.

“So maybe this is a first step,” Paradee said.