State budget, one-time spending bills filed in Senate

The General Assembly committee that creates the state budget has filed two bills, and the Senate is expected to vote on them Thursday. Photo by Karolina Kaboompics/Pexels

The state’s $6.1 billion budget and a $168 million budget of one-time expenditures will cover raises for state employees, rises in healthcare costs for employees, state retirees and Medicaid recipients, an increase for some direct support professionals and help for low-income families who need childcare to work.

The Senate is expected to vote on the bills Thursday.

“The spending plan we put forward today is a responsible, balanced budget that reflects Delaware’s solid economic growth over the last year,” said Sen. Trey Paradee, chair of the bipartisan Joint Finance Committee and the prime sponsor of both spending bills.

Trey Paradee

“That expansion will allow us to continue making critical investments in our schools, our health and the public services our communities depend on, all without raising a single tax for the seventh straight year,” he said. “I want to thank my colleagues on the Joint Finance Committee for their diligence, their hard work and their conviction that building a strong future for all Delawareans demands that we stay competitive in the hunt for skilled labor through a strong job market and growing competition from our neighboring states.”

Republicans in the General Assembly, who have argued that the state should lower the real estate transfer tax and others because of four years of big surpluses, aren’t particularly thrilled at the rapid growth of Delaware’s budget. They have repeatedly pointed out that the Democrat-dominated legislature is creating too many programs that the state will have to fund every year going forward. “Our annual spending plan has grown significantly in recent years,” said House Minority Whip Lyndon Yearick, R-Camden. “The FY 2025 operating budget, taking effect July 1, is $523 million (9.3%) higher than the one it’s replacing. In just two years, the state’s annual operational spending has increased by more than $1 billion, a 20.2% jump. “The budget broke the $5 billion mark for the first time in FY 2023 and the new one smashes through the $6 billion ceiling.  The new appropriations bill contains a lot of needed expenditures and worthy initiatives, but this breakneck pace of spending growth is as unsustainable as it is concerning.”

Lyndon Yearick

The budget also is putting contingency funds into budget smoothing accounts in case of future economic downturns from disrupting core state services.

The Delaware Economic Financial Advisory Committee has been warning for a year that 2025 revenues will be down for a variety of reasons, but are expect to rise again in 2026.

A $50 million allocation intended to help cover future raises for educators, as part of the Delaware General Assembly’s ongoing effort to bring base starting salaries to $60,000, included in the 2025 budget. A state budget starts in January, when the governor releases his version. The Joint Finance Committee then reviews the governor’s ideas, holds public hearings on requests from state departments and other funded agencies. State officials, lawmakers and the public weigh in on, and the committee has to account for any programs created by the sitting legislators. State law requires the next year’s budget, which takes effect July 1, to be passed before the General Assembly ends its session each year on June 30. In the last few years, it’s been passed well before that. Senate Bill 325 , the operating budget bill, would fund a third year of state employee pay raises with all merit employees slated to receive a 2% increase. Negotiated collective bargaining units and statutory step increases also would be fully funded.

Some budget details

The 2% raise proposed for teachers and specialists will give those educators an 11% increase in base salary over the last two years, as recommended by the Delaware Public Education Compensation Committee . The base pay for paraprofessionals, custodians, secretaries, bus drivers and food service workers will have increased by 6-18% during the same period, depending on their job classification. Meanwhile, Senate Bill 326 , the one-time supplemental budget, would fund cost-of-living increases of up to 2% for most State of Delaware pensioners, depending on their retirement date. “I’m proud of this budget and what it represents to Delawareans – that we value our workers, teachers, seniors, healthcare workers, parents and children,” said Rep. Kim Williams, D-Marshallton, co-chair of the Joint Finance Committee and chair of the House Education Committee. “This budget not only addresses immediate needs, but also invests in the future of our state, providing critical funding for education, healthcare, and social services,” she said. “For the third year in a row, we were able to deliver well-deserved raises for our state workers and educators, bolstering our workforce, ensuring we remain competitive with neighboring states, and enabling us to attract and retain top talent.” The operating budget bill will invest in critical services used by vulnerable Delawareans, including seniors in skilled nursing facilities, people with intellectual and developmental disabilities, and families struggling to cover the cost of childcare. SB 325 includes $7 million in state funding for higher Medicaid reimbursement rates paid to long-term care facilities that will unlock another $10.5 million in federal funds, bringing the total state and federal investment in the welfare of struggling seniors over the last two years to $30 million. A combined $3.4 million in additional federal and state funding will be allocated to cover an increase in the Medicaid reimbursement rates for the direct support professionals who serve people with intellectual and physical disabilities when Delaware’s $15 an hour minimum wage takes effect in January. Another $3 million will be used to similarly enhance the Medicaid reimbursement rate for home health and personal care workers. IN THE NEWS: GA mulls separate public, private school sports titles The spending plan also would add another $10.3 million to Delaware’s Purchase of Care program, which helps low-income families afford the cost of early childhood and after-school care for children under the age of 13. The additional funding will increase reimbursement rates based on a 2024 Market Rate Study, move the POC program to a statewide reimbursement rate, and cover expanded eligibility for families with incomes of up to 200% of the federal poverty level. Meanwhile, Delaware’s Early Childhood Assistance Program, which helps to provide early childhood services to 3- and 4-year-olds who are income eligible for Head Start., will see a $3.5 million increase, making another 204 seats to available to families of pre-K leaners. Other notable highlights of the FY 2024 operating budget include:

• $132 million added to cover the state’s share of employee and retiree health insurance premiums to ensure existing health benefits remain intact;
• $94 million added to cover inflationary costs and higher usage of Medicaid services;
• $39 million added to cover projected enrollment growth in Delaware public schools;
• $17 million added to continue providing enhanced mental health support in Delaware public schools;
• $10 million increase in Opportunity Funding used to provide additional support for low-income students and multilingual learners;
• $5.4 million added for the SEED and INSPIRE scholarship programs;
• $3 million added to hire 20 early literacy coaches in Delaware public schools and fund literacy-related professional development;
• $2.5 million added for the First State Promise scholarship program;
• $1.2 million added for an expansion of the nursing program at Delaware Technical Community College.

Other highlights of the one-time supplemental budget include:

• $56 million allocated to the Other Post Employment Benefits Fund to cover the cost of future retiree healthcare needs;
• $8.9 million for primary and general election costs;
• $3.5 million for residential and childhood lead prevention and remediation programs;
• $250,000 for a voluntary middle and high school cell phone pouch pilot program to reduce classroom learning distractions.