House Approves State Operating Budget, with Some Dissension~Issue 569 – June 23, 2023

Posted on 06-29-2023

The House of Representatives approved a $5.606 billion operating budget late Thursday, with eight lawmakers voting against the new spending plan for the new fiscal year that begins July 1.

The Fiscal Year 2024 operating budget proposes spending $507 million more than the current budget — a 9.9% hike that is reportedly the sixth-highest increase, by percentage, in state history.

The operating budget pays for many of the programs and services provided by the State of Delaware. Much of the expense is the salaries and benefits of state workers.

Public education remains the largest single General Fund expense, with more than one-of-every-three dollars (35.4%) appropriated to support schools. In Delaware, the state pays about 70% of public education expenses, with the remainder financed by local property owners in each school district.

The Department of Health and Social Services is the second-largest agency in terms of expenditures, accounting for $1.496 billion or nearly 27% of the budget. At $894.5 million, Medicaid is the department’s single largest line item.

Combined, public education and the Department of Health and Social Services take the lion’s share (62%) of the state operating budget.

The House also approved a separate $194.5 million supplemental appropriation bill, including an additional $69.1 for Medicaid.

Both measures are in the Senate and will be acted on sometime next week during the final three days of the 2023 legislative session. Two other major funding bills, the capital budget (Bond Bill) and the Grants-in-Aid Bill, still need to be considered by both chambers.

Eight House members — State Reps. Rich Collins, Jeff Hilovsky, Shannon Morris, Charles Postles, Bryan Shupe, Jeff Spiegelman, Jesse Vanderwende, and Lyndon Yearick — voted against the state operating budget. Here is their joint statement:

Although we appreciate the hard work of all the people in the executive and legislative branches that have labored for the last six months to write the new state operating budget, we cannot in good conscience support it.

While the budget includes many vital investments and expenditures that we fully back, we find the pace of state spending growth to be alarming.

The budget for FY 2024 is $5.606 billion — an increase of more than $507 million and nearly 10% above the budget it’s replacing.

For context, the new budget is more than 50% larger than the operating budget enacted ten years ago (FY 2014).  

The new budget also does not include an additional $194.5 million in spending contained in a supplemental appropriation (House Bill 196) that will be enacted before the end of next week.

Net General Fund revenues are expected to be down next year by 3.8% before rebounding somewhat in FY 2025 with modest growth of 2.5%.  

Considering all these factors, it is irresponsible to approve such a significant spending increase resulting in higher costs that must be accounted for at the start of the next budget process.

We believe our state needs to consider adopting prudent controls to limit spending by linking future hikes to factors like inflation and population growth.

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