Del. Governor Plans State Salary Cuts

Published June 1, 2009

Delaware Gov. Jack Markell (D) is proposing a temporary 8 percent across-the-board cut in salaries for all state employees, which he projects will save the state about $91 million in fiscal year 2010.

In addition, Markell’s proposal trades three fixed holidays per year for state employees for three floating ones, which will enable the state to cut back on overtime costs and save an additional $1 million, according to Markell. The governor also proposes a temporary freeze on career ladder adjustments, for an additional projected $1.2 million in savings.

The governor also proposed cutting health care costs for the workers. “While full-time state employees will continue to receive medical benefits, we will support legislation to eliminate the ‘double state share’ for married state employees,” Markell said in a statement.

“In addition, we propose instituting an in-depth evaluation of the state’s health plan for employees and retirees with the expectation that employees and retirees will pay for a larger portion of their health care than they do today—a portion that will be closer to but still significantly less than most Delawareans pay for their health care,” Markell continued.

Taking Home 10 Percent Less

The combination of salary and benefit reductions means the average state employee will be taking home 10 percent less next year, according to the governor’s office. “To reach the same amount of savings by layoffs instead of salary reductions, we would have had to lay off 1,500 people,” Markell said.

State Sen. F. Gary Simpson (R-Milford), the majority leader, criticized Markell for focusing on only a single element of the state budget instead of considering a variety of areas where savings could be achieved.

“We have to focus more on those areas where we can make the government more efficient,” Simpson said. “It appears that there are other things that could be done, though it would take longer to see the savings.”

For instance, Simpson said the state could save money by consolidating school districts, which would reduce many administrative and other overheard costs, though much of those savings would be down the road, not in the next budget.

Some Jobs ‘Unnecessary’

Some government jobs may also be unnecessary, Simpson said. “We were able to see this coming,” he said. “We called for cuts in government beginning in May of 2007. We were able to see that what we were spending was more than future revenues would allow. The administration at the time took no steps to make any changes. Now we’re paying the price.

“We would have been in a better position if we had not continued the growth of the government,” Simpson said. “The size of the state government has doubled in the last 12 years. The size of the budget has grown by $1 billion in the last eight years. For large states like Pennsylvania, $1 billion isn’t much, but that’s a third of our state budget.”

One efficient way to cut the state’s budget, according to Simpson, would be to offer noncash incentives to induce older government workers to accept early retirement.

Another Tobacco Tax Hike?

The federal government’s cigarette tax was recently increased, and Delaware smokers could see yet another increase as Markell seeks to hike the state tax.

Simpson said the cigarette tax is another example of the governor attempting to single out a particular group to attempt to balance the budget.

Also on the revenue side of the budget proposal, Markell is seeking to expand casino gambling, which Simpson says not only may bring in no more revenue but also could prove detrimental to the state’s current casino operators.

The state already is saturated with gambling establishments, most of which are just breaking even, Simpson says. Adding more gambling sites would likely take people away from the ones that are profitable—causing them to lose money—while not adding any more statewide gambling tax revenues, he said.

Phil Britt ([email protected]) writes from South Holland, Illinois.