By PATRICK JACKSON
Dover Bureau reporter
12/16/2003
State revenues continue to grow with the strengthening economy, giving Gov. Ruth Ann Minner's budget planners a little more money to work with as they assemble next year's budget.
Revised revenue estimates released Monday show the state will have about $2.86 billion available for the 2005 budget that takes effect July 1, about $242 million more than lawmakers budgeted to spend this year.
The Delaware Economic and Financial Advisory Council increased its 2005 revenue estimate by $44.4 million from the September projection. The council of government, academic and business experts also increased its revenue estimate for the current budget by about $32.2 million. In addition, the council set the maximum amount the state can borrow next year at $137.1 million.
The council sets the revenue estimates that Minner's planners will use for the budget she will submit to the General Assembly in January.
Lawmakers said the rising revenues will increase pressure to spend more next year, or possibly to roll back part of the $144.5 million in higher taxes and fees approved by the General Assembly in June.
Sen. Nancy Cook, D-Kenton, said she expects that pressure, but predicted lawmakers would be careful in budgeting.
"There are a lot of programs where people would like to see us spend more money," said Cook, co-chairwoman of the Joint Finance Committee, which prepares the annual budget bill. "But I think we'll fight the temptation to spend, spend, spend and be responsible in preparing the budget."
Minner spokesman Gregory Patterson said the administration would remain cautious. Patterson said Minner won't comment on the estimates until she reviews them with her financial advisers.
"This gives us some room to breathe," Budget Director Jennifer "JJ" Davis said. "Because of the cuts we've made over the past few years, there's a lot of pent-up demand. But we're still going to be very responsible in the way we manage the budget."
Since taking office in 2001, Minner has ordered more than $300 million cut from the budget and imposed hiring restrictions to help the state through the nation's economic slowdown. She also has put off initiatives such as hiring reading specialists for all the state's elementary schools. In the current budget, Minner and lawmakers did not include pay raises for most state employees.
Michael Begatto, executive director of the American Federation of State, County and Municipal Employees Council 81, said the union will press Minner and lawmakers to consider using some of the extra revenue in the current budget for a one-time bonus for employees.
"We were willing to do more with less and without more money when times were tough," he said. "We'll be seeking a fair and equitable increase now that things are looking better."
Davis said taking care of state workers is one of Minner's priorities. She also will consider lifting the hiring freeze she imposed more than a year ago for nonessential positions.
Finance Secretary David Singleton said data presented to the advisory council show that the state's economy is getting stronger. The council now predicts higher revenue for the 2005 budget from personal income taxes, real estate transfer taxes and the state's gross receipts tax.
"If the numbers hold up, it looks like we're heading into a recovery," Singleton said. "Not a booming recovery, like we had in the '90s, but we will be in a much better position than we were this time last year."
Minner and legislators also will need to decide what to do with about $51 million in federal aid that lawmakers set aside last spring. Congress authorized the aid to the states to help offset state revenues lost through President Bush's tax cuts. State leaders decided to reserve the money for one-time expenses, rather than build it into the operating budget, which pays for recurring items such as salaries and continuing services.
Reach Patrick Jackson at 678-4274 or pjackson@delawareonline.com.
