By J.L. MILLER, The News Journal
DOVER -- Gov. Ruth Ann Minner and top state budget officials, grappling with a projected $126 million shortfall in the current year's budget, are implementing a state hiring freeze today.
The hiring freeze will be accompanied by a move to reduce current-year expenditures by $100 million to $150 million, instead of the earlier planned cut of $50 million to $75 million.
And if that doesn't bridge the gap, tax increases could follow, Minner said.
It will be the first state hiring freeze since 2004.
No layoffs are planned -- but Minner would not rule them out if revenues continue to slide in the remaining three months of the current budget year.
"We're not looking at layoffs now. ... That's not to say that eventually we won't have to," Minner said.
However, Minner and the co-chairmen of the Legislature's budget-writing Joint Finance Committee said layoffs carry their own cost, such as unemployment insurance, paying workers for unused vacation days, and the income tax revenue that is lost until they find another job.
The hiring freeze will not affect the judicial or legislative branches, nor will it touch public or higher education. Round-the-clock operations that serve a critical public need also will not be affected, meaning that correctional officers and nurses for state institutions can still be hired.
The exact number of positions and the number of job openings that will be affected by the hiring freeze were not available Tuesday evening.
The state, with 17,500 jobs, is the largest employer in Delaware.
Minner also would not rule out recommending possible tax increases if revenues continue to fall.
"If we see that we're not going to get there with cuts ... if it means we have to, we have to," Minner said.
If that is the case, she said, "I feel confident that the General Assembly will work with us to get it done."
Jennifer "JJ" Davis, director of the state Office of Management and Budget, said she would request an additional 5 percent in reductions to the proposed operating budget for fiscal 2009, which begins July 1. That is in addition to the 3 percent cut announced before projected revenues plummeted.
Davis said that those measures should address the projected $126 million hole in Delaware's current operating budget, as well as the $200 million shortfall projected for fiscal 2009.
The hiring freeze also will be accompanied by a freeze on what is known as "critical reclassifications."
That could cover an employee who has been given added responsibilities and who, in normal times, would be bumped up to a higher pay grade.
Budget officials will continue reviewing purchase orders of more than $2,500, but they expanded that Tuesday to cover use of state credit cards as well.
"Pain will be felt everywhere," Davis said.
Kenton Democrat Sen. Nancy Cook, who co-chairs the JFC, said the grim revenue estimates issued Monday by the Delaware Economic and Financial Advisory Council made the hiring freeze and cutbacks necessary.
Rep. William A. Oberle Jr., R-Beechers Lot and JFC co-chairman, said the revenue declines mean the General Assembly has "to be as precise as we can in identifying those core programs that must continue in order to allow state government to continue to function."
