Minner orders spending reduction
By PATRICK JACKSON
Dover Bureau reporter
12/20/2001
DOVER -- Gov. Ruth Ann Minner ordered department heads Wednesday to cut $23.8 million from this year's budget because of declining state revenues.
The cuts in the $2.3 billion budget adopted in June cover most departments, agencies and the offices of other elected officials.
The cuts will not result in layoffs, but many vacant positions will be frozen indefinitely, budget officials said.
The spending reductions were chosen to minimize the impact on state services, particularly those involving health care, education or programs for children and families, they said.
But the reductions will have impacts that include:
• Slower movement of developmentally disabled residents from institutions to group homes.
• Deferred maintenance in state prisons and delayed replacement of prison supplies such as blankets.
• Slower replacement of vehicles used by fire marshals and others, and less travel by state employees in most departments.
"I think she's doing the right thing," said Sen. John C. Still III, R-Dover North, a Senate representative to the Delaware Economic and Financial Advisory Council, which sets state revenue estimates. "She is starting off by cutting, but I think we're not far from reaching the point where we start cutting into the bone."
The need to cut state spending stems from steadily declining revenue estimates from the financial advisory council.
The council estimated Monday that revenues for the current budget would be $30.9 million less than what was expected when the General Assembly approved the budget.
State budget officials said they need to make cuts now to stay within this year's budget. They also hope to manage spending so that a surplus can be rolled over into next year's budget, which already is squeezed by rising costs and flat revenues.
Revenues for the 2003 budget, which will start July 1, are estimated to be $113 million less than the council's June estimate.
Spending requests from department heads for 2003 came in last month at about $150 million more than the revenue estimate released Monday by the advisory council.
"These are aimed more at giving us some cushion to carry over into next year's budget," Minner spokesman Gregory Patterson said. "Of course, if revenue keeps falling we may not have a carryover, or we may have to make more cuts."
Minner will propose her 2003 budget to lawmakers in January.
"We're still looking at all the agencies and where we can make cuts," Minner said. "We'll continue to do that until we get it to the point where it will balance for next year."
Department heads had been working to identify possible cuts since October, when Budget Director Peter Ross told them to find up to 2 percent of their budgets that could be eliminated if the economic slowdown worsened.
Minner told agencies in October to try to avoid reducing the level of services provided to the public and to avoid layoffs.
The cuts announced Wednesday touch on every state agency except the General Assembly and the Department of Services for Children, Youth and their Families.
The biggest reductions come in the departments of Health and Social Services, which was asked to return about $4.5 million, and Correction and Education, which each were asked to cut about $4 million.
Minner rejected some of the cuts suggested by department heads, including a $993,000 reduction in the Department of Correction's drug treatment programs, $200,000 from the Health and Social Services' adolescent pregnancy program and $100,000 in worker training money from the Department of Labor.
Marianne Smith, director of Health and Social Services' division of disability services, said a $499,000 cut in residential placement spending will result in a slowdown in transferring people from institutions to group homes.
The division will delay until June the opening of three new group homes. Smith said the state now has 68 group homes for the developmentally disabled.
"We don't have to take anyone out of a group home because of this order, and we still will be able to place people," she said. "It simply means we won't be able to place as many people as quickly."
Education Secretary Valerie Woodruff said the cuts to her budget should not affect the state's contribution to local school operating budgets. Ross exempted that spending before he started working with the department on cuts.
Woodruff said about $1.52 million of the $4 million to be cut comes from cash that had been carried over from the last fiscal year.
Some savings result from spending in some areas that is occurring more slowly than officials predicted.
"It's always tough to cut," she said. "But we are doing what we have to do."
Reach Patrick Jackson at 678-4274 or pjackson@delawareonline.com.
