In his second State of the State address Jan. 21, Gov. Jack Markell emphasized job creation, outlined a plan to shrink state personnel costs and touted reforms to public education.
To encapsulate his remarks, the governor returned to the metaphor he used a year ago in his first speech to a joint session of the General Assembly.
“Navigating through any storm requires unwavering focus, clear purpose and bold action,” he said. “During this storm, our focus is on creating more and better jobs and building a stronger economy for us all.”
Markell outlined his efforts to attract companies and jobs to the state by offering incentives and loans to businesses.
Some of his initiatives, like the small business LIFT loan program, already are up and running, but the governor said he’ll ask the legislature to approve a new Jobs Incentive Fund that gives businesses a cash credit for creating jobs that pay at least $20,000 per year.
He also proposed paying a “finder’s fee” to businesses that attract their suppliers and vendors to locate in Delaware.
On the capital budget side, Markell discussed using new state bonds to fund the Northeast Corridor Rail project and the Route 301 bypass, as well as $10 million in improvements to the Port of Wilmington.
In the economic portion of his address, the governor said he wants to restore Delaware’s manufacturing sector, which is reeling after the closing of the Chrysler and GM auto plants and the Valero refinery.
“All of these efforts are critically important. But to get people back to work, I firmly believe that Delaware needs to start making things again,” he said.
Markell devoted approximately a third of his speech to discussing ways the state can cut costs.
He said there’s still money to be saved by consolidating state offices and services and announced his intention to create a bipartisan committee that will analyze how to make programs more cost-neutral.
Though Markell did not raise the specter of employee pay cuts or layoffs, he did say the state could save $75 million over the next five years by cutting benefits and raising retirement contributions for new hires.
The governor also said the state needs to look at how much is being spent on prisoner health care, especially for aging inmates.
“Many inmates sentenced under the minimum mandatory provisions adopted in the 1980s are approaching their older years. The cost of their care is soaring,” he said. “If we do not act, we soon will need to operate nursing homes within our prisons. We must examine who we’re holding in our prisons and whether we can provide a less expensive but safe alternative.”
Details were slim on most of the proposals Markell outlined in his speech and legislators said they hope to hear more specifics about his plans in his budget address, to be delivered Thursday, Jan. 28.
“He threw out a rough outline today and he’ll flesh it out more in the budget address,” said House Majority Leader Rep. Pete Schwartzkopf, D-Rehoboth Beach.
Republicans said Markell’s lack of specificity wasn’t helpful.
“I’m a little disappointed with the lack of details,” said House Minority Leader Rep. Richard C. Cathcart, R-Middletown. “The ideas are promising, but the devil is always in the detail.”
Legislators also were reticent to declare their support for the plans discussed in the speech, especially the proposal to cut benefits for new state employees.
“We can only assume that new employees are going to pay more for health care,” Cathcart said.
“We don’t know the methodology he used to create some of these initiatives.”
Schwartzkopf said the employee benefits changes might be a good way to start chipping away at the state’s personnel costs, which make up nearly half of the total budget.
“You don’t let the problem get worse before you try to fix it,” he said. “But I have to see what benefits we’re cutting and how big a hit we’re taking.”
Republican Sen. Colin Bonini called the address “content free” and said the governor’s plans as described won’t do enough to reduce government expenses.
“Even the sum total of what he said is still on the margins,” he said. “And he eluded to releasing prisoners, so I’m a little concerned about that.”
Dover —
