Posted: Dec. 3, 2002
BUDGET BALANCING ACT
On my second day as Governor
in 2001, I learned that I needed to cut $35 million from the budget
if the state was to end the year in the black. I managed to do that
-- without affecting services or state employees.
Unfortunately, that was only
In December 2001, I was
forced to cut another $24 million from the budget, still avoiding a
significant impact on services and state employees. Last spring, I
imposed a hiring freeze and took other steps to save $20 million and
end the budget year in the black.
So before the current round
of budget cuts, we had already sliced millions and millions of
dollars out of the budget to accommodate the slowing economy. But
many people probably didn’t notice we had even done it, because we
did it in creative ways that didn’t result in changes to the service
Now my administration is in
the process of making more cuts to offset a $95 million reduction in
the revenue that the state had expected to take in this budget year.
So far, we have announced $60 million in cuts and savings. And once
we figure out how to get through the current budget year (which ends
June 30, 2003), I have to contend with an even larger projected
deficit for the following year.
Each round of cuts has been
harder than the one before. And I can promise you that the toughest
decisions are yet to come. No option is off the table at this point.
But Delaware’s financial situation could be far worse.
In Virginia, Gov. Mark
Warner recently announced 1,800 layoffs of state employees, along
with massive service cuts, including closing some DMV offices
entirely and others for one day a week. Some libraries and museums
in Virginia have been forced to cut back hours or close one day a
week and Gov. Warner has said the state may have to lay off more
workers. Florida has laid off 2,300 state employees and Idaho has
eliminated tours and services at state parks.
Pennsylvania has used its
emergency reserve and money from the national tobacco settlement to
balance the budget, thus using one-time sources of revenue to pay
for ongoing expenses. That would be like using your savings account
to pay your mortgage—you no longer have any savings and you just
have to find another way to pay your mortgage next month.
Delaware has not yet had to
take drastic steps like these other states. In the last two years,
Delaware is one of the few – if not the only state – that has not
raised taxes, drastically slashed services, laid off employees or
raided its emergency reserve funds.
Instead, we have focused on
cutting costs and doing more with less. We have changed the way the
state buys health care, altered the way state purchases are made and
stopped foundering computer projects.
Since the revenue forecast
was reduced in September, I have been operating under a four-point
plan to cut the budget: cutting state agencies by three percent;
reviewing and stopping all but the most essential purchases;
freezing state positions so no employees are hired to fill any but
the most critical vacancies; and continuing to “reengineer”
government, which means finding ways to do more with less.
I know that our state
employees are working extra hard to compensate for staff vacancies
and other cutbacks. I can’t thank them enough for their effort and
dedication. Unfortunately, I have to ask them to hang in there a
little longer as we struggle to overcome these tough and uncertain
We need to remember that
while our current crisis is our toughest yet, we’re still in better
shape than several other states. So far, we have not raised taxes,
made serious cuts in services, laid off employees or raided our
I ask that Delawareans bear
with me through this challenging time. There are tough decisions
still to make, but eventually we know the economy will rebound. And,
because of the work we have done, Delaware state government will be
more efficient, more effective and prepared for renewed prosperity.
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