DOVER, Del. (AP) - The General Assembly’s budget-writing committee has finished marking up Democratic Gov. John Carney’s proposed operating budget for the fiscal year starting July 1.
The Joint Finance Committee on Thursday wrapped up discussions on revisions that Carney recently made to his January budget proposal after coronavirus restrictions he imposed on economic activity in Delaware led to sharp drops in revenue estimates, unprecedented unemployment filings and shuttered businesses.
“I think we have a really good budget despite all the trouble that has come about,” said committee co-chair Sen. Harris McDowell, D-Wilmington.
Among the changes the committee approved was Carney’s decision to rescind a proposed pay raise for state employees next year. The $55 million pay proposal included an across-the-board raise, “step increases” for certain workers, and pay involving collective bargaining agreements.
The panel also has approved the administration’s decision to draw $76 million from a new $126 million reserve fund established two years ago, and to drop a plan to contribute $233 million in general fund cash to the capital budget.
Budget director Michael Jackson said officials now have about $250 million less revenue available for non-transportation spending in the capital budget, which a separate committee will begin work on next week.
Before the coronavirus outbreak hit, Carney in January proposed increasing Delaware’s operating budget by almost 4% to more than $4.6 billion. He also proposed a record capital budget of $892.8 million for construction, maintenance, technology, equipment, economic development and environmental projects.
“There’s going to be some significant changes,” Jackson said, referring to the capital budget. “We’re going to fund the bare minimum that we need to.”
The panel that sets Delaware’s official revenue forecast will meet one more time later this month before lawmakers finalize the operating and capital budgets.
Meanwhile, budget committee members approved $125 million Thursday for the University of Delaware, but only after discussing the university’s refusal to submit to a state audit of credit card purchases and the broader issue of state oversight of the school, which considers itself “state-assisted yet privately governed.”
Despite receiving hundreds of millions of dollars in taxpayer money, the university is subject to little oversight by state officials and is largely exempt from Delaware’s Freedom of Information Act.
Lawmakers have expressed concerns in recent years about the university’s lack of diversity and the fact that Delaware residents account for less than half of the undergraduate population.
The university also has been embroiled in a dispute with the state auditor’s office over its refusal to participate in an audit of credit card use at Delaware’s institutions of higher education. Delaware State University and Delaware Technical and Community College both participated in the audit.
John Long, executive vice president and chief operating officer at UD, told the finance committee that the school does not use state credit cards, also known as procurement cards.
“It’s not a state credit card. It’s a private credit card,” he said.
UD also has tangled with the auditor’s office over a broader audit of its finances.
Under state law, the auditor’s office is required to conduct audits of the state-funded portion of the university’s finances, using a contracted firm jointly selected by the university and the auditor’s office. The law also provides that if the university commingles state funds with other funds, such non-state funds also may be audited in order to complete the audit of state-appropriated funds.
State Auditor Kathy McGuiness said Thursday that, to her knowledge, no such audit of UD has ever been conducted. The university instead has commissioned its own annual audits.
After finally signing a memorandum of understanding in March regarding an audit pursuant to the procedure outlined in state code, university officials declined to participate last month in scoring the bids that had been received, State Auditor Kathy McGuiness told the committee.
“They decided to say ‘pick who you want,’” she said. “I’m not sure why we went through this entire exercise and thousands of state tax dollars over a year and a half just to jointly select, then have non-participation.”
Sen. Trey Paradee, D-Dover, said his concerns about UD extend far beyond audit disputes.
“This idea that the University of Delaware is a public institution and should be treated as such, that it is a state agency, that is settled law,” he said referring to a 1950 Delaware court decision.
Ruling in a lawsuit over whether the University of Delaware could refuse admission to black students if they could obtain degrees at Delaware State College, now known as Delaware State University, Vice-Chancellor Collins J. Seitz concluded that the University of Delaware was an agency of the state.
University officials nevertheless maintain that the school is a private corporation.
“Here we are 70 years later debating whether or not the taxpayers of Delaware have a right to know how the state university is spending its money,” Paradee said. “It’s just crazy.”
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