Tense budget talks reach final day in Dover

With just one day left in the 2015 legislative session in Dover, lawmakers are losing friends fast.

Delaware budget writers have cut subsidies to nonprofit groups serving seniors and are preparing to reduce funding to fire companies.

City officials are reeling after Delaware lawmakers claimed a larger share of real estate taxes and eliminated millions in aid for local roadway repairs.

County leaders are warning of painful cuts to law enforcement.

And the business community continues to clamor for an infrastructure deal that would fund road and bridge fixes and other transportation system improvements up and down the state.

Democrats and Republicans negotiated for months on a deal to help close a $780 million, six-year roadway funding deficit, only to see it fall apart publicly on the Senate floor Thursday.

Without a resolution on Tuesday, Delaware transportation officials expect state-funded roadway spending to fall to $138 million, a 38 percent drop since 2009, when Gov. Jack Markell took office.

"It's a mess. And it's a mess because they're in a difficult situation," said Rich Heffron, president of the Delaware State Chamber of Commerce. "I'd would like to see a little bit of cooperation between the two parties."

Facing two-year budget gaps, top lawmakers in Dover delayed a fix until the final days of the 2015 General Assembly session in Dover. And now they are paying the price.

Most are expecting a marathon session in Dover on Tuesday that could stretch far past midnight into the early morning hours on July 1, the first day of the new fiscal year.

House legislators plan to only begin work at 7:30 p.m., after meeting behind closed doors for party caucuses and dinner.

Senate lawmakers plan to enter the chamber for the June 30 session at 6 p.m.

Meanwhile, no votes have been cast on Delaware's $3.9 billion operating budget, a $385 million capital-spending plan or a $45 million grants-in-aid budget, which funds fire companies and senior centers but will likely face $2 million in cuts Tuesday.

Senate lawmakers also could revive the transportation funding bill, which failed to reach the three-fifths support necessary for passage.

No Republicans voted in favor of the legislation, which generate $24 million in new transportation revenue by raising fees charged on car purchases, driver's licenses and motor vehicle titles.

"They waited too long to come to a conclusion on a budget agreement. Things went pretty much haywire," said Wilmington Mayor Dennis P. Williams, who for three years chaired the General Assembly's budget committee as a state representative. "If I had been the chairman, personally, I wouldn't have let it go this long."

Wilmington stands to lose millions in real estate taxes and transportation aid under the current budget agreement. But Williams said he remains optimistic lawmakers will reach agreements to mitigate budget cuts on Tuesday. A transportation deal, for example, could restore municipal street aid. "I'm not panicking yet," Williams said.

Lawmakers' procrastination, and their inability to compromise across party lines, have many like Williams scratching their heads ahead of a final session day on Tuesday.

Last Monday, for example, with just a week left in the current session, budget lawmakers tucked language deep in Delaware's operating budget that will direct a larger share of real estate taxes to the state, at a steep cost to cities and counties. Delaware currently splits the taxes levied on property purchases, but would take two-thirds under the change effective July 1, 2016.

Top budget-writing Democrats made the move with hardly any public input. The move would cost more than $10 million to the New Castle County budget, and officials are warning of reductions to law enforcement services next year if the change goes through.

"This is such a slippery slope and nobody wants to see it," said Col. Elmer Setting, chief of the New Castle County Police Department.

Sussex County receives about $7 million in transfer taxes, said Todd F. Lawson, the county administrator. Eighty-four percent of that money funds public safety, including fire and ambulance costs, law enforcement subsidies in Sussex County towns and other expenses.

Delaware's southernmost county took another big hit, as well. As of Jan. 1, Delaware is cutting the more than $2 million it provides to cover Delaware State Police patrols in Sussex County. The program is jointly funded with the county, and pays for 44 troopers. Come next year, that patrol presence could be reduced by half because of the cut, imposed by budget lawmakers without public input with just days left in the legislative session.

"We will fulfill our commitment," Lawson said Friday. "Whatever the state does with their state police staffing requirements is up to them really."

Lawson called the funding predicament "very disappointing."

"The fact that in a $3 billion budget, the state looked to cut roughly just over $1 million and it directly impacts the public's safety, it's fairly alarming," Lawson said.

Much of the budget wrangling is the result of months-old partisan disagreement in Legislative Hall that has driven a wedge between top lawmakers in both parties.

Since earlier this year Republicans have demanded budget cuts but received little in return from Democrats, who insisted on bipartisan votes on infrastructure legislation and higher revenue to balance the budget.

Now Democrats are backing cuts to nonprofits, law enforcement and transportation that hurt all lawmakers across party lines. On Friday, the Democrat-led capital budget committee eliminated appropriations for roadway aid for municipalities and community transportation funds, which lawmakers use to fix roads in their district.

"What is unusual is the severity of the cuts," said Rhett Ruggerio, a Dover lobbyist who represents the city of Wilmington, the American Council of Engineering Companies and the University of Delaware, among other clients. "We haven't seen that in years past."

Democrats also are insisting on budget fixes this year, having little appetite to take difficult votes on 2016, when lawmakers again face the voters as they seek re-election.

Lawmakers expect the gap between projected spending and available revenue to widen to as much as $160 million next year. Budget writers are also holding onto $36 million in one-time financial settlement funds to help solve that problem.

Sen. Colin Bonini, R-Dover, and a 2016 gubernatorial candidate, said Democrats have been long had the opportunity, with strong majorities in Legislative Hall, to unilaterally raise taxes and new revenue infrastructure improvements.

"I know this is stressful, but I think this is healthy," Bonini said. "For the first time, one party actually has to include the other party and it is uncomfortable."

Dover Mayor Robin Christiansen offered a different view. He said the proposed cuts to municipal street aid, other community transportation improvements and the real estate taxes will wreak havoc on the city's budget, which passed only last week.

Budget cuts in Dover also are reversing progress made in Newark to consolidate operations and reform pension and benefits plans, said city finance director Louis Vitola. The cuts will strip Newark's budget of more than $1.1 million annually, or about 8.3 percent of general fund revenue.

"Recovering from these measures will require drastic service reductions, sharp property tax increases, or a combination of both," Vitola said.

Christiansen said the changes in Legislative Hall will place an "undue burden on the taxpayers of Dover." The capital city mayor sharply criticized lawmakers on the capital budget committee for making the cuts.

"I saw very few public servants in that room," he said. "That's pretty sad."

Contact Jonathan Starkey at (302) 983-6756, on Twitter @jwstarkey or at jstarkey@delawareonline.com.