Markell Delivers First State of the State

“Let’s get to work” was the main theme of Governor Jack Markell’s first State of the State speech to the General Assembly.

Stating the first order of business is to repair the state’s economic and financial foundation, Markell openly admitted that he understood the unpopularity of decisions that have been made. According to the Governor, dealing with the largest budget shortfall in Delaware’s history leaves little room for inaction.

The Governor also spoke on long-term fiscal growth and handling the state’s additional $28 million shortfall for Fiscal Year 2010, on top of the $780 million shortfall of present.

Improvements in education were deemed important in creating an economic climate for growth. Major points included the elimination of the Student Testing Program in favor a testing program that measures progress, using money gained from the consolidation of administrations to reward the highest-performing teachers and those working in high-risk areas and giving more flexibility to the schools.

Markell revisited his Creation of Real Economic (CORE) Prosperity agenda, focused on re-educating the work force to be more competitive in emerging green industries, and government issued small business loans through the LIFT Program.

The Budget Issues

On top of the current $780 million budget shortfall, the Delaware Economic and Financial Advisory Council (DEFAC) projected an additional $28 million shortfall for FY2010. The financial crisis will likely extend through 2012.

“Together, we must balance our budget; we must live within our means. We cannot walk away from the tough decisions or pretend there are easy answers. We must face this responsibility firmly,” stated Gov. Markell.

He recognized that his budget proposal was unpopular, and claimed his own dislike over state employees’ pay cuts.

“But our fiscal crisis is dire and I want to avoid layoffs, like many in the private sector have been forced to endure. To state employees I say this: I very much value your service. You do incredible work. I will work with you to minimize these painful cuts but we all need to be realistic about our fiscal situation.”

The three principles of Markell’s budget proposal include fiscal responsibility by not jeopardizing long-term prosperity for the short-term, sustaining core commitments by protecting our families, seniors, those with disabilities, and our resources and sharing the sacrifice throughout the state.

Speaking against the casino owners’ rejection of the modified sports betting bill and their response of “don’t look here, look elsewhere”, Markell said, “Let me be clear: the exclusive franchise for video lottery and sports lottery belongs to the taxpayers of this state, not the casino owners. The owners are the taxpayers’ partners in this venture and they need to act like partners. House Substitute 1 for House Bill 100 is a fair way to do that.”

Meetings are planned with the four caucuses to come up with broad parameters for increasing revenue and spending cuts. The Governor will also meet with the Joint Finance and Bond Bill Committees for solutions to the budget problem.

Long-Term Fiscal Stability

Consolidation, accountability, and decreasing the size of government were all solutions offered to Delaware’s long-term prosperity.

The Governor stressed the importance of reevaluating the necessity of services provided and encouraged the government to find ways of making irreplaceable services cost-effective.

His main example was the care of seniors. Citing the expense of institutional nursing home care and the rise of baby boomers requiring medical assistance, Markell spoke of shifting to home and community based care.

“With the state’s Medicaid program leading the way, we must weave together a social, medical and community fabric that makes expensive institutional care a last resort, not a first stop for those that need help as they age. If we do this, we will prevent this coming financial crisis while at the same time ensuring that our seniors are able to have as many healthy and happy years as possible living in their community.

Consolidation was a major idea for the Governor’s plan of fiscal stability. Along with merging redundant services in each agency, like human resources, accounting, and information technology, he spoke of evaluating services on the state, county, and municipal level for further sharing. Services included libraries, paramedics, procurement, and assistance offered by county row offices.

Stating education as the most significant budget demand, Gov. Markell spoke to those for and against the consolidation of school districts and proposed to take a serious look at the notion and revisit the idea next year. Schools will stay as they are, but combining surplus “back office” administration positions may occur.

Education and the Creation of a Climate for Economic Growth

Beyond the need for increased efficiency, Markell believes Delaware schools need to refocus on giving students the best environment to learn.

With the support of Education Committee Members and the Secretary of Education, Lillian Lowery, Markell seeks to make three major changes in the Delaware school system.

First, the elimination of the Delaware State Testing Program would make room for a new testing system that tracks students’ progress over time, allowing teachers to adjust and children to learn.

Second, reducing administrative positions, like lawyers, human resources, and accountants, would free up money that would be used to reward the highest-performing teachers and those who work in high-risk schools.

Third, more flexibility would be given to the districts to solve their own problems and become more innovative. This would also require more accountability and transparency with how funds are spent.

Delaware’s Work Force and CORE Prosperity Agenda

In the final portion of Markell’s address, he focused on offering aid to Delaware’s work force through re-education and small business loans.

Revisiting the CORE Prosperity initiative, the Governor spoke of using federal stimulus money to retrain the unemployed, offer on-the-job training, and through Delaware Technical and Community College and other four-year colleges, create curriculum based on the up-to-date needs of employers.

Talking about the Quick-Start/Rapid Response training, Markell said, “Instead of training potential workers with whatever curriculum is currently available, we will build on the great work being done by Delaware Tech and our four-year institutions to train them for available jobs.”

Small businesses were also on the agenda, as Markell discussed the LIFT Program that offers loans to small businesses through the state’s Strategic Fund. These loans will be paid back.

Hoping to use Delaware’s size as an advantage, Markell recommended creating one statewide business license to make the first state the best place to start and grow a business.

“To achieve CORE Prosperity, we must use our size and speed to make Delaware the best place in the nation to start and grow a business, including minority and women-owned businesses. We need to get to work so people can get back to work,” said Markell.

His last major point involved making green by being green. The announcement of the Energy Efficiency and Conservation Act of 2009 revealed that per capita electricity consumption reduction and peak demand reduction by 15% would be required by 2015.

“To meet these targets, we will partner with the Sustainable Energy Utility to use stimulus funds to launch the Delaware Modernization Service. This will provide energy efficiency services including audits and retrofit loans, grants, and rebates to cut monthly energy costs and put people to work,” explained Markell.

A statewide efficiency policy was ordered. The Office of Management and Budget and DNREC are responsible for creating the policy, which will include retrofitting existing state buildings, new standards for new construction of state buildings, additional energy efficiency measures, and getting the government to be powered by renewable resources.

The Governor hopes that Delaware workers will be at the forefront of manufacturing jobs for renewable resources and other environmentally-friendly industries.

“Talking about the green economy is easy. Capitalizing on the opportunities it represents is not, because few if any states have really figured it out yet. The state which most effectively marshals its resources in support of an intelligent strategy is likely to reap real dividends.”

Markell closed his speech to the General Assembly with hope and confidence.

“Today is our day and now is our time. The challenges that confront us are opportunities, not obstacles. “

“We can, and must, move together with a purpose that makes clear that we have the power to define our future; that we have the energy to turn our obstacles into opportunity and lead our state boldly into the future.”