DOVER—Calling the last two years an "economic blizzard of historic proportions," Governor Jack Markell delivered his State of the State Address to a joint session of the General Assembly, vowing that Delaware is "digging out of this mess." (Watch excerpts of the Governor's address below.)
"On this point, let me be clear: While there are national and international forces beyond our control, Delaware is far stronger than the challenges we face," said Markell.
The governor, marking the halfway point of his term, noted what he sees as some of Delaware's successes over the last year. They include the reopening of the oil refinery in Delaware City, the deal to move Perdue's agribusiness headquarters to Seaford, the state's continued AAA bond rating, and and Delaware's success in earning Race to the Top federal funding.
Markell also offered some new initiatives, though there were few specifics attached to them.
Legislators uniformly called it a typical state of the state address.
Senate Majority Leader Patricia Blevins on the tone of the Governor's address
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"The State of the State Address is always a victory lap to celebrate what you did and to celebrate what you say you’re going to do," said House Minority Leader Greg Lavelle (R-Sharpley), who added he was pleased that the governor seemed to indicate he would not be seeking any tax increases.
“I thought it was very well balanced,” said Representative Helene Keeley (D-Wilmington South). “When we are still coming out of an economy that is still very shaky, you want to be aggressive and talk about jobs, jobs, jobs. And at the same time you want to make sure that we’re maintaining, we’re not overstretching, and that we’re not going to lose jobs [through] any of the initiatives that the governor or his administration would like to see move forward.”
Markell laid out some ideas to foster job creation in a state where unemployment still stands at 8.4 percent.
"Our success at creating jobs demands more than a tax credit here or an incentive there. It’s about our culture," the governor said. "We must think like entrepreneurs and others who create jobs. Anyone who can create a decent job, whether they are already here or across the ocean, needs to know we are more responsive and more committed to their success than anyone else, anywhere."
Markell is proposing "significant" funding for Delaware's business-building Strategic Fund. He also is calling for the creation of a Job Creation Infrastructure Fund, which he says will allow Delaware to "seize the best opportunities for investing in future jobs in ways our Transportation Fund currently cannot.” The Transportation Fund Task Force is already studying funding gaps in the Transportation fund and ways to fill them. It’s report is due at the end of March.
Legislators want to hear more about the new infrastructure fund before signing off on it.
"I'm not sure what that is," said Rep. Lavelle.
Republican State of the State reaction from House Minority Leader Greg Lavelle
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Senate Majority Leader Patricia Blevins (D-Elsmere) says the successful use of the Strategic Fund to negotiate job-creating deals involving Fisker Automotive, the Delaware City refinery, and Sallie Mae Corporation is reason to continue funding it strongly and look at the infrastructure fund proposal closely.
“The history of things with the Strategic Fund is just stellar. It’s done so much for our state," said Blevins. She believes the recent successes will make future funding for the program "an easier sell.”
Senate Minority Leader Gary Simpson (R-Milford) wasn’t ready to judge the proposed infrastructure fund, but he agreed that money for the Strategic Fund should win support.
"It’s almost essential that we do it,” said Simpson. “We’ve got to have those funds available if a company says, 'You know, I just can’t quite make it, coming to Delaware and bringing 25 employees.' Then we have to be ready to offer some sort of assistance, whether it’s a taxed rebate or it’s funding from the Strategic Fund.”
Senate Minority Leader Gary Simpson on replenishing the Strategic Fund
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As he did in last year's address, Markell called for an effort to address the spiraling costs associated with Medicaid and state employee health insurance and pension costs.
Last year, Markell proposed a two-tier system in which new state employees would pay more into their benefits than current state employees do. That idea stalled. This year Markell left the door open for discussion of how best to achieve savings in state employee benefits.
"I am open to any and all good ideas. But we must secure the necessary savings during this session of the General Assembly, because the cost of delay is just unacceptable," said Markell.
The response of legislators after Thursday’s address indicates that finding a way to trim state employee benefits will be difficult again this year.
“We have to be careful," said Rep. Keeley. "[W]e already have people working on two different tiers" in the state employees' healthcare plan. "What I'm hearing from state employees is that 'we need to maintain what I was told what I was going to have.' ”
Simpson has concerns as well. "I’m fearful ... that when we talk about one plan fits all, that will cause current employees to just flood Legislative Hall with efforts to kill the whole thing. I would rather stick with a two-tier plan because I think that will work and will get passed.”
Representative Helene Keeley addresses the issue of state employee benefits
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Markell said state employees and Medicaid recipients will not be the only ones to feel the budget pinch.
“Many other areas of our budget will not be able to receive funding at their prior levels because of these other costs. This will include programs that I strongly support,” said Markell. "But we cannot spend money we do not have—and we do not, and will not, have money to spend on some badly needed initiatives unless and until we get our major cost drivers under better control.”
Republicans in both houses suggested that the governor set the right tone.
"The devil is in the details," said Rep. Lavelle. He awaits those details in the governor’s budget proposal next week. For now, he is pleased that the governor did not propose tax increases but did speak about making government more efficient and working cooperatively. "[T]here’s nothing wrong with any of those things.”
Simpson expressed skepticism. “We’ve been talking about this for two or three years, but last year we added [more than $200 million] to the budget. We've really got to get serious about cutting and becoming more efficient.
"[T]he proof will be in the pudding. Sometimes the legislature is a bit reluctant to make cuts. It’s fine if it’s somebody else’s cut, but don’t let it be mine. I think we've got to get tough and get serious about cutting the size and making government more efficient.”
Markell also spent significant portions of his speech discussing education and public safety.
On education, the governor stressed the importance of making Delaware students more competitive in the job market. He hopes to build on the progress made in winning federal Race to the Top funding and on the adoption of new nationwide Common Core curriculum standards. Pointing to the state’s recent work to attract Chinese investment, he emphasized the need for Delaware students to become multilingual. Markell touted a new regulation that will require students to complete a world language for graduation, as well as a partnership with the Hanban Institute to bring teachers from China to teach Chinese in Delaware.
"We need to be China’s trade partner, not just a customer or debtor, and together these innovations will help give Delaware’s students the language skills needed to do that,” said Markell.
Markell’s public safety initiatives included creation of a model comprehensive school safety plan for the 26 public schools in the state that have a State Police Resource Officer and a revamping the state’s DUI laws. Markell also wants to pursue a plan proposed by the Delaware State Troopers Association that would use money collected in criminal fines to help address gun violence, starting in Wilmington.
Markell also promised money in his budget to help shrink the state hospital population by transitioning to more patients to community placement and to further address the issue of children aging out of foster care.
The governor closed his State of the State speech a call to service and civility.
“We see this spirit in our schools, where teachers, their unions, parents, and administrators have all come together to forge the innovative education solutions I’ve detailed today, " Markell said. "Other states have seen pitched battles where teachers and politicians demonize each other, but that’s not our approach in Delaware.
"We see that spirit here in Dover, where elected officials are working together—unlike elsewhere in this country.”
Simpson said he hopes that message resonates with everyone.
"I thought it caught the mood of the country in that it was calling for legislators and the executive branch [to work] together to solve common problems. And I think that’s the will of the people today: that politicians put aside personal differences and party affiliations to make this thing work.”
Excerpts from Governor Jack Markell's 2011 State of the State Address
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