The Joint Finance Committee’s first move in finalizing next fiscal year’s budget put them another $21 million in the hole as they move to close a significant gap.
That cash will go toward solidifying the state employee benefits fund after a state committee Friday increased premiums and co-pays and eliminated coverage for erectile dysfunction drugs, but left deductibles alone.
“That’s really not up for debate at this point,” said co-chair Rep. Melanie George Smith (D-Bear).
State lawmakers struck a deal with Gov. Jack Markell (D) in March after he proposed hiking deductibles to help cover a projected $60 million shortfall.
The fund has been strained in recent months due to most costly hospitalizations and other increased health costs, according to state budget officials.
JFC members have also been reluctant to take up some of Markell’s proposed cost saving measures, like slashing a senior citizen property tax subsidy in half.
Should they not adopt that cut, it adds another $12.6 million to cover if lawmakers follow the governor’s proposal otherwise. Right now, that number stands at $83 million.
It could grow even higher if Republicans seek to restore proposed multi-million dollar cuts to open space and farmland preservation programs.
Immediate solutions available to them come in the form of one-time money from court settlements with financial firms, including Bank of America, Citigroup and Standard & Poor’s.
Those total $61 million, but face competition from Attorney General Matt Denn (D) looking to use part of that money to fund more elementary school teachers for low-income schools and to rehabilitate blighted property to reduce crime.
But another projected deficit for fiscal year 2017 has some lawmakers leery of becoming reliant on that cash.
“If we were to use these one-time funds to help solve this year’s budget, it would be a questionable budgetary practice,” JFC co-chair Sen. Harris McDowell (D-Wilmington North) said.
In the past, McDowell and others have called for increases to the personal income tax for high-income earners, but those conversations have been sidelined as House Democrats pushed through the first leg of an infrastructure spending plan amid GOP opposition.
JFC will continue budget hearings for the next two weeks.
