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$3.9 billion operating budget balanced with settlement money and nonprofit cuts

Delaware Public Media

State lawmakers closed out their $3.9 billion fiscal year 2016 budget plan Wednesday by using one-time settlement money and cutting cash given to nonprofits.

The $25 million settlement from Standard & Poor’s was divvied up by the Joint Finance Committee to backfill some cuts made to the budget, while leaving some items unfunded.

JFC also rejected Gov. Jack Markell’s proposed cut to a senior citizen property tax credit that would’ve added $12.6 million in revenue, but was met with immediate resistance from the General Assembly.

The committee put off making major budget decisions, despite facing tough revenue forecasts in recent months, until they received a $33 million windfall in the final state projection.

That wasn’t enough to cover Markell’s blueprint, as JFC also made dozens of cuts to different nonprofits, mental health organizations and senior centers totaling nearly $380,000.

Another $5 million from the S&P settlement was put aside to cover potentially moving some DelDOT operating costs from the Transportation Trust Fund to the General Fund should lawmakers strike a deal over infrastructure spending, though it was less that originally promised by Democrats.

Another $2 million cut will made to grant-in-aid programs and JFC is recommending the Joint Bond Bill Committee not fund the farmland preservation and open space programs, saving $6 million.

In total, the 2016 spending plan is up 2.6 percent from last year’s budget.

Committee members also reduced a refund that parents who send their kids to private school receive from the state. In the past, those parents got about $125 per year to help cover transportation costs.

They will now be reimbursed $75 annually.

“I’m not happy with the fact that it has been reduced to what I would consider crumbs for those individuals who choose to send their children to non-public schools,” said Rep. Joe Miro (R-Pike Creek Valley).

In total, the state will pay about $810,000 for the fund, which Miro says greatly offsets the cost if those children instead went to public schools.

Monday, the group eliminated $1.5 million for the charter school performance fund, but backfilled it, and several other items with about $4.5 million in one-time legal settlement money.

“I hope that no one would assume viewing these two things as one-time expenditures,” said Sen. Brian Bushweller (D-Dover). “I believe these should be ongoing costs in the operating budget indefinitely.”

Two other settlements totaling $36 million are left in a savings account to potentially pay for more significant projected deficits in fiscal year 2017.

JFC has been trying to address fraud in Medicaid and other potential strains on the budget to varying success.

The contract for the project examining Medicaid fraud and waste was issued far later than planned and a final report to the committee won’t be completed until September.

“You no longer can get to $150 million by finding $200,000 here or $200,000 there. You’re going to be making real policy changes,” said JFC co-chair Rep. Melanie George Smith (D-Bear).

The Joint Bond Bill will continue work on the capital budget Thursday, with the grant-in-aid bill to be completed June 30

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