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Gov. Markell's $4.1 billion budget cuts worker benefits, bumps pay

Gov. Jack Markell's (D-Delaware) proposed $4.1 billion budget for fiscal year 2017 will solve a looming public worker health insurance crisis by freezing new employees out of richer plans and hiking monthly premium costs, while also cutting benefits on existing options.

Anyone hired after Jan. 1, 2017 would only be able to enroll in a new plan with a Health Savings Account, allowing employees and the state to contribute money towards their medical expenses.

A single person would get $1,000 a year from the state towards a $2,000 deductible, while families are given $2,000 towards a $4,000 deductible. State officials say that money rolls over every year and can be withdrawn if an employee leaves or retires.

Premiums will rise between about $2-20 a month for current plans, depending on which one a public worker is enrolled in.

Markell says the plan will save a little more than $33 million next year, with a $14 million gap left over that he proposes be covered by changes to existing benefits. That will take shape in the coming months through a state committee.

It’s almost certain to meet with resistance from top state lawmakers who have urged the state to negotiate better service rates with medical providers.

"Our benefit plan is called a benefit because it’s given to all employees and retirees and we make changes," said Visalli when asked about the effects this will have on a public worker's wallet.

The projected deficit balloons from $57 million next year to $484 million by 2022 should no changes be made – much of that due to swelling costs from unhealthy, older employees and retirees who are entrenched in plans with no deductible that pay for more than 90 percent of their medical bills.

“If we don’t make those changes, we would certainly have a real challenge going forward,” Markell said.

Total overall spending on the operating budget is up 5.24 percent over the current year.

Also included is only the governor’s second across the board state employee raise as he enters his eighth year in office, aside from restoring a cut in pay made to weather the 2009 recession.

Those making under $50,000 a year will get an extra $500, while giving higher earners a one percent bump, costing $18 million overall.

Markell is also putting $3 million towards boosting the state’s share of starting teacher salaries. Another $1 million will fund a pilot program designed to let educators stay in the classroom while earning more and having more responsibility within their schools.

Also significant is $6 million to fully fund the Wilmington Education Improvement Commission recommendations. The state Board of Education postponed a vote on the plan last week – partly over concerns of an unknown price tag.

“This money is a very clear signal of my commitment that this is not just about words. This is about action,” Markell said.

$4 million of that money will go to the Red Clay School District to provide resources for low income, including English language learners.  Red Clay will absorb many of the students currently served by the Christina School District as part of a redistricting plan.   Another $2 million will create a Wilmington Redistricting Fund to assist in implementing that restricting plan.

Other notable pieces of Gov. Markell’s proposal include:

  • $3 million dollars to upgrade bandwidth in the state’s public schools to 1Gb at middle and high schools and 100Mb at elementary schools.  Another $1 million will be handled out to schools in the form of block grants to aid other tech upgrades.
  • $500,000 to purchase body cameras for state police and support the Attorney General’s office in handling and reviewing footage recorded.
  • $7 million dollars cut from both Open Space and Farmland preservation programs – leaving each with $3 million dollars
  • Zeroing out the $5 million dollar Energy Efficiency Fund

And in the state's Capital Budget:

  • $10 million dollars to the Economic Development office’s Strategic Fund.
  • $8.5 million for the Downtown Development Districts program
  • $15.8 million for Port of Wilmington infrastructure improvements.
  • $3.1 for the Wilmington Riverfront Development Corporation
  • $10.7 million for library construction throughout the state
  • $3.0 for state trails and pathways

State lawmakers on the Joint Finance Committee will begin crafting their budget Monday while meeting with each state agency over the next month.