New Castle County residents won’t see a tax increase next year under County Executive Matt Meyer’s proposed budget- but he is calling for an over $5 million in spending cuts to help cover a 13.8 million dollar shortfall.
The rest of the shortfall will be covered using county reserves under Meyer’s plan - unveiled Tuesday.
Meyer says the county faces a structural budget imbalance - with expenditures over three times the amount of revenue coming in.
“For years we’ve been spending more than we’ve been taking in as revenue," Meyer said. "I can’t do that in my house – none of my constituents can do that (spend more than you make) so we can not do that as a government.”
The situation is compounded by a high-level of non-discretionary spending - 77 percent of which is employee salaries and benefits.
Over $2 million of Meyer's proposed cuts would be to personnel.
“We were handed a situation where the county last year signed contracts without any plan for how to pay for them," Meyer said. "And now we need to figure out how to pay for them.”
Meyer is looking to cut vacant positions – but says he needs more information on their functions before making decisions.
That’s why he’s commissioning a performance review of all county government functions next month.
Meyer cited other cost drivers that must be addressed - such as an unsustainable level of debt and over-reliance on out-of-state contracts.
New Castle Councilwoman Janet Kilpatrick was astounded to hear debts are being paid in interest only – creating ballooning payments.
“We went back to bonds a year or so ago because the interest rates were reduced," Kilpatrick said. "And we were told we were saving money because we had basically refinanced like you would refinance a mortgage on your house. But we were never told we were paying interest only.”
Kilpatrick is pleased Meyer is taking a hard look at the structural budget issues she says council has been trying to tackle for years.
Meyer’s plan does include some new spending - such as small grants to support new DNA technology for police, the RAVE Panic Button system and the Route 9 Library and Innovation Center.
Meyer also plans to keep funding for county fire services the same as this year.
The FY18 budget must be approved by June 1.
