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Politics & Government

Does Delaware need to create a uniform local budget system for cities and towns?

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Delaware Public Media
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When it comes to creating budgets, it’s pretty safe to say that no two Delaware towns are alike.

That’s a conclusion Deputy State Treasurer Liza Davis has reached as she examines the budgets submitted by 55 cities and towns in order to qualify for grants being awarded as part of the $1.9 trillion American Rescue Plan Act (ARPA).

Under the law, the Treasurer’s office is responsible for distributing up to $85.6 million in grants to smaller local governments – but not the $250 million that will flow to Wilmington, Dover and Delaware’s three counties. Liza Davis has been charged with reviewing those 55 budgets for certification purposes so the money can begin to flow.

While she’s awaiting guidance from Washington on a variety of issues that could affect certifications, she admits to being confounded by some of submissions from the towns.

Some towns submitted budgets for operations only, others submitted capital and operations budgets, others combined capital and operations in a single budget, others submitted budgets that showed only spending from the town’s general funds. And, Davis said, some towns had no formally approved budget at all and had to create one in order to qualify for the relief funds.

"I've got to believe we can manage it. After all, we've got 55 municipalities, Pennsylvania has about 2,500. And I keep wondering, what does Texas think about this?" - Deputy State Treasurer Liza Davis

Differences in budgeting formats, differences in how towns classify revenues, differences in how they break down revenues – all these inconsistencies could lead to confusion as final calculations for the grants are made, she said.

“I’ve got to believe we can manage it,” she said. “After all, we’ve got 55 municipalities, Pennsylvania has about 2,500. And I keep wondering, what does Texas think about this?”

But the differences prompt a relevant question: Should a consistent format be required for Delaware’s cities and towns to use when they prepare their budgets?

“Absolutely,” Davis said.

A consistent format, she said, would promote transparency among governments and it would make it easier for cities and towns to satisfy auditing requirements – both with their annual budgets and with whatever reporting standards are set for the use of the relief funds.

One way to establish uniformity, Davis acknowledged, would be by having the General Assembly approve legislation to set the requirements. But, she said, the Treasurer’s office hasn’t given thought to drafting such a law because it’s too busy now sorting through the local budgets for certification purposes.

Another path to uniformity, she said, would be to use some of the state’s ARPA funds to provide new resources to towns – especially small towns – to improve their budgeting and accounting processes. The Treasurer’s office is starting to study how this might be accomplished.

“A lot of small towns are run by volunteers. The people running these towns often need help with accounting,” she said. “We’d like to help them get into better budgetary practices going forward.”

 

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