The Joint Finance Committee’s 2025 budget hearings open with the prospect of the state needing more money to cover its health insurance shortfall.
The Office of Management and Budget offered JFC an overview of the governor’s recommended spending plan, but OMB Director Cerron Cade says health care spending may need an additional boost.
Monday’s State Employee Benefits Committee meeting revealed Delaware’s Group Health Insurance Plan faces an estimated $39 million deficit by the end of June. In order to cover that sum and FY25 shortfalls, consultants are recommending a 27% premium rate increase across the board.
The governor’s recommended budget appropriated around $94 million for anticipated premium increases, but with the recommended premium increase being higher than anticipated, an additional $45 million would be needed.
“And that is if, and only if, SEBC votes to approve the premium increases that have been presented in front of them. If they do not, then we will be on the hook for covering the entire shortfall," Cade says.
Cade notes the health insurance plan has not increased premium rates in six years, but the average state employee salary has grown by around $10,000 since FY22, and the governor is recommending an additional 2% raise across the board for FY25.
Some Joint Finance Committee members also make it clear they will make independent decisions on how to allocate funds.
“I’d like to see us really bear down and write the budget this time. The governor’s recommended budget should be the governor’s requested budget, in that, it's truly a wish list. We are charged with writing the budget — the governor is not," says State Sen. Dave Lawson (R-Marydel).
State Rep. Stephanie Bolden (D-Wilmington) is also apprehensive about Carney’s emphasis on bolstering education spending, worrying the funding isn’t reaching areas she feels may need it more.
“I don't think that education should be the huge part of our budget that we're allocating. When you're looking at our numbers nationally, with education, I just have some concern as to where we're putting the money, not in the resources that need to go into the schools, but continuing putting it in salaries.”
Bolden is referring to the governor’s endorsement of raising the baseline teacher salary to $60,000 by FY28, along with moderate raises for other public education employees.
"I really want to focus on domestic violence. I think that that is one area that we need to put more consideration in and more funds in," she adds.
Bolden says she is concerned about raising health insurance premiums, particularly for the retired population: "The biggest problem with that going forth in health care would be for our seniors and those that have retired because they're not getting the money coming in that can justify any increases, so that puts us all in a bind."
She says she’s planning on taking a more conservative outlook in this year's budget planning, while also monitoring bills introduced in the General Assembly with large fiscal notes that may raise budgetary needs.
