I wrote last night about what Rick Pollitt is doing about Wicomico County’s budget, and elements of that approach are also being taken about 60 miles to the north in Dover.
But Governor Jack Markell is really laying the hammer down on state employees. This comes from an e-mail sent by Markell’s office:
My proposal is for all state employees to take a temporary 8 percent pay cut. Delaware’s state employees are hard-working and underpaid. Over a period of many weeks, they told me over and over again that they preferred that the sacrifice be shared by all rather than have some employees suffer layoffs. The only alternative to laying off workers is to temporarily cut the pay of all state employees, and I believe that is a better path to take. The proposed 8% pay cut will save us from laying off 1,500 people and $91M in the 2010 fiscal year. This decision, while difficult, keeps our public servants employed and our core commitments met without adding to our unemployment rolls. Of course, I cut my own pay by 10% the day I took office.
I’d be curious to know what the difference is between what Markell made as state treasurer and the reduced rate as governor (maybe taking 90% of the governor’s salary was still a hefty raise for him); nonetheless it makes for good press and the appearance of shared sacrifice.
He also brings a small amount of detail into what he plans on doing to correct the budget deficit:
Guided by our principles (of fiscal responsibility, compassion by keeping our core commitments, and shared sacrifice), our solution to the $750 million shortfall would:
- Reduce spending by $331M
- Reallocate special funds by $40M
- Leverage $155M in federal stimulus funding
- Raise $55M by re-authorizing a sports lottery and getting a fair deal for Delawareans
- Increase our revenues by $166M
- And raise fees and fines by $12M
Notice I said “small” amount of detail. It’s not spelled out where the $331 million in cuts would be made (assuming the $91 million he saves by cutting state pay is part of the number, that still leaves $240 million of cuts) nor does he show where the $166 million in revenue comes from.
He’s also putting a lot of trust in that stimulus funding, perhaps hoping we conveniently forget that the federal spigot can (and should) be turned off at any time.
I will give Jack Markell credit for one thing, however. When our governor faced a similar situation in 2007, he raised taxes by over $1 billion and then compounded the problem by getting $500 million in additional spending for health insurance for a small portion of those in Maryland who have no health insurance. At least on the surface it doesn’t appear that Governor Markell is planning any sort of ambitious spending programs with Delaware’s financial situation the way it is.
One other thought that comes to me is what the payback will be for the state employees. You can bet your bottom dollar that someplace that 8 percent cut will be restored to them, particularly if the state workforce is unionized. My guess is that restoring that lost income will be job one for Markell whenever the extra money is found to do so.
And even at 92% of their pay, the full complement of state workers makes for a potent political force. There’s strength in numbers and if Markell’s budgetary gamble pays off it’s a sure bet that those workers will be easily led back into his corner just in time for his re-election campaign in 2012.
