“Building Delaware’s Future Now” Jobs Plan Invests Short-Term Increases In State Revenue to Put Delawareans to Work, Increase Economic Opportunity for the Future and Make Responsible and Targeted Reductions in Taxes and Debt
Part One of Three-Part Plan Unveiled Today at Events in Each County
Wilmington, DE –Governor Jack Markell today detailed the first part of a new three-part jobs plan called “Building Delaware’s Future Now.” To maintain fiscal discipline while investing in economic growth, the plan proposes responsible investments of new state revenues to addresses Delaware’s most important needs: creating jobs and expanding economic opportunity.
“Our top priority remains getting Delawareans back to work who need jobs and creating more economic opportunity for people who are already working. This balanced plan makes clear that job creation needs to be the top priority when deciding how we can best invest some recent increases in state revenues,” Markell said.
Projected state revenues have grown as the state begins to show signs of economic recovery. The Delaware Economic and Financial Advisory Council’s (DEFAC) latest two projections show an increase in anticipated revenue since December 2010. While the increase offers good news for the economy and state’s finances, and provides an opportunity to invest in our future, there is reason for caution, given that two DEFAC projections remain in this Fiscal Year and much of the added revenue comes from volatile sources like escheat or abandoned property. Escheat revenue has grown significantly the past five years, but remains a source of revenue that is vulnerable to changes that the state cannot predict or control. The state also faces additional budget pressures from the growth of programs like Medicaid and the drop-off of federal stimulus money.
The Building Delaware’s Future Now plan seeks to meet these budget challenges and ensure fiscal responsibility by:
* Limiting our dependence on less reliable sources of revenue, specifically abandoned property. The plan suggests the best way to accomplish this is to cap the amount of this revenue being used to fund the state’s operating budget, and to use any additional collections for one-time investments.
* Limiting budget growth, in recognition of both the volatility of some revenue streams and the ongoing financial pressures from Medicaid and other entitlement programs.
* Looking for opportunities to reduce taxes and pay off debt responsibly.
During events today in each of the state’s three counties, Markell detailed Part I of the plan – The Building Delaware’s Future Fund – which is designed to be a proactive investment tool to be used by the Governor and the General Assembly to make strategic investments that promote economic growth and job creation in Delaware. Revenues designated to this fund will come primarily from abandoned property. Investments from the fund will focus on maximizing job creation and job retention for Delawareans. These investments will help attract new businesses to locate in Delaware and facilitate an ongoing strategy for long-term economic growth. The fund’s investment strategy will also promote opportunities for new Delaware jobs in new and emerging industries with long-term growth potential.
“We can put people to work now in ways that will improve our quality of life, help attract new businesses and preserve some of our state’s great assets for years,” Markell said.
The Building Delaware’s Future Fund includes the following components:
·$40.0m New Jobs Infrastructure Fund – The General Assembly and the Markell Administration have worked diligently to attract new job-creating industries to Delaware. But locating new businesses can sometimes require significant state investments in our public infrastructure. To remain competitive, Delaware needs the tools and flexibility to address immediate needs for large new businesses that seek to locate here and to provide expansion opportunities for existing businesses. Without these resources, future opportunities to attract companies as Delaware did with Astra Zeneca and AAA could be lost. The $40m in funding would be supplemented with $20.0m of bonding authority set aside for this fund.
·$40.0m Transportation Trust Fund Supplement – Our state’s ability to keep up with the growing demands for a variety of transportation needs is eroding. The state must also make significant investments in maintaining its roads, as well as other multimodal transportation, including train stations, bike paths, air and water transportation, if we are to continue to have a quality transportation system. This fund represents a full restoration of $24.0m in escheat funds for the TTF, plus an additional $16.0m to begin to address these critical needs. A quality multimodal infrastructure is important to Delawareans who live here and businesses looking to grow here. Investments in our transportation infrastructure will also put more Delawareans to work.
·$35.0m Delaware Asset Preservation Fund – Some of our state’s most significant assets are falling or will fall into disrepair because of a lack of ongoing capital investments to maintain them. For example, some of our historic properties are not being adequately preserved; our parks infrastructure is deteriorating and in need of upgrades; and our state buildings and properties, even in the capital complex, are in poor condition. Offering residents and tourists high-quality state cultural and recreational opportunities improves our quality of life and makes our state more attractive to employers looking for a location to do business. Investing in capital improvements – as well as maintenance and restoration of state owned property – will also create hundreds of jobs for Delaware workers, while serving to preserve our state’s assets for generations to come.
·$10.0m Housing Preservation Fund – Preserving Delaware’s housing stock for families of low and modest incomes remain a significant challenge, made more difficult in recent lean years. This preservation subsidy will allow the state, through its Housing Development Fund, to further leverage federal funds and maximize our ability to maintain and expand our low-income housing capacity. Work to rehabilitate the housing stock will also employ hundreds of Delawareans.
·$10.0m Open Space Preservation – Preserving Delaware’s open space is important to maintain Delaware’s quality of life. Keeping the Governor’s commitment to restore these funds if revenues allowed, this proposal fully restores funding, which will help preserve critical open space for generations to come.
Tomorrow, the Governor expects to unveil at a manufacturing facility the plan’s proposals for responsible and targeted reductions in taxes and state debt. On Friday, he will detail how the plan suggests specific investments the state can make now to expand economic opportunity for years to come.