Balances expenses with revenues for first time in six years; stabilizes the county’s cash reserves
Watch livestream of budget address at www.facebook.com/nccde/videos
Wilmington, DE – Tonight, County Executive Matthew Meyer presented a Fiscal Year 2019 budget that makes difficult decisions to restore financial responsibility to county government and invests in core services that save lives and drives quality of life for all county residents.
“The prior administration handed us over $70 million in unpaid bills without the revenue to pay for them,” County Executive Meyer said. “For six years, New Castle County has dipped into savings to pay its bills and that must stop. The county budget I propose reflects difficult choices to fund our first responders, police, parks and libraries, sewers, and other services that save lives and drive our quality of life into the foreseeable future.”
Last February, shortly after taking office, Meyer raised the alarm that county government expenses are exceeding revenues and the structural budget deficit his administration inherited is growing quickly, and revealed a years-long pattern of tapping into savings to balance the budget. Over the past fourteen months, even as the new Administration worked to address this trend by cutting $6.5 million in expenditures, County government has achieved historic progress in public safety, action to combat the opioid epidemic, financial transparency and efficient government without making noticeable reductions in public services.
Inheriting unpaid bills and declining cash reserves
The county’s growing structural budget deficit is driven by decisions made by the previous administration to increase spending by millions of dollars each year without identifying the revenue to pay for it, including:
- agreeing to contracts with the county’s major employee unions that added over $65 million of new expenses over ten years;
- arranging in its 2015 bond sale to make interest-only payments until Fiscal Year 2020, increasing repayment costs by $3.4 million over the next 20 years;
- committing to an additional $1 million in county services annually;
- financing operating expenses like public safety equipment and computer purchases through capital borrowing, which is like putting day-to-day expenditures on a credit card, to be paid back by future county governments with interest, and;
- risking $3 million in taxpayer money with a loan to the Delaware Board of Trade
New Castle County’s cash reserve balance stands at $20 million today and expenditures are growing at three times the rate of revenue. At the current spending trajectory, even after accounting for the cuts initiated by the Meyer administration, the cash reserves will be nearly depleted in Fiscal Year 2019.
Setting a new course for fiscal responsibility
County Executive Meyer proposed a budget that for the first time in more than 6 years ensures that expenses do no exceed revenues. It reflects a balance between additional cost savings and increases in revenue:
Cost savings through smarter governance
Over its first 14 months in office, the Meyer Administration has reduced annual expenditures by about $6.5 million through reductions in personnel costs, revising county bidding procedures, terminating contractual services, streamlining operations, reducing non-paramedic overtime costs and reducing county vehicle purchases. For Fiscal Year 2019, the Administration will take new steps to enhance tax collections and will also reduce expenditures by an additional $4.5 million through attrition, elimination of more than 20 vacant positions, reductions in overtime and seasonal positions, reducing workers compensation costs, lowering operational costs and enhancing use of technology.
State revenue package
With the overwhelming support of County Council, the Meyer Administration has proposed three state proposals that would raise county revenues. The county has asked the General Assembly to 1.) restore the state reimbursement of paramedic services to 50%. Additionally, 2.) the county has asked the state to pass enabling legislation to treat the county the same as Wilmington, with the ability to charge up to a 3% hotel tax. Finally, 3.) it has asked the state to pass enabling legislation that allows the county to impose a cap on the first time homebuyer tax exemption. Together, these state revenue measures would raise millions of dollars each year.
Along with the cost savings through smarter governance plus the state revenue package, the proposed Fiscal Year 2019 budget includes a 15% increase in county property taxes to pay for increased spending decisions made by the previous administration. On average, that increase would amount to $65 more per year, $5.41 more per month, or 18 cents more per day on the average annual county tax bill of $433. This is the first proposed tax increase since 2009.
If the revenue portion of the proposed budget were not adopted, it would require the county to close the budget deficit through drastic spending cuts that would lead to substantial reductions in services to the public. Those reductions would, for example:
- compromise public safety by increasing 911 Center call wait times, slow paramedic response times and curtail proactive policing and police engagement with neighborhoods;
- force the closure of two major county parks and 12 county district parks and end mowing operations in all 200+ neighborhood parks;
- dramatically reduce library services through the closure of one of the largest libraries, along with a smaller library like Elsmere, and;
- shutter Rockwood Museum or end financial support for the county’s popular sports leagues
County Executive Meyer and members of County Council will host a series of community town halls in every council district to engage with members of the public about the proposed Fiscal Year 2019 budget and hear their feedback about the county’s spending priorities. The full schedule of those Town Halls is being posted online at www.facebook.com/nccde/events.
Continued investments in core services
The proposed Fiscal Year 2019 budget makes modest new investments in public safety, including $126,769 to create two additional Telecommuter positions in the 911 Center to assist in fire and medical response and $40,000 to expand the county’s innovative RAVE Panic Button, a safety solution that today employs technology to integrate 115 public and private facilities into the 911 Center to improve response to emergency situations. It also allocates $4,251,305 to maintain the county’s support to the fire service through grants to fund a portion of their operating costs.
Final budget totals
The proposed Fiscal Year 2019 Operating and Capital Budgets total $325,067,277.
General Fund Operating Budget: $200,620,549 (2.32% higher than FY2018 budget)
General Fund Capital Budget: $16,893,246
Sewer Fund Operating Budget: $80,112,713 (2.29% higher than FY2018 budget) *
Sewer Fund Capital Budget: $27,440,769
* The proposed Fiscal Year Sewer Fund Operating Budget includes a 12% sewer rate increase to fund increased personnel and benefits expenses and repair and rehabilitation projects. On average, that increase would amount to $30 more per year, $2.50 more per month, or 8 cents more per day on the average annual sewer bill of $250.
Contact: Jason Miller, Director of Communications, 302-545-1462