State budget smoothing plan still needs work (Whipple)

The sales pitch for a “budget smoothing” amendment to the Delaware Constitution) has been quite superficial, as Rep. John Kowalko noted in a recent column. Rep. Kowalko urged a pause in the action so the “intended and unintended consequences” of HB 460 can “be discussed with the entire General Assembly and the public over the course of the summer.”

I agree, and would offer three points for discussion.

1. The budget smoothing plan includes contemplated tax changes (see HB 460 synopsis) that haven’t been put on the table. Let’s see the whole plan before conclusions are reached.

2. Some $232 million in the Budget Reserve Account (aka “rainy day fund”) would be transferred to a new Budget Stabilization Fund. Currently, funds in the BRA can only be tapped with a 3/5 vote. The proposed amendment might make it possible to gradually utilize this balance with a simple majority vote. Why is that a good idea?

3. The proposed constitutional amendment includes obscure technical references, e.g., “Delaware population growth plus the growth in the implicit price deflator for state and local government purchases.” Isn’t there some way of expressing the intent in a more understandable way?

William Whipple III
Middletown



HB 460 had already been shelved by the time this letter was published, basically as the result of concerns by Democratic legislators that the proposed constitutional amendment might curtail their ability to appropriate funds for needed programs in "fat" revenue years. The governor expressed disappointment in this outcome, and subsequently signed an executive order imposing budget smoothing principles on his budget staff, which however will not be binding on the legislature. Carney signs "budget smoothing" order, Scott Goss, News Journal,
7/1/18.
© 2018 Secure America’s Future Economy • All rights reserved • www.S-A-F-E.org