Governor Carney’s Address to the General Assembly
March 30, 2017 – As prepared for delivery
Lt. Governor Hall-Long, Mister President Pro Temp, Mister Speaker, Members of the 149th General Assembly, Members of the Cabinet, Distinguished members of the Judiciary, invited guests, and my fellow Delawareans:
In the 10 short weeks since I was sworn in as governor, I have been traveling up and down our state doing town hall meetings. From Seaford and Lewes, to Dover and Pike Creek, Newark and Wilmington, I’ve spoken with thousands of Delawareans. I’ve been joined by almost twenty members of the General Assembly.
The topic was the budget. But we got an earful on a lot of important issues. Some people came to complain. Others came looking for help. Others came looking for support.
But we all seemed to agree on one thing: business as usual has to change. If we are going to tackle the tough issues that confront us, we need to get our financial house in order. We need a budget reset — a new plan to set us on stronger financial footing and make our state more competitive. A long-term solution to a nearly $400 million budget deficit.
As Senator Lavelle and many others have put it, if you’re in a hole, the first thing you do is stop digging. I’ve proposed an operating budget that grows government spending less than three-tenths of one percent. It contains a 50-50 mix of spending cuts and new revenue. It’s built on the principle of shared sacrifice.
Our north star in building this budget was making Delaware more competitive. While we went line by line, deciding which programs to cut and which to preserve, which taxes to raise and which to leave untouched, we asked ourselves the same question over and over again: “How will this decision impact our ability to grow our economy and compete?”
We worked hard to be forward-looking. Focused on the future. Not to be short-sighted. To raise taxes only where our economy could bear it. To continue making investments critical to our next generation.
It would be easy to get lost in the doom and gloom of budget cuts and tax hikes. There is something in our budget for everyone not to like.
But there is more to this budget than that.
Our dreams for our children’s future don’t disappear because of a budget crisis.
The needs of our state’s most vulnerable become no less acute.
We cannot and will not let our budget challenges halt the wheels of progress.
We have work to do and we will do it. Here’s how.
The best way to move beyond a fiscal crisis like the one we’re in is to grow our economy. Stronger economic growth, and more and better jobs, helps Delaware families. And it helps us fund the state’s budget.
We need a new, more dynamic, economic development strategy. One that can leverage the resources of our business sector, as well as higher education and not for profits. The Delaware Economic Development Office needs to be at the forefront of moving Delaware into the 21st century economy. So my first act as governor was to find a way to energize our economic development efforts. We’re going to do that by bringing private sector involvement into DEDO.
A new and improved DEDO, a public private partnership, will be put to work right away creating job growth projects like Incyte’s expansion on Augustine Cutoff. It will look for ways to strengthen our pipeline of skilled workers by supporting efforts like Zip Code Wilmington and the Horn Program at the University of Delaware. It will foster a culture of innovation through partnerships with the Star Campus and the Delaware Technology Park. And it will help bring a new group of job creators with innovative ideas to our state.
The DEDO working group will issue its report next week. Then, we will get to work with the General Assembly to make DEDO more effective at attracting and retaining good-paying, middle class jobs of the future.
One of the best ways to create those jobs is to redevelop existing facilities that are unused or underutilized. That’s what’s taking place right now with JP Morgan’s reuse of buildings once owned by Astra Zeneca. Today in Delaware, the financial services sector is the biggest job creator in our state — and we want it to continue to grow. We are working on a similar strategy for turning underutilized space at the DuPont Experimental Station into an economic driver for our state.
We will also work to redevelop the brownfields that are remnants of old industrial sites, like the old steel plant in Claymont, the General Motors auto plant in Newport, and the Seaford nylon plant. One example of this type of effort is the Port of Wilmington’s recent purchase of the Chemours site at Edgemoor. Expansion is vital to the long-term viability of our port. Attracting outside investment and new business will allow us to create jobs and reduce taxpayer subsidies. This in turn helps solve our budget challenges. Another opportunity is the tremendous redevelopment that has already occurred on Wilmington’s Riverfront. With a new bridge over the Christina slated to begin by early summer, I believe we can create thousands of new jobs in the City of Wilmington.
Other brownfields will require a fresh look at our venerable Coastal Zone Act. I don’t underestimate how hard this will be. Or how important it is to protect the beautiful natural areas along our coastline. But, I’m committed to working with all the relevant stakeholders to modernize the Coastal Zone Act. Our goal is to allow redevelopment in parts of our state that were once home to good-paying manufacturing jobs. I believe we can make reasonable changes to this law that will protect our environment while allowing our economy to grow. I want us to work together over the next few months so that we leave here in June with reasonable reforms that will leave our state better off.
The focus of a revamped economic development strategy, though, needs to go beyond attracting and retaining big businesses. Agriculture remains the bedrock of the Delaware economy. The best way to preserve agriculture is to help family farmers be more profitable. One way we can do that is to help farmers in their nutrient management efforts to protect Delaware waterways. Our administration will work to develop better approaches to accomplish that objective.
Here again, innovation is the key to our future. The most important part of our long-term strategy is building on the resources we already have to help startups and large and small businesses grow and create jobs. Delaware already has a lot of the tools in place to build an economy based on innovation and entrepreneurialism. Delaware’s newest incubator, DTP @ STAR, opened last year and was full on Day 1. And resources like the Delaware Technology Park, New Castle County Chamber’s Emerging Enterprise Center, and The Mill in the old Nemours Building provide affordable and supportive space for entrepreneurs to develop their businesses. We will seek new opportunities to build more space like this and attract the entrepreneurs that will reshape our economy.
Once we have them here, we need to keep them here so Delaware can benefit from that business and job growth. In most cases, that means access to capital. We will put in place a plan to ensure that businesses that start here, can afford to grow here. We’ll put in place the resources to make sure Delaware entrepreneurs can access the capital they need, when they need it. Our state will take full advantage of the transition to an innovation-based economy.
We have always been a state that depends heavily on exports — from poultry to highly engineered products in Delaware’s biotech industry. We are pushing harder now to get more small businesses into export markets. We’ve developed the state’s first strategic export plan. Earlier this month, eight small businesses went to Germany on a trade mission organized by our Global Delaware team from the Department of State. Those companies will generate millions of dollars in new sales, while creating more jobs here at home.
Perhaps more important than anything we do to strengthen our economy is getting our schools on track, and making sure that every child is college- or career-ready. With fewer resources, we need to make better use of what we have, beginning with the Department of Education. I’ve asked Secretary Bunting to lead my effort to reorganize the Department of Education so that it’s more responsive to the needs of teachers and administrators. Educators should see the Department of Education as another player on their team — not an obstacle to progress or a drain on resources.
Starting in her first week in office, Secretary Bunting has been spending time in classrooms, with teachers, in our most vulnerable schools. She’s asking them what they need to be successful, and designing a plan to get them what they need. For each school and district, the needs will be different. One school may need a stronger pre-school program so students arrive at kindergarten ready to learn. Another may need an after-school program. Our solution will not be one size fits all.
We will be coming back to the legislature and school communities with our plan to reform the Department of Education. We will make the Department responsive to the needs of the teachers and students in the classroom.
The budget I proposed last week had almost no new spending. One exception was in educating our most vulnerable students. My budget includes a down payment on Education Opportunity Grants, a program that will direct more resources to our neediest students. The debate over district boundaries in New Castle County has been raging for years, and we will continue to engage on those issues. But we should not allow the politics of redistricting to distract us. This is about the kids. We need to incentivize innovation in the classroom, and we need to start now. Having the best schools will enable us to have the strongest economy.
A strong economy and good-paying jobs go a long way toward making most families stable and healthy. But for too many Delaware families — and far too many of our state’s children — a growing economy is not enough. These families, these kids, need our help. That’s why I’ve re-established the Family Services Cabinet Council, which meets for the first time next week. Many Delaware families continue to face significant challenges — including the high cost of child care; violence and poverty in their neighborhoods; the impact of caring for an aging family member; or the challenges of navigating an economy in transition.
The Family Services Cabinet Council will spearhead a new effort to coordinate public and private services that are often fragmented. The Council will propose changes to current programs to improve the delivery of state services. We will tackle the hardest problems: Reducing the number of substance-exposed infants. Increasing the availability of re-entry programs in prison. Expanding community center hours in crime-ridden neighborhoods. I will chair this Council myself, and my cabinet secretaries will be engaged personally. And we will hold ourselves accountable for real results.
A major impediment to families being stable and successful is the opioid crisis plaguing our state and country. When last measured, Delaware had the nation’s fifth highest overall rate of opioid sales. And in too many cases opioid abuse contributes to our state’s tragic heroin problem. Effective April 1st, we will impose new protections for the safe prescribing of opioids. These new regulations will be some of the most far-reaching in the nation. Working with Attorney General Denn, we have introduced new legislation to allow expanded use of the state’s prescription database to better target doctors who overprescribe.
Prevention is key. But, we also need an all hands on deck approach to save the lives of those battling opioid and heroin addiction. I will continue the work to increase the availability of residential treatment, recovery homes, and expanded services for outpatient treatment slots. Delaware’s Prescription Drug Action Committee has developed a set of recommendations from stakeholders across the spectrum. I will make this body permanent and give it the real authority to implement a strategic approach to battling addiction in Delaware. I’ve asked Lt. Governor Hall-Long to take the lead on coordinating state efforts in this area.
I’ve talked about how our government can be a more effective leader in the economy, education, and helping Delaware families that are struggling. But we also need to be a better leader in another important way: As the state’s largest employer, we need to set the example as a workplace that is fair, diverse, and free from discrimination. This is an area where actions speak louder than words. So earlier today, pursuant to Executive Order 6, the Office of Management and Budget transmitted to me a statewide antidiscrimination policy. This uniform policy will mean better, standardized inclusion and diversity training for state personnel. And it will ensure that state workers know where to go if they aren’t being treated fairly.
But that is not enough. In the coming weeks, I will submit a proposal for creating a separate agency whose sole focus will be Human Resources. This agency will include a Chief Diversity Officer, whose sole mission will be to promote diversity and inclusion throughout state government. The Markell Administration commissioned a report to study issues of discrimination and the lack of diversity and inclusion in state government. The report provided a series of recommendations which the Chief Diversity Officer will be responsible for implementing. I believe it is the right thing to do and I ask the General Assembly to support this effort.
No matter how well you plan for the transition as a new governor, no one is ever prepared for the tragedy that occurred on February 1st, 15 days after we took office. We lost a correctional officer, Lt. Steven Floyd, and three other correctional employees were taken hostage at James T. Vaughn Correctional Center. One of those hostages is Officer Joshua Wilkinson, who’s here in the chamber with us today.
12 days after this horrible incident, we launched an independent review, led by former Justice Henry DuPont Ridgeley and former Judge Bill Chapman. I will receive their recommendations by June 1 and will work quickly with the leaders of the Correction Committees in the House and Senate to develop a plan of action. It will not be a report that collects dust on a shelf. Officer Wilkinson: I pledge to you that we will make real improvements and we will make them quickly.
All of these things, of course, will happen in the context of closing a $400 million budget deficit. Beyond the imperative to balance the budget, I believe we in government have a strong obligation to make sure we’re spending tax dollars wisely. That’s why I issued Executive Order #4 to create the Government Efficiency and Accountability Review Board – known as GEAR. This won’t be a one-time audit. Led by Secretary Geisenberger, this will be a long-term commitment to process improvement and efficiency in state government. The board will consider small things and big things – from eliminating out-of-date administrative requirements that cost time and money to eliminating boards or programs that have outlived their usefulness.
You can’t fix a structural budget problem without addressing the overwhelming cost of health care. Healthcare costs represent $1.6 billion dollars in a $4 billion budget — $800 million for Medicaid and $800 million in employee and retiree healthcare costs. I’ve directed Secretary Walker to design a comprehensive strategy for reducing the growth of these costs.
In addition to these efforts, I’ve proposed a budget that cuts state agency spending by 4.5%. It cuts school district budgets, lowers the Senior Property Tax Credit, and reduces funding for grant-in-aid. It raises taxes on the very largest businesses incorporated here. And it raises personal income taxes on Delawareans in a way that requires those who can afford to pay more to do so.
We have a lot of elected officials in the room today. I think I can speak for all of us when I say that none of us ran for office so we could cut our constituent’s favorite program or ask them to pay more in taxes.
I know that all of you in the General Assembly are tired of sitting here year after year talking about how we can climb out of another budget hole. Some things are beyond our control, but this one is not. It’s within our power, this June, to put ourselves on a more sustainable financial footing. My budget does that, and I look forward to working with each of you on your ideas to do the same. What I will not do is use budget gimmicks or one-time fixes to bail us out on June 30, only to be right back here next year giving the same speech.
At our budget town hall in Milford, a gentleman stood up and said to me, “As long as government’s cutting costs and doing more with less, I’m willing to pay a little bit more. But it’s got to be a fair trade.”
I heard this sentiment echoed up and down the state. Delawareans are willing to chip in and help with our budget problem, as long as their neighbors are asked to do the same. My budget is built on this principle of shared sacrifice. This isn’t going to be easy. But we’ve got a responsibility that’s more important than any temporary political pain.
It’s our responsibility to keep our state a great place to live and work and raise a family. A state ready to compete in the economy of the 21st century.
I know we all want that. And I know we all understand that means tough choices today that will pay off for our state tomorrow.
I look forward to working with each of you to get the job done right.
Thank you all. God bless you, God bless the State of Delaware, and God bless our great United States of America.