Gov. Ruth Ann Minner yesterday said Delaware faced a tight budget year in 2008 in her last state of the state address..
Minner said that in the present economy, the state should not start many new programs, but rather it should build up initiatives already begun.
“We face a very tight budget year, so we will continue to provide the best possible services for the people of Delaware while keeping costs at a minimum,” Minner said.
Despite being cautious about the future, Minner noted that Delaware continues to be one of a small group of states in the nation to maintain a triple-A bond rating from all three rating agencies.
Since Minner took office in 2001, the state has created or retained nearly 65,000 jobs, Minner noted. Minner cannot run again due to term limits.
Delaware ranks number one in industry research and development investment and improved from a ranking of 46 to second in the nation in the number of jobs in rapidly growing companies, according to a 2007 report by the Kauffman Foundation. Additionally, the state’s legal environment for business continues to be ranked first in the nation by the U.S. Chamber of Commerce, Minner said.
Fitch Ratings senior director Laura Porter noted that while November numbers for employment in Delaware show a 0.3% increase, employment has “definitely dropped over [2007].”
Revenues from personal income taxes declined slightly over the last year as well, Porter said. Additionally, Delaware’s lottery revenues represent about 8% of its general fund revenues, and it has “started to see the impact” of neighboring Pennsylvania’s slot machines, she said.
Still, the state’s most recent revenue forecast in December shows that the state is on track this year. Revenue receipts for fiscal 2008 — ending June 30 — are excepted to rise 2.7% from last year. And for 2009, revenue receipts are expected to be 4.3% higher than the state’s current fiscal 2008 forecast.
Also, Delaware’s budget reserve account is funded at 5% of revenues, and the state has not drawn those reserves once since the account was started in 1980, Porter said. Porter also noted that Delaware is a high-wealth state, has well-funded pension systems, and has a number of budgetary constitutional protections in place.
