February 12, 2009

Markell Slashes $28.7 million From Fiscal 2009 Shortfall 

Governor will cut spending on vehicle fleet, travel and energy; is teaming with state agencies, Congressional delegation to secure stimulus dollars

WILMINGTON – Governor Jack Markell has been and will continue to work daily with Delaware’s Congressional delegation and across every state agency to bring stimulus dollars to the state to help meet our economic and budgetary challenges.  Well aware that no stimulus spending will be enough to solve the state’s projected budget shortfalls, he announced Thursday the first in a series of changes in state spending policies to cut the costs of government, rein in state spending and eliminate millions from the $109.2 million shortfall he inherited in the operating budget for fiscal year 2009.

Thursday’s reductions are expected to get the state $28.7 million closer to solving this year’s shortfall and will launch policy changes that will limit state spending on key costs moving forward into next fiscal year and its historic $606 million deficit.

“Getting Delaware’s economy moving again is the only long-term solution to these significant challenges. We are working as a team towards a federal stimulus bill that will bring quality jobs to Delaware and help defray the state’s significant costs from a crippled national economy,” Markell said. “But the short-term challenge remains and we must meet it. We will tighten our belts and reduce the state’s appetite for spending. We will cut costs.”

Markell instructed the Office of Management and Budget to slash non-essential state travel; cut the size of the state’s fleet of sedans and sport-utility vehicles by 20 percent and immediately transition to a zero-based approach with respect to the use of state fleet vehicles and take-home privileges.  In other words, the use of all fleet vehicles will need to be justified.  Previous use will not be viewed as sufficient justification to keep a car. 

Markell also ordered state agencies to reduce heating and cooling costs in each building by setting temperatures higher during the summer and cooler during the winter; drastically reduce the purchase of supplies; and halt most capital outlay expenses.

After taking a thorough line-by-line look at appropriations for fiscal 2009, Markell and the Office of Management and Budget found an additional $27.4 million in state agency budgets that can be returned to the General Fund. Those savings, along with the savings from the new state spending policies announced Thursday, will reduce the fiscal 2009 shortfall by $28.7 million.

Markell emphasized that the cuts announced today are only the beginning.

“Shortly after we have had a chance to fully analyze the impact on Delaware of the stimulus package, we will begin to make additional announcements about steps we must take to balance the Fiscal Year 2009 and Fiscal Year 2010 budgets,” Markell said.  “We expect those steps will be difficult and painful.”