STATE OF FISCAL YEAR 2016 JANUARY 2015 Governor’s Recommended Budget VOLUME I Jack A. Markell GOVERNOR PRESENTED TO The 148th General Assembly FIRST SESSION Governor Jack A. Markell January 29, 2015 To the Members of the 148th General Assembly and to all Delawareans: In compliance with 29 Del. C. Section 6335 (a), I respectfully submit for your consideration the Fiscal Year 2016 Recommended Operating Budget and Bond and Capital Improvements Act for the State of Delaware. I present to you today a spending plan that is within constitutional and statutory limitations on appropriations and fully funds the State’s budgetary reserve account. Funding included in the Fiscal Year 2016 Recommended Operating Budget and Bond and Capital Improvements Act will help strengthen Delaware’s economy, continue our progress to provide the highest quality education for our children, enhance the overall quality of life in our communities and support Delawareans in need. I thank you for your consideration and look forward to working with the members of the 148th General Assembly to keep Delaware moving forward. Sincerely, Jack A. Markell Governor TATNALL BUILDING • DOVER, DELAWARE 19901 • http://governor.delaware.gov/ FISCAL YEAR 2016 STATE OF DELAWARE GOVERNOR’S RECOMMENDED BUDGET The Governor’s Recommended Budget is comprised of both summary (narrative) and detailed (numeric) information at statewide, department, appropriation program unit (APU) and internal program unit (IPU) levels. Volume I of the recommended budget contains the narrative presentation. Statewide financial schedules appear in the Appendix. Volume II contains the detailed numeric data at each level in the form of Delaware Budget System (DBS) reports, including recommendations. Please refer to the Table of Contents for page location of specific department information or financial statements. TABLE OF CONTENTS Page Financial Overview .................................................................................................................................... 1 Governor’s Budget Overview ................................................................................................................... 3 The Delaware Budget Process .................................................................................................................. 6 Financial Summary Budget Dollar Governor’s Recommended Budget Fiscal Year 2016 ..................................................... 7 Estimated General Fund Revenue ........................................................................................................... 8 General Fund Budget by Department by Fiscal Year............................................................................. 9 Financial Charts Fiscal Overview .................................................................................................................................... 10 Enacted and Recommended Funding Sources ...................................................................................... 11 DEPARTMENT NARRATIVES Legislative .................................................................................................... (01-00-00) ........................... 12 Judicial ......................................................................................................... (02-00-00) ........................... 17 Executive ..................................................................................................... (10-00-00) ........................... 38 Technology and Information ........................................................................ (11-00-00) ........................... 64 Other Elective .............................................................................................. (12-00-00) ........................... 70 Legal ............................................................................................................ (15-00-00) ........................... 79 State ............................................................................................................. (20-00-00) ........................... 84 Finance ......................................................................................................... (25-00-00) ......................... 112 Health and Social Services .......................................................................... (35-00-00) ......................... 120 Services for Children, Youth and Their Families ........................................ (37-00-00) ......................... 146 Correction .................................................................................................... (38-00-00) ......................... 157 Natural Resources and Environmental Control ........................................... (40-00-00) ......................... 171 Safety and Homeland Security ..................................................................... (45-00-00) ......................... 190 Transportation .............................................................................................. (55-00-00) ......................... 208 Labor ............................................................................................................ (60-00-00) ......................... 224 Agriculture ................................................................................................... (65-00-00) ......................... 235 Elections ....................................................................................................... (70-00-00) ......................... 246 Fire Prevention Commission........................................................................ (75-00-00) ......................... 251 Delaware National Guard ............................................................................ (76-00-00) ......................... 257 Advisory Council for Exceptional Citizens ................................................. (77-00-00) ......................... 259 Higher Education ......................................................................................... (90-00-00) ......................... 261 Education ..................................................................................................... (95-00-00) ......................... 270 APPENDIX State of Delaware Organization Chart ................................................................................................ 279 Explanation of Financial Schedules ..................................................................................................... 280 General Fund - Consolidated Statement of Revenues and Expenditures - Exhibit A ....................... 281 All Funds - Comparative Consolidated Statement of Revenues and Expenditures - Exhibit B ........ 286 Capital Improvement Fund Expenditures - Exhibit C ....................................................................... 288 Definition of Budgetary Terms ............................................................................................................. 289 i FINANCIAL OVERVIEW RECOMMENDED APPROPRIATIONS Personal Income Tax - This tax, closely modeled after federal income tax law, is progressive in nature, The Governor’s Fiscal Year 2016 Recommended with marginal rates from 0 to 6.60 percent. DEFAC General Fund Operating Budget is $3,900.0 million. In estimates (after refunds) are $1,222.3 million for addition, Governor Markell has set aside $45.4 million Fiscal Year 2015 and $1,277.1 million for Fiscal Year for Grants-in-Aid and $15.0 million in dedicated cash to 2016. the Bond and Capital Improvements Act. Total Franchise Tax and Limited Partnership/Limited recommended Fiscal Year 2016 General Fund Liability Company Tax - The Franchise Tax is appropriations are $3,960.4 million. Total appropriations imposed upon domestic corporations incorporated in represent 98.0 percent of projected net Fiscal Year 2016 Delaware and based on either the outstanding shares revenue plus projected carryover funds, which is within of stock of a corporation or on gross assets. In the constitutionally mandated limitation on addition, every domestic Limited Partnership and appropriations. Limited Liability Company formed in Delaware and The Governor’s Fiscal Year 2016 Recommended Bond every foreign Limited Partnership and Limited and Capital Improvements Act totals $385.8 million. Of Liability Company registered to do business in this amount, $246.8 million is recommended for state Delaware is required to pay an annual tax of $300. capital projects and $139.0 million is recommended for DEFAC estimates (after refunds) for these categories transportation projects. Of the $246.8 million supporting are $889.3 million for Fiscal Year 2015 and $904.3 state projects, $197.5 million is General Obligation Bond million for Fiscal Year 2016. Authorization, $15.0 million is General Fund cash and Business and Occupational Gross Receipts Tax - $34.3 million is reprogramming. This tax is imposed on the gross receipts of most Fiscal Year 2016 appropriations are based on Delaware businesses with tax rates ranging from 0.0945 percent Economic and Financial Advisory Council (DEFAC) to 1.9914 percent, depending upon the category of the revenue and expenditure estimates as of December 15, business activity. DEFAC estimates are $226.9 million 2014. Governor Markell has recommended adjustments for Fiscal Year 2015 and $237.8 million for Fiscal to these figures that will provide a net increase to the Year 2016. DEFAC revenue estimates of $65.0 million in Fiscal Lottery