By Rachel Sawicki

DOVER — Gov. John Carney’s proposed FY2023 budget has $88.7 million set aside for compensation and pay equity.

To attract workers to state employment, Delaware is pushing forward on the path to a $15 minimum wage. The proposed budget sets aside $88.7 million to do so, which also includes increased merit pay scales or a 2% pay increase, funding current negotiated wages and steps, and a $500 one-time bonus for state retirees.

The Ability Network of Delaware responded Thursday to a lack of investment in “human service infrastructure.” Executive Director Thomas Cook said in a release that the ongoing workforce crisis in services for people with intellectual and developmental disabilities caused by chronic underfunding has worsened due to COVID-related staff shortages.

A survey of Delaware providers conducted at the end of 2021 by the Department of Health and Social Services shows immense gaps in workforces and failing economic recovery, he said.

“We are still tens of millions of dollars short of where the state government’s own study says we must be,” Mr. Cook said. “We need to aggressively build on the progress to date, so that we can fill staff vacancies that are at an all-time high.”

The budget proposal allocated money to help families, putting $1.4 million to support extended postpartum Medicaid coverage, $1.5 million for the development of a Therapeutic Foster Care Program, around $1 million to support the growth of the Delaware children insurance program, $3.7 million to increase support for expungement programs, and $735,000 to add crisis beds in Kent and Sussex counties. Childcare providers and workers will see $11.5 million in increased support.

The budget also enables support for tax cuts legislation making its way through the General Assembly this session. HB285 includes exempting 2021 unemployment insurance benefits from state personal income taxes, which will amount to $25.2 million over two years, and is up for debate in the Senate on Wednesday afternoon.

Other bills would double the volunteer firefighter tax credit, which will cost $1.8 million. An extension to military pension exclusions to attract highly skilled, young military retirees to Delaware’s workforce will cost $1.5 million, and $667,000 will promote college and “ABLE” Plan savings.

The Office of the State Treasurer showed support for a secure-choice retirement program and income tax deductions included in the bill. Gov. Carney included funding to cover a portion of the startup cost of the Delaware Expanding Access for Retirement and Necessary Savings Program as proposed by House Bill 205. The program particularly helps middle- and low-income workers who lack access to employer-sponsored plans and small businesses that are unable to provide such a benefit.

“DE EARNS addresses three major priorities of my office; bolstering retirement security and readiness, creating pathways to economic empowerment, and promoting a culture of financial excellence,” State Treasurer Colleen Davis said. “I am grateful to the governor and his budget team for including the necessary funding in their comprehensive spending plan.”

Additionally, the recommended budget also includes funding to offset tax benefits to Delawareans who contribute to two state-sponsored savings plans.

House Bill 145, sponsored by Rep. Krista Griffith, D-Fairfax, and Sen. Trey Paradee, D-Dover, creates a personal income tax deduction of up to $5,000 per year for contributions to an ‘“Achieving a Better Life Experience” account, and up to $1,000 for contributions to a DE529 account.

For employers, $11.4 million in cuts will continue to protect unemployment insurance contributory employers from COVID-related claim costs and save an estimated 6,000 new employers, mostly small businesses, from pandemic-related rate increases.

Majority House Leader Representative Valerie Longhurst, D-Bear, said the budget overall is “a good start” and continues to prioritize long-term investments in Delaware’s schools, communities and economy.

“In the near term, I’m pleased to see a commitment to better recruit and retain state employees, while giving state retirees a much needed bonus,” she said. “As a champion for mental health in Delaware, I am also heartened to see the Mental Health Loan Forgiveness Program we established last year be made permanent. Now more than ever, we need an influx of qualified professionals to combat the growing mental health crisis in our state.”