DOVER – The House passed a $6.1 billion operating budget for Fiscal Year 2025 on Thursday, approving a plan that upholds the Delaware General Assembly’s commitment to state workers and retirees while making new investments in Delaware’s public schools and other critical programs that support some of the state’s most vulnerable residents.
The budget, along with a $168 million supplemental spending plan consisting of one-time expenditures and contingency funds, was passed by the Senate on Thursday and now heads to Governor John Carney for his signature.
Funds will also be held in the budget stabilization, a reserve to help prevent future economic downturns from disrupting core state services. Those reserve funds include a $50 million allocation intended to help cover future raises for educators, as part of the Delaware General Assembly’s ongoing effort to bring base starting salaries to $60,000.
Both budget bills were developed during 16 days of public budget hearings held in February and May when the Joint Finance Committee reviewed Governor John Carney’s recommended spending proposals and solicited input from state officials, lawmakers, and the public on how best to invest state revenues.
“I’m proud of this budget and what it represents to Delawareans – that we value our workers, teachers, seniors, healthcare workers, parents and children,” said Rep. Kim Williams, co-chair of the Joint Finance Committee and chair of the House Education Committee.
“This budget not only addresses immediate needs, but also invests in the future of our state, providing critical funding for education, healthcare, and social services,” she said. “For the third year in a row, we were able to deliver well-deserved raises for our state workers and educators, bolstering our workforce, ensuring we remain competitive with neighboring states, and enabling us to attract and retain top talent.”
Senate Bill 325, the operating budget bill, would fund a third year of state employee pay raises with all merit employees slated to receive a 2% increase.
Education employees receive a minimum of 2% raise, but teachers, nurses, etc. and non-administrator classroom staff receive raises closer to 8% as recommended by the Public Education Compensation Commission (PECC). The base pay for paraprofessionals, custodians, secretaries, bus drivers and food service workers will have increased by 6-18% during the same period, depending on their job classification.
Meanwhile, Senate Bill 326, the one-time supplemental budget, would fund cost-of-living increases of up to 2% for most State of Delaware pensioners, depending on their retirement date.
“The spending plan we put forward today is a responsible, balanced budget that reflects Delaware’s solid economic growth over the last year,” said Sen. Trey Paradee, chair of the Joint Finance Committee and the prime Senate sponsor of both spending bills.
“That expansion will allow us to continue making critical investments in our schools, our health and the public services our communities depend on, all without raising a single tax for the seventh straight year,” he said. “I want to thank my colleagues on the Joint Finance Committee for their diligence, their hard work and their conviction that building a strong future for all Delawareans demands that we stay competitive in the hunt for skilled labor through a strong job market and growing competition from our neighboring states.”
The operating budget bill for July 1, 2024, to June 30, 2025, would also make substantial investments in critical services used by vulnerable Delawareans, including seniors in skilled nursing facilities, people with intellectual and developmental disabilities, and families struggling to cover the cost of childcare.
SB 325 includes $7 million in state funding for higher Medicaid reimbursement rates paid to long-term care facilities that will match another $10 million in federal funds, bringing the total state and federal investment over the last two years to $30 million.
A combined $3.4 million in additional federal and state funding would also be allocated to cover an increase in the Medicaid reimbursement rates for the direct support professionals who serve people with intellectual and physical disabilities when Delaware’s $15/hour minimum wage takes effect in January. Another $3 million will be used to similarly enhance the Medicaid reimbursement rate for home health and personal care workers.
Other notable highlights of the FY 2024 operating budget include:
- $132 million added to cover the state’s share of employee and retiree health insurance premiums to ensure existing health benefits remain intact;
- $94 million added to cover inflationary costs and higher usage of Medicaid services;
- $17 million added to continue providing enhanced mental health support in Delaware public schools;
- $10 million increase in Opportunity Funding used to provide additional support for low-income students and multilingual learners;
- $10 million to Delaware’s Purchase of Care program;
- $5 million added for the SEED and INSPIRE scholarship programs;
- $3 million added to hire 20 early literacy coaches in Delaware public schools and fund literacy-related professional development;
- $2 million added for the First State Promise scholarship program;
- $1 million added for an expansion of the nursing program at Delaware Technical Community College.
Other highlights of the one-time supplemental budget include:
- $56 million allocated to the Other Post Employment Benefits Fund to cover the cost of future retiree healthcare needs;
- $8.9 million for primary and general election costs;
- $3.5 million for residential and childhood lead prevention and remediation programs;
- Funded a voluntary middle and high school cell phone pouch pilot program to reduce classroom learning distractions.
- Funded a Pre-K Summer Tutoring program that will use one-on-one and two-on-one instruction with evidence based reading methods.