Saturday, March 5, 2011

Job Losses and Toll HIkes: Markell's legacy of pain

Since Jack Markell took office in 2008, following 8 years of the most corrupt administration in Delaware's modern history, Delaware has indeed experienced "change".  Both Governor Markell and President Obama promised a healthy dose of change in their 2008 campaign.  For my money, I'd trade all of the change they gave us for some jobs.

Since Jack Markell took office and named Alan Levin as Secretary of the Delaware Economic Development Office, Delaware has experienced a net loss of 36,000 jobs.  That means that today, there are 36,000 Delawareans who cannot find work.  Meanwhile, as the layoffs keep coming, Markell and Levin do nothing.  Markell just inked a deal with China, the largest foreign holder of U.S. debt, to invest in Delaware bio tech.  In reality, this deal doesn't do squat to create jobs.  It provides Markell with a photo op and a favorable news story which gives the appearance of him actually doing something.  If anything does come of it, Markell has just invited China, America's largest debt holder, to purchase their way into the Delaware economy.  Since Markell took office, Delaware's industrial footprint has died.  Some may think that is by design, and while that might seem outrageous, there certainly has been a real and wholesale loss of blue collar jobs in Delaware's private sector.  I find it difficult to believe that Markell and Levin don't WANT to create jobs but I submit to you that GM and Chrysler (closed in 2008 under the Minner Administration where Markell served as Treasurer) left the state which left thousands of Delaware Autoworkers without jobs, Valero closed and shed nearly 1000 jobs, HSBC and Wilmington Trust cut more than 1200 jobs, DuPont and AstraZeneca have laid off more than 1,000 workers and scores of small businesses around the state have closed.  Even with the purchase of the Chrysler plant by U of D, Fisker moving into the GM Plant and the new owner of the Valero plant moving in, Delaware faces a net loss of 36,000 jobs.  In January alone, Delaware shed 700 jobs and the unemployment percentage stayed flat at 8.5%.  Even the News Journal, not known for displaying the failures of Delaware Democrats, has had to admit that the employment picture in Delaware is not good.  The Markell Administration has consistently talked about the budding Delaware bio tech industry, green energy jobs, healthcare and financial services as being Delaware's economic future yet the only thing materializing in those areas is government spending and job cuts.  Healthcare dropped 600 jobs in January while banks and finance companies have been shedding Delaware jobs by the thousands since the passage of the financial regulatory bill. 

Regulations, especially as they pertain to the environment in Delaware have increased and so has Delaware's spending.  In fact, Delaware's personnel costs and the cost of government services are so high that there isn't an opportunity for the state to commit to creating a pro-business climate.  Markell and the General Assembly have been content to focus on social issues like homosexual equality and gimmicks like Markell's bottle bill rather than to address Delaware's problems with job creation and spending.  In 2011, Delaware faces a $377 million budget shortfall that must be closed by the General Assembly and the Markell Administration.  This is the 3rd straight increase in budget gaps under Markell and his accounting gimmicks and tricks will only work for so long before it becomes undeniable that Delaware has a spending problem.  I only hope that enough of us wake up by 2012 to stop this train before it totally derails.

Speaking of shortfalls, DelDOT (whose budget is a mere 8.5% of the entire Delaware budget...dwarfed by education and health and social services) is facing a shortfalls totalling "$1 Billion over the next 5 years and more than $3.7 Billion through 2023" says Jeff Montgomery of the News Journal.  State Senator Robert Venables from Laurel doesn't think the General Assembly understands the severity of the problems (and he's a Democrat by the way) and outgoing DelDOT head Carolann Wicks says that "We're now down to the core programs, primarily,".  Still, the following excerpt from Jeff's story is chilling:

Filling the budget gap without cutting back on projects would require more than $169 million in new revenue just for the budget year that begins July 1, an amount DelDOT officials said could be raised with $85 million in new taxes or fees and an additional $85 million in borrowing.

By 2023, however, the single-year shortfall could grow to nearly $498 million.

Confining DelDOT spending only to "core" maintenance, safety, operating and vehicle replacement spending would still leave a $125 million gap next year that would rise to a cumulative $545 million by 2016 and nearly $1.4 billion by 2023, officials said.

State officials have blamed a combination of rising costs, growing demand for services, inadequate funding and rising debt-service payments for the trust fund's quandary. Payments on past loans and interest alone now amount to about $123 million a year.
Folks, this is STAGGERING.  Even if we ONLY spent money on core services from DelDOT, we're looking at a $125 million gap in 2012.  That's no new roads, no updates that aren't critical, no new bus routes, etc.  The blame from the state officials goes not on poor planning, excessive borrowing and administration failures but on the INTEREST for the debt they ran up.  Folks, the payments for the past debt alone total $123 million per year.  So next time you hear that Delaware's financial situation is better than the federal government and that we have nothing to worry about, remember that DelDOT...who makes up just 8.5% of the state budget pays out an amount equal to about 1/3 of the FY2012 budget shortfall.

There is an interesting sidebar in Jeff's story:


Impose $1 per barrel fee for crude oil barge transfers in Delaware Bay: $100 million
Raise Del. 1 weekday toll to $2, weekend toll to $3: $36.4 million
Raise all I-95 tolls by $1: $24.5 million
Shift DelDOT operating funds from Trust Fund to General Fund: $14.1 million yearly for 10 years
Eliminate trade-in discount for new vehicle document fee: $12.2 million
Charge toll for new Indian River Inlet bridge: $7.6 million
Hike vehicle registration fee by $10: $6.7 million
Raise Del. 1 commercial vehicle toll by $1: $4.5 million
Increase gas tax by 1 cent: $4.5 million
Shift Paratransit service costs to General Fund: $4.3 million yearly for 10 years 


$1 increase in Del. 1 commercial tolls: $4.5 million
10 percent fee on sale of Delaware tags: $15,000
Illegal sign fees: $9,000
Shift Paratransit service costs to General Fund: $4.3 million yearly for 10 years
Double current $25 fee for driver's license suspension reinstatement: $510,000
$10 additional for driver's license permanent renewal: $87,000
Increase revocation reinstatement to $200 from $143: $230,000
Double late registration renewal fee to $20: $831,000
Double over-size vehicle permits to $40: $903,000
Double fee for paratransit trips outside regular transit corridor: $2.1 million
These are the ways that the special planning board that the Markell Administration created has come up with to "fix" the problems.  You'll notice that there are a lot of fee increases and toll charges but no real cuts.  Oh, and you'll see that they recommend shifting costs...which only hides the costs in the General Fund budget instead of spotlighting it like the rest of the transportation spending.

This is how Delaware Democrats deal with our problems.  They bury them.  We saw it with Chris Coons in New Castle County as we are finding out, his accounting gimmicks masked the fact that our County is bankrupt and in danger of becoming insolvent and we've seen it now at the state level.  The only way we're ever going to fix our problems is to make big changes in the way we do things.  Delaware is in trouble.  We've got to cut spending, cut regulations to bring jobs back to the state immediately and reduce the size and scope of government at all levels.  If we don't make some real changes, face some pain today and get our house in order, we're going to face FAR worse pain in the future. 

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