Speaking at the Central Delaware Chamber of Commerce's 2018 Economic Forecast Breakfast, State Treasurer Ken Simpler said businesses, and people, need certainty that comes with better budgeting.
The process the state uses to determine its budget is broken, according to Delaware’s State Treasurer, and fixing it should be a priority of state lawmakers.
“Budgeting one year at a time is basically spending what we take in,” State Treasurer Ken Simpler told attendees at the Central Delaware Chamber of Commerce 2018 Economic Forecast Breakfast Thursday morning. “It makes it tough to plan and make good decisions.”
Planning is essential to stability, he said.
“Government dysfunction has an effect on local economies,” he said. “State governments should generate certainty.”
He noted that there will be years when the state sees good revenue growth, and there will be years when revenues are less. Under the current process, lawmakers look to balancing the budget as their threshold to success.
“That makes it tough to plan and make grand decisions,” he said.
Instead of going year-to-year looking to spend what the state takes in, a process that relies more on a formula of revenue stability, spending discipline and value creation would put the state on a better footing in the long term.
Brian Nick, Chief Investment Strategist with Nuveen, told those gathered for the meeting at Maple Dale Country Club in Dover that the global economy is basically booming and that the U.S. economy “looks like it is growing strongly and unlikely to slow down any time soon.”
“Everything is firing on all cylinders,” he said, “and this is happening around the world too.”
Still, he said, what’s happening in Washington, the inability of lawmakers to pass a budget and other concerns do have an impact.
“Continued dysfunction does tend to take its toll,” he said.
Simpler said that in election years there is a tendency for people in elected office to be more cautious, not wanting to do anything to upset voters. But, he suggested, perhaps people are just as fed up with the yearly budget battles and questions over what will and what won’t be funded.
“Delaware needs a grand bargain around revenue and spending,” he said. “Sometimes the path to success is to it in one fell swoop. If you think the system is broken, let’s fix the system.”