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Female voice: Testing one-two-three. Three-two-one. I hope we work. I always worry about this system. It tunes several times. [Laughs] Barbara Beel: Whatever. Five-four-three-two-one.

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Good morning, everybody. I'm Barbara Beel, and this is the WKEN Open Mike program. Today, our guest is

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State Representative, Ed Bennett. Welcome to the program, Mr. Bennett. State Representative Ed Bennett: Good morning, Barbara. Thank you.

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BB: Let's talk about the Joint Finance hearings. EB: Right. BB: The Legislature has broken for six weeks. In which time the

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Budget Writing Committee will be meeting and listening to budget requests from all of the State's agencies. You are the ranking minority member

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on the Joint Finance Committee. [EB laughs] BB: First of all, let's start with the basics. What is the Joint Finance Committee? EB: That's our budget committee in Delaware,

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Barbara, we're the one charged with responsibility of drafting the State budget. It's a rather laborious process. We go through six to seven weeks of

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extensive hearings with the agencies. And, in effect what we do, the Governor presents his budget in January, and we discuss

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his proposals with the agencies. We give the agencies an opportunity to come before us and make a plea for additional funding.

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Or we listen to their suggestions in a way of new programs. And then finally in, normally in April, we bill draft, so to speak.

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So there's a full week of bill drafts on the budget during the month of April. The committee is now in hearing. We recessed the General Assembly

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in the end of January. We'll spend the whole month of February and part of March on the hearing process.

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And then when we have the March DEFAC revenue figures, we will use those figures to come up with a final bottom line of the fiscal year

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1987 State budget. BB: DEFAC being the Delaware Economic and Financial Advisory Council? EB; Yes, correct. That's a group

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that sets our revenue estimates in Delaware. They're a blue ribbon group of people. A lot of chief economists with some of our major corporations are members of DEFAC.

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It's a very good group, a good working group, and they've been very close with their revenue estimates.

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And I think it's something that all the States should have. They should have a body that reviews their revenues and even their expenditures.

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I happen to serve on the Expenditure Subcommittee for DEFAC and we meet from time to time

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and look at how our expenditures are running. Another group, the Revenue Subcommittee, will meet and track the revenue picture in Delaware.

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We have developed a fiscal model of our revenue tracking with the University of Delaware. And we can track, through

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computer-generated information, revenue from various sources so that we don't find ourselves in a situation of some-- Many years ago and in the 1970s we had

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a period of not very much knowledge, because we didn't have this body meeting monthly or even quarterly and studying our picture.

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And there were a lot of surprises out there, not only from the people in the State government, but for the taxpayer.

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BB: To the best of my knowledge, you've been serving on the Joint Finance Committee since you were first elected to the House. EB: [Laughs] Right.

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BB: How does one become a member? EB: Not too many people want to be a member. I'll be honest with you, Barbara. I was elected 1976 and I've been

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a member of that, of the Budget or Joint Finance Committee since those days. This will be my tenth year,

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and as you probably recall, I've served as Chairman and Vice-chairman of the group over the years. Normally, a rookie legislator,

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such as I was in 1976, did not have an opportunity or a chance to serve on a budget. I had an interest in budgeting because I'm,

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as you know, a small businessman here in Dover. So the opportunity was presented to me. No one else wanted to be there,

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and I agreed to be there, sort of by default. It takes a tremendous amount of time away from your business and your family.

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And that's why a lot of legislators are not interested. It is not especially rewarding. But if you want to understand and

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know State government, and how state government works, and the ins and outs of the process and have a good knowledge of the

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agencies in State government, that's where you should be. And I've had a lot of members comment to me, "Well, I'd never serve on that.

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It just takes too much time and I don't want to put that much effort into my job." But, it takes an awful lot of time in meetings.

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And yesterday morning we started at 10:30, or about that time, and we finished up around 6:30. We just raced straight through with about a twenty-minute break for lunch.

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And we heard some interesting agencies yesterday. We had the Attorney General and the Public Defender,

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post-secondary education, the loan program, the State Treasurer was before us. The State Auditor. So we had mostly the elected, other elected offices

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in yesterday and we did hear-- They presented some interesting information to the committee.

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BB: Before we go into that in any more detail, I'd like to ask you to describe for us the setup of the Joint Finance Committee. How many members are there? And what is

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the rule concerning how many Democrats and how many Republicans are on it? EB: [Laughs] Well, that changes. There has been changing of that about every two years,

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Barbara. The majority on the Joint Finance Committee obviously depends upon who is in charge or who is

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a majority in either the House or the Senate. The Joint Finance Committee this year is composed of a six-six split,

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that is six members of the Republican Party and six members of the Democrat Party. The House of Representatives in

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Delaware in 1984 went Republican. And they have four members from the House and two minority members. So we have six from the House and six from the Senate.

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The Senate, of course, being Democrat, has the four Democrats representing the Senate and the two Republican minority members. So, it's a committee that over the years has,

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I think, done a commendable job in Delaware. The people that serve on it, I think, are probably some of

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the most intelligent people in the General Assembly. They know State government. They know the agencies.

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They have a concern about expenditures. And they have been a very conservative group of people. We've kept State spending down in

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Delaware, largely because of the the committee members and the success the Joint Finance Committee has had in controlling expenditures.

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I think that's important because it appears that we may be looking at another tax cut coming before us.

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The Governor spoke on that. So that would be the third tax cut in the last, I guess, four to five years.

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And that's spectacular as far as I'm concerned. I think it's a reflection of the members of

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the committee and they're holding down spending. BB: Does each member have an equal say? EB: Pretty much.

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We have a lot of give-and-take. You have been to some of the hearings, as I recall, over the years. Everything is open and public,

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even the bill draft. We make individual motions on each agency and each program in the budget.

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We vote on those separately in public. The whole process has changed so much since I was elected. And I'm very pleased to say I think

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I had something to do with opening up the process. When I was first elected, you drafted the budget in a private room and

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far from public scrutiny, and things just were not open, and I did not approve of it. I didn't think that was a good way

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to run any business, let alone State government. So those things have changed and opened up. And I think it's to the credit

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of the people that have served as Chairman over the years and have been on the committee. But we go around the room,

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anyone that has a question on an agency, just raises their hand and they're recognized by the Chair, and we sort of play it loose

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and ask the questions we think that are pertinent to an agency. And we do have a small, modest staff that does some work

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for us as committee members. They work for the Comptroller General's office. And that office itself

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has just grown tremendously in respect and in knowledge, and in the professional people that we have aboard to give

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us a hand has just been really good change for the State. BB: As a taxpayer, let me say thank you. [EB laughs]

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BB: For serving on the committee. No, I'm sincere. It does take an awful lot of time, and I'm not sure that you all are appreciated for it.

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So thank you, Mr. Bennett. Getting back to some of the agencies which presented their budget requests yesterday,

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as I recall, most of them asked for more than what the Governor wants to give them. How do you decide?

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EB: Most of them do, Barbara. Everyone that comes before us has a plea. Now, yesterday the plea was from the Attorney General

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and the Public Defender for substantial increases in salaries over and above what the Governor had proposed.

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Frankly, that was a little irritating to me. The Public Defender's office, we have information developed by our analysts that

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indicate that those people are quite well-paid. Their average salary is in excess of thirty-three-thousand a year.

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They have the ability to go out and have a, in private, I'm talking about the attorneys now that work there, to have a private, civil practice

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where they could earn additional money as well as serve as a Public Defender. I thought it was inappropriate, and I guess I objected little bit,

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but I think what you'll find, it's a difficult question when you talk about salary raises or changes in salary for any sector

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in public government. It's always the first and the most open discussion we have when we bill draft.

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We try to be fair to all employees in a way of a percentage increase. In other words, we try not to do for one class of

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employee in exact opposite of another. And I think that's been consistent. And I think you'll find that consistent in the fiscal year 1987 budget.

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Incidentally, it will be a balanced budget again, and I think that's important. We keep looking at the people in Washington,

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and I scratch my head in amazement and say, "What in the world is happening over there?" You can't plan in these times. As a businessman, I can't plan or

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have long-range planning in my business, it just changes from month to month and sometimes day to day. And I just think

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it's incredible that those things are allowed to go on as they have and keep having mounting deficits and not facing the problem of cutting back and

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being more realistic in Washington. BB: It is amazing, isn't it? EB: It sure is. BB: In my opinion, if a State

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such as Delaware can do it, then the federal government should be able to balance its budget. At least place restraints on itself.

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EB: Well, we like to think we're doing some things right in Delaware and maybe if some of the fellows in Washington and

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gals in Washington would come over and take a look at us, maybe they would open their eyes a little and live within their means.

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BB: It would be nice. [EB laughs] BB: Maybe we should invite them all over here. EB: Great idea. BB: You can take the initiative.

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Let's talk about the money that the State has to play with, EB: Hmm. BB: For lack of a better word, this year. EB: Our surplus, yes.

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BB: Yes. How much money do we have at this point? EB: At this point we're between twenty-eight-and-a- half million and thirty-two million dollars.

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It appears. And that's based upon the Governor's budget. We do expect some more growth in a range between ten to fifteen million dollars

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between now and June 30th. That again, is good news. Our economy in Delaware is strong. We have a very,

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very low unemployment rate, that helps our revenue picture. We've been able to cut taxes, as I mentioned previously,

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and I don't really want to see us get in the position where we spend all the money available. We've never, to my knowledge,

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gone through the throes of that, except maybe in the early 1970s. We have to live within our means, and there's certainly nothing wrong

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with continuing over to fiscal year 1988 with a surplus. And I think you'll find that happening again this year.

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BB: Any idea how much? EB: I would judge it, depending upon a budget growth in a range of probably thirty-five million dollars.

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It looks like will carry over into fiscal year 1988. That is without, barring any unforeseen emergencies that

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we may have to plan for. But that's a substantial surplus to carry over. We never know when we may have a downturn.

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That's why we did establish the Rainy Day Fund. That is filled up. It's almost fifty-million dollars now, which we do not plan to touch,

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and have not touched since we established it. It's calculated by formula, and we are mandated to fill that up to the formula.

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So when you look at the thirty-five-million in the, in the General Fund surplus side and recognize that there's still fifty-million dollars residing

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in the Rainy Day Fund. I think that's one of the reasons that we've done so well in the bond market.

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That's why our bond rating is very high and we're in good shape there. It's cheap for Delaware to go to the bond market now.

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They see that what we've done with our house, if you would, we have our house in order and it's reflected in our bond rating.

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BB: I'm glad you mentioned the Rainy Day Fund. I was going to ask you about that. Tell us, for those members of our audience who may not be familiar with it,

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how that came about, and what it can be used for? EB: Well, that's. What it's going to be used for is it probably will

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have to be answered by the Judiciary. The way the language reads in the legislation that we passed is that you may only use that for

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an emergency. A financial downturn or an emergency revenue shortfall. No one really has ever defined what an emergency means.

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When we drafted the legislation, we were groping for language to sort of put something in the law that said,

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"Well, something could happen, so what if something happens?" So we came up with the word "emergency" and until that's

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defined, we really don't know. There was some years ago when we were twenty-eight million dollars in deficit because of some real quick

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shortfalls in revenue, we looked at that fund and wondered whether we were in an emergency. Well, we had the revenue shortfall,

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but we didn't really have an emergency because we could go back and, which we did, go back and cut our budget.

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Midway through the fiscal year, we reverted a lot of money. We passed some legislation that speeded up some revenue. We did

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a lot of innovative sort of things. That kept us from having to go into the Rainy Day Fund. The reason for

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its creation. Historically, Delaware, because of its very progressive type income tax or personal income tax,

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reacts very strongly when there's a recession. And we'd had a series in the early 1970s and late 1960s of times where we had

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one year of surplus and then three years of deficits in a row. And then first thing you know, the taxpayer would have to pay, and we'd

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have to raise revenues. And only way you do that is through raising taxes. And the taxpayer would go

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to sleep at night and wake up the morning, find out "My taxes are going up!" So it was almost what was happening, or what has

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been happening, in Washington. So we decided to change that, and to put our financial house in order. And by doing that,

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we decided to reserve some funds for the "what if" or emergency times. And we are one of the, I guess

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we were the first or second State in the nation to do that. And I think it's a reflection on where we are today.

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BB: Delaware, by law, cannot spend more than 98% of projected revenues. EB: Exactly. BB: Would you explain that? EB: There's a calculation based upon

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the revenue figures from DEFAC that the Budget Committee and the Governor and Executive use to take a glimpse

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in time of where we stand in our revenue forecasting. We are mandated by Constitution to not spend

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all the money in the pot, so to speak. We must reserve, set aside 2%, as a set-aside fund. And that keeps us from

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going into those years of when we had this deficit, deficit, deficit and a modest surplus, and raise

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taxes and all those bad things were happening in those days. I think it's very healthy, and it's a good way to run any

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State or national government. But there are only a few of us in the country that have that. And some of the States

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had been coming to Delaware, and perhaps modeling and wondering our program, taking a look at it for

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their own State and we, in some sense, have caught the attention of the nation because of the position we're in,

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in the way of our surpluses. BB: Delaware has one of the highest personal income taxes in the nation.

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Fortunately... you're shaking your head. Not anymore? EB: Not anymore. BB: In the past couple of years with the tax cuts,

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it has gone down considerably. This year, the Governor has proposed a 4% personal tax cut and cuts in the gross receipts tax,

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and public utility tax. As it looks right now, will we get those cuts? EB: I think there's plenty of

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resources available to be able to do that. When you're looking at a thirty-five-million dollar year-end. The Governor's proposed tax cuts are not

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terribly expensive. They're in a range of ten-point-five to eleven million dollars. That is the total picture. I think we can afford that,

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and it would be nice to to cut taxes, and I certainly do support that effort, but we must, as you know,

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come up with a bottom-line budget and then we, after that's all presented and before us, then we can sit down and see

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what resources we do have left. BB: Delaware's also mandated you have a budget prepared by a certain time. How did that come about?

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EB: Mainly because we were not addressing the budget issue in the late 1960s and early 1970s until June 30th. Since that time, as we were speaking earlier,

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the whole process has changed so much that the public has a long, a chance to view the State budget, see what programs are funded.

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We usually draft the budget and have it sit for a month, and let everyone see what's in it, and have an open discussion,

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and listen to additional State agencies that feel that they are still short-changed or would like to

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talk about other programs that they would like to put in. So, I think it's important that once you introduce a State

00:20:23.690 - 00:20:31.820

budget and it rests, and everyone can have a good view of what's there. I think that's healthy. And although we may not

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actually pass a budget until, say June or the latter part of June, that does give us a little more breathing time.

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We have additional DEFAC numbers from the May meeting. Things can change quickly. We hope they don't.

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But nevertheless, there's still some criticism from the public because we don't pass the budget until June, but there are some pluses

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to not passing it before June. Namely, another, a little more advice from the DEFAC people and

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little better glimpse of what our revenues may be. BB: Can anybody go in and address the Joint Finance Committee?

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EB: Sure. Any time, on any subject. We try to keep... we have a schedule, as you know,

00:21:16.520 - 00:21:25.100

and we try to keep the questions confined to the agencies that are before us. But there's always the Chairman or Chairperson of

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the committee always asks at the end of the hearing whether there's any one from the public that would like

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to address the committee, if there are any questions from the public, as well as from other legislators that might be

00:21:38.990 - 00:21:47.330

present that are not committee members. So everyone has an opportunity to get into the discussion of the budget. And then of course,

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there's always the press who always have a lot of questions. And they have an opportunity to talk to individual members or

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after the meetings, and ask specifics. BB: The Governor has proposed rather hefty raises for some elected and appointed officials.

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Some in particular, let's say the Attorney General, the State Treasurer, the Auditor of Accounts, and I believe the Insurance Commissioner,

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under his budget proposal would go from, I think, it's thirty-four-thousand dollars to forty-seven-thousand dollars a year.

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Is this a bit much or do you think it's proper? EB: Yes, I think it is a bit much. We have, as I said,

00:22:31.660 - 00:22:39.500

we try to be fair in all the raises that are granted in the State budget. The committee, the commission

00:22:39.500 - 00:22:48.800

that was established to review salaries, reviewed salaries, and we moved the people to the limit that we had set in our law.

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You could not, in our law, increase anyone's salary up above 20%. Senator Gordy passed that legislation, and that's a hard

00:22:58.340 - 00:23:05.150

and fast regardless of what a Commission recommends. Now, I don't know of anyone that deserves more than a 20% raise,

00:23:05.150 - 00:23:15.950

no matter what their position might be. I think we have to hold the line on that regardless of what perhaps the commission presented to us.

00:23:15.950 - 00:23:27.290

I think a 20% increase is outrageous, to be honest with you. Particularly in the areas of where we have elected people, Delaware has

00:23:27.290 - 00:23:34.700

a long history of people that are willing to serve our State at a very modest cost. They're willing to donate their time almost.

00:23:34.700 - 00:23:43.350

Not asking that these particular people donate their time by any stretch, but I think that they're adequately compensated.

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BB: And then there's always the position one could take that there are no set hours for elected officials.

00:23:52.930 - 00:23:59.090

And if they don't want to, they really don't have to go into the office at all. EB: Exactly. And we have

00:23:59.090 - 00:24:09.490

some don't, to be perfectly honest with you. I don't really happen to be one of those, but I do spend a lot of time, and too much time, I guess,

00:24:09.490 - 00:24:19.430

according to my wife and family. But there are absolutely no constraints on how many hours one may work. We have some very, very dedicated

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elected people that spend many, many hours over and above a normal work-week, both evenings and weekends. Thank goodness, the one

00:24:31.700 - 00:24:39.260

who does not put in the time, in Delaware I think, is the exception. The ones that I have a relationship with and work with very closely

00:24:39.260 - 00:24:46.750

are, I find to be, just great, dedicated people and we're fortunate to have them. BB: While I've got you on the show,

00:24:46.750 - 00:24:59.540

let me ask you this: what are some of your priorities for this legislative session? EB: I'll be, I'm concerned about the situation of public education,

00:24:59.540 - 00:25:07.400

about the attracting teachers and recruiting school teachers. We need in our classrooms the very best people we can

00:25:07.400 - 00:25:18.260

recruit and attract to teach our young people. We're not getting that. The profession is so competitive now, we're finding when we go out to talk

00:25:18.260 - 00:25:26.120

to youngsters coming out of college, that the competition for them from other States, not only surrounding States,

00:25:26.120 - 00:25:35.090

but Florida, California, Texas, Colorado. All these people are showing up now at these, at our colleges and universities and they offer a lot more

00:25:35.090 - 00:25:43.940

than we've been able to offer them. I just finished a meeting, long meeting yesterday afternoon that involved a program

00:25:43.940 - 00:25:53.080

that we're trying to work on to recruit, retain, and look at people to re-enter the profession. And we're looking at

00:25:53.080 - 00:25:58.790

working with the Delaware Development office and developing a marketing plan where we can go out, and actively

00:25:58.790 - 00:26:05.600

recruit across the country, and bring the very best people that we find to teach our youngsters. I think that's a very

00:26:05.600 - 00:26:12.440

important issue at this time. Of course, the other issue is we've been reading and hearing about is the salary issue.

00:26:12.440 - 00:26:20.900

We have through our equalization legislation that has been passed, and something I've been working on since I was elected

00:26:20.900 - 00:26:29.600

in 1976 in fact, finally happened. But we have an opportunity now to address some of the teacher needs through some State

00:26:29.600 - 00:26:39.050

support in a way of their salaries and through local monies. And it's made a remarkable difference and the morale in our school system is

00:26:39.050 - 00:26:46.010

just really been improved from the professionals. I think it's something that was long needed, and regretfully,

00:26:46.010 - 00:26:51.950

when I first started working on it, I was a voice in a distance and no one was listening, but we did get it done.

00:26:51.950 - 00:26:57.970

And I think that was a really hallmark piece of legislation in our State. The other problem, I

00:26:57.970 - 00:27:05.410

think as a businessperson, is the problem of the liability insurance. Representative Petrilli and myself

00:27:05.410 - 00:27:14.830

have introduced five or six bills that will be held in public hearings on during the month of March. I hope the businesspeople that

00:27:14.830 - 00:27:20.320

are having severe problems with liability insurance in their business will plan to attend and speak out

00:27:20.320 - 00:27:29.800

pro or con on the legislation, but that really is a serious need and I don't know whether we can handle it legislatively,

00:27:29.800 - 00:27:37.240

or whether there is a legislative problem, in this area. But, we are at least going to have some hearings, and listen to some people, and find out

00:27:37.240 - 00:27:44.220

if we can't correct some of the outrageous premiums that are being charged to operate businesses in our State.

00:27:44.860 - 00:27:53.780

BB: The City of Wilmington could not afford liability insurance. It dropped its coverage. EB: Right. BB: And came up with program to

00:27:53.780 - 00:28:04.610

insure itself. Can that be done? EB: Sure. The State of Delaware is self-insured. We have a self-insurance fund. We set aside moneys in that in the budget,

00:28:04.610 - 00:28:13.610

and we handle that self-insurance ourself. We found it was much too expensive to go out and try to ensure a State and all of its assets.

00:28:13.610 - 00:28:20.840

That can be done. It's really reached the point because of the premium, and the tremendous cost

00:28:20.840 - 00:28:31.700

that a lot of people are considering that. I hope that legislatively it for is a remedy that we may be able to address that in April or May so

00:28:31.700 - 00:28:38.830

that you will not see municipalities not being able to get coverage, and perhaps we can help them and protect them.

00:28:38.830 - 00:28:46.840

BB: We are out of time, unfortunately. This show does not run long. Mr. Bennett, thank you very much for being here.

00:28:46.840 - 00:28:52.760

EB: Well, you're very welcome. And I enjoyed it, and I'd love to come back any time. BB: Good luck with your hearings. EB: [Laughs] Thank you.

00:28:52.760 - 00:28:58.880

BB: We've been talking today with Representative Ed Bennett, the ranking minority member of the Joint Finance Committee.

00:28:58.880 - 00:29:04.140

I'm Barbara Beel and this has been the WKEN Open Mike program.