Stimulus Package Will Create Jobs, Fund Critical Infrastructure Improvements

Despite infusion, historic budget shortfall remains; tough choices still on horizon

WILMINGTON – Gov. Jack Markell and U.S. Sens. Tom Carper and Ted Kaufman gathered at the Department of Labor on Wednesday to discuss the federal Recovery and Reinvestment Act’s benefits for Delaware, which include the creation of thousands of jobs and the investment of hundreds of millions of dollars in key improvement projects.

Markell estimated that $802 million in stimulus funding will flow into Delaware, not counting the tens of millions that go will directly to Delawareans through tax cuts, increased unemployment benefits, expanded student grants for higher education and other initiatives.

The funding, along with significant reductions Markell has made since taking office, puts the state in good shape in terms of the budget shortfall for fiscal 2009, but that could change if next month’s estimates from the Delaware Economic and Financial Advisory Council drop.

Markell also pointed out that his administration will continue to look for cost-reductions this year because the savings can offset the historic shortfall Delaware still faces in fiscal 2010. Stimulus funding for Medicaid and fiscal-stabilization for fiscal 2010 reduces that shortfall by $100 million to $175 million, which still leaves Delaware with a historic shortfall that must be addressed.

The stimulus does not reduce the shortfall further because much of the stimulus funding is dedicated to specific areas and cannot be used to shore up our general fund deficit. Most of money from the stimulus package comes with specific federal mandates for one-time spending. 

“Our state is facing historic unemployment rates and historic revenue shortfalls, and the only way we are going to solve these challenges in the long term is to get Delawareans back to work. The stimulus bill provides help that may create thousands of jobs,” Markell said. “While the money will be put to good use to help us fund one-time projects that will create jobs, it will only address a fraction of the huge shortfall we face in the fiscal 2010 operating budget. We cannot pretend that the painful decisions on our horizon have vanished. We need to continue the honest discussion about the state’s fiscal reality. Difficult decisions remain and will demand shared sacrifice across the state.”

During his remarks, Sen. Carper said that the economic recovery package addresses the root cause of the current economic downturn — the housing crisis – and gives Americans facing the prospect of losing their homes more options to refinance and avoid foreclosure.

“This bill is expected to create an estimated 3.5 million jobs by putting Americans to work to begin rebuilding our nation’s crumbling infrastructure, mass transit and water and sewer systems, and rebuilding roads, bridges, ports, railways, waterways. Delaware stands to create or retain thousands jobs from this legislation.”

Added Sen. Kaufman, “with job loss spinning out of control, we needed to act – and I’m relieved that we did. Make no mistake, this is neither a silver bullet nor the final step. We have difficult choices, and a difficult road, ahead. But this plan, and stopping the hemorrhaging of our jobs, is an enormous first step.”