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Archive for July 6th, 2009

Earlier today, the Governor released the following press release. He’s going to shutter the Department of Finance; however, he will not be reducing any people, other than losing retired Dupont CFO, Gary Pfeiffer. So, Dupont’s former CFO leaves and Senator Nancy Cook’s (powerful longtime chair of the budget writing Committee. She was first elected in 1974) son will be Mr. Pfeiffer’s replacement. I can see why the Governor didn’t want to announce this while the General Assembly was still in session. Ouch!

Also, a third of the press release is related to Republican Minority Leader Dick Cathcart’s demand that the Governor guarantee a reduction of 500 State employees through attrition. If it weren’t for Cathcart, the press release would have been much smaller. Kudos to the Minority Leader.

Markell Recommends Eliminating Department of Finance and Consolidating Functions Into Other Agencies

Cook Named Acting Secretary as Pfeiffer Retires

DOVER – Following through on his commitment to make Delaware’s government smaller and more efficient, Governor Jack Markell today announced a proposal to eliminate the state’s Department of Finance and consolidate its functions into other state agencies.  With this announcement, the planning process to transfer the department’s responsibilities to existing state agencies has begun.

“Government needs to be smaller and my administration is committed to making that happen in a thoughtful way,” Markell said.

“Last week, that meant eliminating hundreds of positions from the state budget. Today, it means proposing to consolidate the functions of an entire department, which will capture significant savings and efficiencies,” said Markell, who signed a budget last week that de-authorized 485 positions in state government and that spends significantly less than the year before.

“Just like businesses and individual households, state government must cut costs during these difficult economic times.  I believe this initiative will do that, while still maintaining and performing the important functions performed previously by the Department of Finance,” Markell said.  The Department currently houses the Division of Accounting, the Division of Revenue and the State Lottery office, which also oversees the state’s Racinos.

While this initiative will not require layoffs, the Governor is committed to significantly reducing the number of state employees by aggressively and carefully managing attrition.  Over time, as service delivery is made more efficient, as employees are transferred to other responsibilities and as the state carefully manages attrition, there will be fewer employees providing the combined array of services across departments.

His first day in office, Markell launched his ongoing “Honest Assessment” of state government to drive down costs and make government more efficient, effective, responsive and responsible. As part of that effort, Secretary of Finance Gary Pfeiffer, who was the Chief Financial Officer at DuPont, determined that the state could be run as effectively and, over time, less expensively, without the Department of Finance existing as a stand-alone department.  As a result, Secretary Pfeiffer recommended the elimination of Department of Finance, with its functions consolidated into other state agencies.

Pfeiffer has resigned as Secretary of Finance and Markell has named Deputy Secretary Tom Cook to the role of Acting Secretary to lead the Department’s transition until the legislature can formally pass legislation to accomplish the transfer of these functions.

“Gary’s experience was an important factor in getting us through the historic challenge of an $800 million shortfall. We appreciate his service and his guidance. His fresh set of eyes and experience helped make clear that citizens can still be served without the Department of Finance existing independently from other agencies,” Markell said. “Acting-Secretary Cook brings decades of experience within state government that will be important to maintaining service levels and the orderly transfer of responsibilities into other agencies.”

Prior to his job as Deputy Secretary of Finance, Cook worked for the Office of Information Systems and the Department of State and served as Delaware’s Commissioner of Elections.

“Tom Cook works as hard as anyone I have ever seen in either the public or private sectors. He has the drive and the knowledge to make the Governor’s recommendation a reality and help lead this significant step to shrink the size of government,” Pfeiffer said.

Cook added: “The Governor has made his vision for a smaller, more effective and efficient government clear. We will get to work implementing it immediately while maintaining our levels of service to the citizens. I am honored by the opportunity to help make that change a reality.”

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The following is allegedly a letter sent from Governor Markell to State employees the day after the budget was signed. Other than noting that an elected Governor is not the same as a regular State employee, I refrain from any comments and allow you to draw your own conclusions.

Dear Fellow State Employee:

Early yesterday morning, the General Assembly passed and I signed a budget that successfully solves the largest budget crisis our state government has ever faced. The national recession, rising costs, growing unemployment and a corresponding increase in demand for state services created an $800 million dollar shortfall. This budget cuts millions of dollars more than it raises in new revenues but keeps our core commitments, such as educating our children and protecting our streets and citizens – jobs that our state employees do and do very well.

Shortly after I came into office, I made 60+ presentations across the state about the magnitude of the budget shortfall and the tough choices that would be required to get our State’s fiscal house in order. At those presentations, many state employees urged me to avoid layoffs and, despite significant pressure to do so, we kept that commitment in this budget. It does not require that any state worker be laid off.

Once our budget proposal was made in March, state employees urged me to make every effort to reduce the 8% temporary pay cut that was originally proposed.

The budget that passed includes a 2.5% reduction in state employee pay instead of the original 8%. The 2.5% reduction took effect July 1 and will be spread evenly across employees’ paychecks throughout the year. Unions, agencies and administrators will also have the opportunity to agree to a plan that would provide 5 days of additional employee leave. These plans for leave may be put into action on an agency by agency basis after approval from the Director of the Office of Management and Budget as well as the Controller General. That approval will be contingent upon specific criteria such as no increases in overtime expenses or the creation of a staffing shortage.

For those of you planning to retire, this budget also protects your pension by ensuring the base salary amount you made last year will be used to calculate your retirement, instead of this year’s pay.

These changes do not come without consequence. Instead of cutting pay by a larger amount, we will save money by reducing the size of state government. We have already eliminated 500 unfilled positions. Over the next year, as employees retire or leave for other reasons, the most critical positions will be filled, but others will not. Responsibilities will be merged or reassigned, and positions will be shifted as programs are reprioritized or ended. In doing so, we will eliminate several hundred more state jobs through attrition. Government needs to be smaller, and it will be.

We have cut costs in other ways with this budget. We cut the size of the state’s vehicle fleet. We grounded some state police aircraft and severely limited out-of-state travel. We went to our vendors and demanded better deals for the services and products they provide. We made real cuts in many programs. We closed or reduced hours at some facilities. The result was a budget that is significantly smaller than the one before it.

In the coming year and beyond, we must continue our efforts to find ways to cut costs within our own state government and across every level of government. We must also look at ways to reduce significantly the administrative costs in our schools. We will do all of this at the same time we keep our core commitment to serve the citizens of Delaware and I hope that we can do all of this together.

In closing, I recognize that this has been a difficult and challenging year for all Delawareans, including state employees, and I very much appreciate the active and open discussion these issues have generated. Now, with a responsible budget that allows us to move forward, I know we can work together to meet the very significant challenges facing our State.

Best wishes,

Jack Markell

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I’ll be brief.

Today’s article which laments the sad situation of an unemployed woman who can’t pay her bill to the city of Wilmington and is now facing a sheriff’s sale misses the point – which is if she were employed she’d be able to pay her bill.

If more energy, creativity, and damnit this is going to happen attitude were to come about we’d find ways to create jobs in Delaware.

We have one of the best educated workforces in America here in Delaware. We’re small which means ideas and meetings can happen within 60 to 90 minutes of transpiring. We have 3 universities and 2 colleges which are also loaded with smart people.

Contrary to popular myth there are still companies, especially those who wish to grow from an idea into an actual business, out there waiting to take off and or set up shop in a business friendly state. Not one that raises the gross receipts tax. Again.

Georgia has erased it’s PIT and prides itself on being the most business friendly state in America.

This woman being foreclosed upon has lost her job through no fault of her own.

We’re the state that started a nation and we can’t create an environment that brings jobs here?

What has happened to us as a state?  Are we soon to become the mid Atlantic New York or Taxachussests?

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