Page 24 - Delaware Lawyer - Summer 2022

Letter to the Editor
The following letter and author response are in reference to “Balancing Delaware’s Budget Today” by Danielle Gibbs, published on page 14 of Delaware Lawyer Vol. 39, Issue 4.
To the Editor:
This is a push-back to the article en- titled “Balancing Delaware’s Budget To- day” appearing in the Fall 2021 edition. The article, in part, surveys the constitu- tional constraints on the State’s budget- ing process found in Article VIII, section 6 of our State’s Constitution.
I write because of representations made in the article about two legal “man- dates” that surround the constitutional “Budget Reserve Account” or “Rainy Day Fund” created by subsection 6(d) of Article VIII.
At page 15, the article announces: “Subsection (d) requires the state main- tain 5% of gross General Fund revenues in the Reserve Account.” This is followed by a footnote 4 that reads, “4. Funds appro- priated from the Reserve Account must be restored the following year.”
Later, the article makes two further ref- erences to the footnote 4 “must restore” requirement (Delaware Lawyer at 17).
The problem is that it is hard to find
The author responds:
I cannot point to text expressly re- quiring funds drawn from the Reserve Account to be replenished annually. As I read Article VIII, lawmakers created rules whereby the account will, in fact, be re- plenished in all but the rarest of circum- stances. In my view, this is a requirement, albeit by implication. Yet, the critique of the sentence on page 15 and footnote 4 is fair. The two sentences do not state that they reflect opinion or interpretation, namely, reading Subsection (d) in light of the 98% rule discussed in the preceding paragraph.
The effect of the 98% rule is generally
any constitutional text or statutory or rule enactment that supports either of the above two legal “requirements” that the article describes. I cannot find in the constitutional text surrounding the Bud- get Reserve Account any phraseology that imposes (or even implies) either the “must maintain at 5%” or “must restore the next year” legal mandates alluded to in the article. Nor can I find any statute or administrative rule that adopts either of the two “mandates” the article advances.
The text in Subsection 6(d) says “that no such payment [of excess unencum- bered funds] will be made which would increase the total of the Budget Reserve Account to more than 5% of only the estimated State General Fund revenues as set by subsection (b) of this section.” That text imposes a 5% “cap” not a 5% “floor.” Similarly, there is not a word in Subsection 6(d) that refers to footnote 4’s recital about a next-year payback obligation. And, again, no one has steered me to a statute or rule which imposes that requirement.
that 2% of estimated revenue from all sources for the prior year are unencum- bered at the open; under Subsection (d), excess unencumbered funds must be de- posited into the Reserve Account, and the 5% cap is measured against only gross reve- nues estimated for the budget year (found in the most recent revenue resolution).
In an extraordinary case, the result could differ. For example, the General Assembly could suspend the 98% ap- propriation limit, but this requires a su- permajority vote and has happened only twice in 40+ years. Mr. Myers may have in mind several years during the financial cri- sis when gross revenues declined and the
Unfortunately, there is some history behind these two statements about the legal mandates surrounding the Budget Reserve Account. Back in 2009, then- Governor Markell — in responding to calls to use the Rainy Day Fund monies — made repeated public statements that such was a non-starter because the “law” required any such dip into the Reserve Account to be restored the next year.
But, eventually, both the Governor’s legal counsel and lawyers for the General Assembly walked back the Governor’s earlier statements about any such legal obligation: they admitted there was no such “legal” mandate. See Harry Themal, “Think It’s Raining Now? Just Wait,” The News Journal, June 22, 2009 at 10.
Here, my plea is simple: someone please point me to the constitutional text or statutory or regulatory citation which indeed supports the article’s two state- ments.
— Gary Myers Rehoboth Beach
balance of the Reserve Account exceeded 5% of the budget year’s gross revenue es- timate. Had the state spent only the funds in excess of the 5% cap, I do not believe the constitution would have required that they be restored the following year.
I appreciate Mr. Myers’ “push-back” in the interest of your readers, and I thank the Editorial Board for soliciting a 300- word response. I remain grateful for hav- ing been invited to provide an overview of Delaware's constitutional budget pro- visions and for the opportunity to con- tribute to a great issue of the Delaware Lawyer.
— Danielle Gibbs
22 DELAWARE LAWYER SUMMER 2022