Today’s big story can quickly become tomorrow’s afterthought. That’s what makes playing prognosticator difficult. But we’ll give it a try anyway. After asking a handful of political observers to reflect on the year gone by and offer their analysis, DFM News asked that same panel to tell us what they’ll be keeping an eye on in the new year. Today, they weigh in with their thoughts, submitted via email, on the stories to watch in 2012.
What is the Delaware story to watch in 2012?
If the national and world economy collapse in 2012 as some are predicting, Delaware’s government may find itself in a financial hole that will be difficult to dig out of.
Delaware, like the rest of the U.S., had appeared to prosper during the buildup of the real estate bubble. When the bubble popped, it led to the worldwide loss of trillions of dollars in equity and collateral. That led to the drying up of credit. It has became apparent that the economy will probably not generate pre-recession levels of return again for years to come.
Delaware government revenues tumbled at the same time that many citizens needed more government services. As of yet, the suffering appears to be building rather than abating.
Delaware government was able to temporarily reduce spending when serious deficits first appeared but has not introduced structural reforms. In 2011, spending once again predictably increased by more than population growth plus inflation. The result was that we now face another serious deficit even before the General Assembly convenes in January, 2012.
Prudence dictates that it is time for structural reform of the Delaware budget process. If a worldwide depression should occur, state revenues will likely suffer a further drastic decline. The time to prepare for disaster is before that disaster strikes. The result of inaction could be that Delaware will be totally unprepared to deal with a crisis of historic proportions.
—Rich Collins,Executive Director of the Positive Growth Alliance
The story to watch in 2012 is the same story that we’ve been watching since January 2009. The economy continues to struggle, and the chance of a new recession in 2012 is still quite high. In July, I wrote the following for DFMNews:
“I think that growing the State’s operating budget by over 6% is a huge misfire as it was only about 2 years ago that we faced a 25% budget shortfall. The economy is still very perilous, and yet our legislators continue to party like it is 1999.”
With DEFAC now forecasting a 3.5% reduction in revenues (and this only by aggressively chasing Corporate escheat dollars) and Medicaid expenses continuing to skyrocket, the Democratic leadership in the General Assembly will have some tough decisions to make. Tough decisions that they brought upon themselves by their own poor spending choices. They will work very hard not to increase taxes, but if the economy remains sluggish, they may have no choice. Again, as I wrote in July:
“Making budget cuts and raising taxes in an election year is not good politics.”
—Charlie Copeland,former state senator and 2008 GOP candidate for Lt. Governor
Two stories will resonate most in 2012; they are somewhat related.
The first is the quick reversal of fortunes for the Republican Party in the state. After suffering a near shut-out in 2010, the party will gain seats in both legislative chambers in 2012, though the Democrats will remain in control. Nonetheless, this outcome will give the Republicans a shot at retaking either the House or Senate in 2014, which will not be a Democratic year nationally or statewide.
The second story pertains to continuing efforts to open up the Delaware General Assembly through various accountability measures. Last year we witnessed the FOIA gains, while this year perk limits and term limits were both proposed but defeated. Early in 2012, we will observe a fight to weaken the method by which members of the GA receive salary increases together with continuing challenges to legislative leaders.
—Sam Hoff, Delaware State University political science professor
The lack of a serious challenge to Governor Markell, Lt. Governor Denn, and Senator Carper is a story to watch in 2012. So far, all three have garnered little to no Republican opposition. This speaks both to the deteriorated state of the Republican Party in state, and to the good performance of all three in office. Indeed, while Progressives have many disagreements with Senator Carper on both policy and strategy, he has served in such a way to scare off a Republican challenge.
Another story to watch is the Democratic primary for Insurance Commissioner. Incumbent Karen Weldin Stewart is facing a primary from former employee Mitch Crane, and the race will center around the very purpose of the Insurance Commissioner’s job: Is the Commissioner an advocate for the consumers or for the insurance industry?
We will also have debate in the General Assembly over lobbying reform as well as on the double dipping issue, i.e. whether and in what fashion our legislators should hold second state jobs. But the big story to follow this coming year will the budget, and Governor Markell’s efforts to reform Medicaid, which furnishes health care to the poor. With DEFAC projecting $33 million more revenue than expected, hopefully the poorest and most vulnerable in our state are not asked to sacrifice yet again so that the rich and corporations can enjoy their tax cuts.
—Jason Melrath,Vice President, Progressive Democrats for Delaware
As the News Journal reported recently, there is a “New Face of Poverty” in Delaware.
The U.S. Census Bureau reports that the nation’s economic downturn is affecting not just the poor but the middle class as well. Incomes have fallen for both the working poor and the average working population. In Delaware, the Wilmington Sunday Breakfast Mission, the Wilmington Mission of Caring, and the Food Bank of Delaware are all stretched to the breaking point, because of our failing economy. 21 percent of Delawareans, over one in eight, are living below the Poverty Line. Over 200,000 Delawareans, nearly one in four, are on Medicaid, and Health Insurance Program for the Poor increased by 30 percent since 2008. The number of homeless rose 21 percent between 2007 and 2009 and food stamp enrollment increased 81 percent in the last three years.
Meanwhile, Delaware’s famous beach vacation areas, Lewes, Rehoboth and Dewey, are still well kept. But a short distance away from those neighborhoods in the woods and parks, tent cities are expanding, taking in more poverty stricken regularly.
The Lewes-Rehoboth Association of Churches tried to help, opening a resource center spending $95,000 to assist 250 people with temporary housing, food, and other basic needs. Published reports quote Bennett Connelly, the leader of the Church Association as saying “they barely scratched the surface of the problem” because there is so much more that needs to be done. The Division of Unemployment Insurance reports if long term unemployment benefits are not extended, 9,500 Delawareans will lose their weekly checks, the only income for many of those living in tent cities and facing other economic hardships.
There is lots more that I could say, but the bottom line is this; unless the Republicans agree to extend both long term unemployment benefits and the payroll tax cuts for the employed, 2012 could see the poverty rate explode, possibly turning the peaceful Occupy movement into a more violent, more demanding Occupying force the government will have to deal with.
—John Watson Former WILM radio talk-show host