Those who live in New Castle County may already know this, but for those that don't - the economic outlook for New Castle County Government is bleak. Once regarded as the economic engine for the State of Delaware, the county is on track to look more like Detroit and the surrounding suburbs. To put it simply, the county is seething in expenditures, despite higher revenue projections.
Let's break this down in plain English. In a public available report on the New Castle County web site, the County projects higher revenues in FY2010, and FY2012-2015. At the same time, the County projects higher expenditures in FY2012-2015.
Clearly, the economic picture of New Castle Government is headed into the wrong direction.
But let's flashback for a minute to when Chris Coons assumed office as New Castle County government to FY2005, most notably with the County's financial reserves.
In FY2005, the County projected to have financial reserves of $86.MM. According the report (link above), the projected fiscal reserves of New Castle County the projected financial reserves for FY2010 are $49.4MM and $44.8MM for FY2011. What's even worse, County officials project a negative $17.1MM loss to the County financial reserve account.
The question is why is are the expenditures rising in New Castle County, when the taxpayers had a net 47% tax increase in property tax revenues to the County. For disclosure, the County raises property taxes 5% in 2006, 17.5% in 2007 and another 25% in 2009.
The answer is expenditures are outpacing revenue growth. Here's why:
- Personnel expenditures are experiencing a 4% annual growth
- Non-personnel expenditures are experiencing a 2.5% annual growth
- Debt Services expenditures are up $10MM from FY2005 to FY2010 and projected to go higher.
Additional Source: New Castle Government FY2011 Comprehensive Annual Budget Summary.
It is quite evident that New Castle County government does not have its financial house in order. It is even more blatantly evident that Chris Coons has squandered the good financial standing of New Castle County government and has set it on a path for bankruptcy. We may be there just yet, but it appears to be imminent.