I spend almost no time looking at the balance sheets of the healthiest states in muniland. They happily chug along collecting taxes and providing services, with rarely anything newsworthy to make me crack their books. When I was contacted last week to do an interview with Delaware’s Governor Jack Markell, I wondered if there was even anything I wanted to discuss about his AAA-rated state.
In fact, it was wonderful to hear a public official talk about his approach to refining and improving the way government delivers public services. It was a change from battling fiscal crisis with a budget ax.
The outlook for Delaware is stable. The combination of the state’s strong structural governance features (including frequent revenue forecast revisions), speedy actions to deal with downward revenue revisions, the use of recurring solutions to solve gaps, a low-risk debt profile and high pension funding ratio will result in the state coming out of this recession in a strong position relative to its peers.
Delaware has an independent economic advisory council – the Delaware Economic and Financial Advisory Council (DEFAC) – composed of several dozen business leaders and academics who annually project how much revenue will be available to budget. This process, established in 1977, creates a non-partisan platform to build a state budget. Markell says that he and the legislature stick with the DEFAC numbers when developing the budget.