MuniLand

Talking to Delaware’s governor about spending

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.

Moody’s wrote about Delaware in a February, 2013 General Obligation bond rating action:

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.

Muni sweeps: Muniland reins in the borrowing


Excellent chart from Barry Ritholtz’s The Big Picture. He uses data from the Federal Reserve’s Flow of Funds Accounts to map credit flows. State and local governments have become negative borrowers in the first quarter as the amount of bonds that have matured and the amount of principal that has been repaid exceeded new bond issuance. States and municipalities are making the hard fiscal choices and restraining borrowing and expenditures. It’s painful, but it must be done.

Delaware opens the procurement kimono

From Governingpeople.com:

Delaware has launched a new website to make it easier for entrepreneurs, small businesses, and other employers to do business with the State of Delaware. The new website will serve as a resource for companies interested in bidding for State contracts. The Governor hopes that the site will make the bidding process easier and more transparent for business owners so they can create jobs in the state easily…

…The public will also be able to see state spending trends and details of contract usage. The public can also access business development tools, customer satisfaction surveys and “I Found it Cheaper,” which allows individuals to submit suggestions on how the State can procure goods for less money.

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