With proposed costs for running state government again exceeding expected revenue, Gov. Jack Markell plans cuts in preservation programs and changes to state employee health plans to offset an expected $49.5 million revenue deficit for Fiscal Year 2017.

Markell released his proposed financial plan during a press conference held today in Dover. Both he and Ann Visalli, director of the state’s Office of Management and Budget gave an outline of the plan during a media briefing held the night before.

Markell’s $4.98 billion spending plan includes $4.1 billion for the general fund operating budget, about $487 million for capital spending, $337.5 million for transportation improvements and $43 million for grants-in-aid.

As in years past, however, much of the state’s spending is determined by what the state calls “cost drivers,” expenses such as salaries, healthcare costs and pensions, expenses over which the state has little control.

These cost drivers total $241 million, far exceeding the $222.8 million in revenue currently forecast by the Delaware Economic and Financial Advisory Council.

The gap is made even larger by the need to transfer $31.3 million from the general fund to supplement the general obligation bonds.

To help close the deficit, Markell is proposing $18.6 million in cuts to open space and farmland preservation accounts as well as the state’s energy efficiency fund.

The latter provides incentives for industrial and commercial activities to swap out old heating, lighting and air conditioning equipment with newer, more energy saving replacements.

Markell also is proposing $14 million in reductions to state employee and state retiree health plans, primarily by requiring newly hired employees to take part in plans with higher deductions. Much of those savings, however, also will depend on the state working with healthcare providers on ways to improve efficiency and encouraging employees to make better health care decisions. Just how those improvements would come about was not specified, however.

The state also is saving more than $2.8 million with the closing of the Emily P. Bissell Hospital in Brandywine Springs.

Markell’s proposed capital improvements budget envisions $8.5 million going toward the Downtown Development District program, of which Dover is a part, improvements to port facilities and riverfront development in Wilmington, $75.7 million for public education, including schools in the Cape Henlopen, Caesar Rodney Christina, Lake Forest and Polytech districts, and $18 million to be split between the University of Delaware, Delaware State University and the Delaware Technical Community College.

The budget also includes spending on libraries in Harrington, Duck Creek and Selbyville, trails and pathways improvements, and $45 million for improvements and maintenance at state-owned buildings.

In all, Markell said the proposed state budget is one of restrained growth that reflects the reality of reduced revenues for the First State. The budget has grown by just under an average of 2.8 percent annually in his seven years in office, Markell said, which adjusted for inflation and population growth, averages about 0.4 percent negative growth.