‘Tough questions are not welcome’: Former Delaware budget advisory chair fired after questioning lack of revenue data

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Delaware state lawmakers and others are voicing concern about Gov. Matt Meyer’s sudden firing of former Delaware Economic and Financial Advisory Council chair Michael Houghton just two days after WHYY News reported his concerns about the lack of tax revenue data provided by the administration.

The governor has been touting the growth of corporate incorporations in the state. But in the March DEFAC meeting, his administration declined to publicly share key numbers, including data on how much corporate tax revenue it has collected.

‘Tough questions’

State Senate President Pro Tem Dave Sokola, D-Newark, blasted the firing as political.

“Delaware’s tradition of responsible budgeting is centered on DEFAC’s ability to do its job free from undue political interference,” he said. “The governor’s decision to remove Mike Houghton from DEFAC for publicly asking questions about our state’s corporate franchise tax revenue threatens a process that has benefitted Delaware for 50 years.”

The governor’s office did not respond to questions about Houghton’s firing.

The corporate franchise tax, a fee that companies pay for the legal right to be incorporated in Delaware, accounts for nearly one-third of the state’s budget and is the state’s second-largest revenue source, after personal income tax.

Houghton had been making waves in the days before his removal about a lack of information from the administration on the collection of the franchise tax at a recent DEFAC meeting.

DEFAC members use revenue and expense data to forecast how much money the state will have to spend in the next fiscal year budget and make projections for future years.

Houghton publicly quizzed Delaware Secretary of State Charuni Patibanda-Sanchez and other officials about the lack of corporate franchise revenue data at a March 16 meeting, noting that Meyer’s office has been talking up the growth in entity formations.

“There’s been a lot of discussion about a surge and unprecedented streak of formation in 2025 going into 2026,” said Houghton during the meeting. “You would think that a $2.1 billion revenue stream would begin to play through and evidence itself.”

In a statement to WHYY News for an article published Monday, Houghton said that “it seemed unusual to me that there was no additional revenue information provided and no projections. That’s why I asked the questions I did.”

He received an email from Meyer on Wednesday night thanking him for his service and saying he was being replaced.

While the letter was polite, the longtime DEFAC member said his questions and WHYY News’ article seems to have “annoyed Gov. Meyer.”

“I think my termination may have delivered a different message to DEFAC, the legislature and the public [that] tough questions are not welcome by this administration,” Houghton said.

Houghton said he was waiting to see if Meyer would also remove him from the Delaware River and Bay Authority and the Delaware Marijuana Appeals Commission.

The Joint Finance Committee, the legislative budget writing group, uses DEFAC revenue and expense projections to guide its markup of the governor’s recommended budget.

Possible chilling effect on speech

Some state lawmakers, including the heads of JFC, all voiced concern that publicly questioning officials could result in political consequences from the Meyer administration.

“The purpose of DEFAC is to ask tough questions and to be an independent voice protecting the financial interests of our citizens — not to be a rubber stamp for the Meyer administration,” state Sen. Trey Paradee, D-Dover, who’s the JFC chairman, said in a statement. “Mike Houghton’s firing says more about our governor than it says about Mike Houghton. It’s a sad day for our state.”

State Rep. Kim Williams, D-Stanton, who’s the JFC’s vice chair, said she worried about a possible chilling effect.

“What’s next,” she asked? “If we ask a question, will our legislation be held up if they don’t like what we’re asking? I don’t know. Where does it stop?”

Current DEFAC Chair Alan Levin said he doesn’t think Houghton was let go because of the concerns he raised.

“I was surprised because I didn’t know it was coming,” Levin said. “I don’t know the rationale or why, but I don’t believe it was that questioning.”

The DEFAC chair said he asked Meyer last year to keep Houghton on the council because of his own inexperience. The governor did not contact Levin before terminating Houghton.

Levin said he was also concerned at the March DEFAC meeting about the lack of corporate franchise tax data, but he said he now understands it is normal for this time of year.

Lack of revenue data normal, Meyer administration says

That is the administration’s argument as well.

“It is accurate that there is substantial money, obviously that’s already come in this fiscal year and this calendar year as of March 1,” Meyer recently told reporters. “But it’s not accurate to say that every March DEFAC we have an updated number.”

However, Robert Byrd, a former DEFAC chair who served on the council for several years, described the lack of information as “unusual.” He said that at this point in time, the administration would have provided a general growth rate of all of the categories, including corporate franchise tax revenue.

“That’s a pretty significant category and you’re simply carrying it forward,” Byrd said. “It looks like they didn’t, for whatever reason, have enough information, or they didn’t do the work to figure out exactly what those numbers were going to be going forward.”

Patibanda-Sanchez told DEFAC members at the meeting that the delay was due to revenue that has not yet been collected from the 2025 entity formation growth.

However, a former State Department employee told WHYY News days before Houghton was fired that the department should have “almost all of the data,” because corporations that owe more than $5,000 pay quarterly and make their final payment March 1. The employee spoke on background out of concerns about publicly criticizing the Meyer administration.

The state should also have enough data to project revenue for LLCs, he said.