For the first time in a while there is some good money news coming from the Delaware Economic and Financial Advisory Council.
Delaware’s declining revenues seem to be turning the corner, according to the most recent projections from the state’s revenue forecasting team.
The Delaware Economic and Financial Advisory Council raised estimated revenue by $57.5 million for the current fiscal year and by $52.5 million for FY2011.
The state is starting to see slight gains in a few key areas, such as the Corporate Income Tax and Gross Receipts Tax. More money coming into the state means less of a deficit that Delaware needs to make up for the next fiscal year.
“Those are revenue sources that probably have some of the most impact or connection to the actual economic performance of the state,” said David Gregor of the Department of Finance.
DEFAC is also projecting big increases next year coming from abandoned property ($30 million) and the lottery ($40.5 million). The lottery estimate is based on projected revenues from table games, which was recently passed by the legislature and expected to be up and running as early as June.
But Office of Management and Budget Director Ann Visalli says the table games income has already been included in Gov. Jack Markell’s 2011 budget plan. That means a projected $253.7 million budget gap for 2011 will be reduced by only about $12 million.
Still, that’s not bad considering this time last year lawmakers were looking at a roughly $800 million budget gap. But Visalli cautions, “we’re not out of the woods yet.”
“Overall there are some good indicators in the revenue numbers but we still have many challenges ahead of us in terms of the budget,” she said. Among those challenges, Visalli cites increasing Medicaid costs and a drop in federal stimulus funds.
And while the state’s economic news is relatively good, Gregor warns not to expect a rapid recovery.
“Unlike other recoveries this one is supposed to take quite a while,” he said. “It’s not going to be V-shaped. Things aren’t going to bounce back in a hurry.”