The group that monitors Delaware’s fiscal health reports the state’s revenues are less than previously forecast.
On Monday, the Delaware Economic and Financial Advisory Council lowered its revenue projection for this fiscal year by about $30 million since its December findings. The revenue estimate for the new year beginning July 1 also dropped about $6.5 million from previous projections.
Most of the decrease was linked to reduced corporate income tax collections and costs associated with abandoned property.
Since fiscal year 2017’s budget was put in place, the State has faced about $100 million in revenue decreases.
The State also faces a $385 million deficit, which is about $35 million more than anticipated prior to Monday’s report.
The report is released just three days before Gov. John Carney, D-Delaware, releases his proposed budget for fiscal year 2018.
State budget director Michael Jackson said the projections aren’t surprising, and that the Governor’s budget will propose a long-term fix to the state’s issues.
“As we continue to meander through uncertain economic future I think this is a recognition of what the revenue structure we have in the state and how it needs to improve to better reflect economic growth,” he said.
“It’s a significant challenge…but it isn’t something we haven’t overcome in the past.”
Secretary of Finance Richard Geisenberger said corporate income tax and unclaimed property taxes are two volatile revenue sources that aren’t positioned for growth—and they make up 85 percent of the State’s $100 million revenue decline since June.
“They’re not growing nationally, they’re not growing here in Delaware, and that’s a challenge we face in our overall revenue structure,” he said. “That’s a structural challenge that these revenue sources aren’t growing even with national or local economic growth, and that’s the challenge, partly, we’ll try to address.”
Gov. John Carney will present his budget proposal for FY18 on Thursday.