The Delaware Economic and Financial Advisory Council’s new revenue forecast shows a bump up in 2010, but a significant drop for 2011.
The Delaware Economic and Financial Advisory Council’s new revenue forecast for the First State provides both good and bad news.
DEFAC estimates fiscal year 2010 revenues are up a half million dollars to 3 billion 143.6 million dollars.
That’s a good sign according to state officials, especially since it reflects the hit the state’s tax base took with the closing of the Valero refinery last month.
“It keeps us cash positive. We’re still about 70 million dollars in the black. This time last year, as we came into the spring , if you recall, we were very close to going cash negative.” said Director of the Office of Management and Budget Ann Visalli, “That’s very good news for us for the current year, And if things hold steady, that money will be available for us to appropriate in 2011.”
And the state appears to need whatever money it can find next fiscal year.
DEFAC’s 2011 revenue forecast was anything but rosy, down 42,4 million dollars to 3 billion176.3 million dollars. The key factor is job loss and its impact on revenue.
“We took a large hit in the personal income tax area, tracking for withholding from businesses.” said Acting Secretary of Finance Tom Cook, ” We’re not receiving the income we expected from withholding.”
This is the last DEFAC forecast before Governor Jack Markell submits his plan for a balanced budget late in January.
“Our challenges just got greater. We had hoped the national economy and the state economy, as a result, would turn around a little quicker than it is.” said Visalli, ” We’re probably looking at closing hundreds of millions of dollars of a gap.”
“We’re holding our own right now, but times are still tough. Next fiscal year certainly looks like its going to be just as much of a challenge as the current fiscal year” added Cook.