Delaware Public Media

Delaware sees little revenue growth in initial FY 19 revenue projection

Sep 18, 2017

The initial revenue projection for the 2019 budget cycle sees little growth in the Delaware’s revenue.


The Delaware Economic & Financial Advisory Council (DEFAC) forecast could leave lawmakers needing to find more money to balance next year’s budget.

Only months ago, state lawmakers faced a budget shortfall of more than $300 million.

Finance Secretary Rick Geisenberger says  tax increases enacted by lawmakers in June helped make up the difference, adding over $200 million to the state’s bottom line. But he notes that it wasn't a long-term fix.

"While what was enacted back in June helped address the challenges we had for Fiscal Year 18, as we start to put together Fiscal Year 19 and 20, we’re going to have similar challenges,” said Geisenberger.

 

Even with the new tax revenue available in 2019, Geisenberger says that may not be enough to keep up with rising costs.

“If you look at the out year impact, looking at fiscal year (2019), which is a budget which we’ll be assembling when the legislature comes back in January, you’re looking at 1.2 percent revenue growth,” he said.

Beyond the new tax revenue, DEFAC’s September revenue estimate adds just $31 million to the current year and just under $64 million next year.

At the same time, Delaware may need to invest more in education, depending on the state’s final K-through 12 enrollment numbers. It’s also dealing with rising health care and pension costs. The budget is also being impacted by the state’s hiring of more correctional officers after the riot at the Vaughn Correctional Center earlier this year.

The next DEFAC revenue estimate comes December 18th and will be the one Gov. Carney's administration uses to craft its 2019 budget proposal.  Before that, there's budget hearings in November with individual state agencies on their 2019 budget requests.

State budget director Mike Jackson says Monday's estimate gets the ball rolling on trying to build what he called a sustainable budget plan.

“I think the important takeaway from today is trying to avoid building a budget where we’re relying on one-time sources of revenue.  Jackson said.