Three months into the process of developing a state spending plan for Fiscal Year 2013, Delaware’s revenue projections bear a close resemblance to those at the very beginning of the year. Revised numbers approved this week by the Delaware Economic and Financial Advisory Council (DEFAC) nearly offset the downward forecasts adopted at the March meeting. More than $23-million dollars in all have now been added to projected state revenues in the current and coming fiscal years (FY 2012 and FY 2013).
While the numbers are now up slightly from the figures used by Governor Jack Markell when he introduced his FY ’13 spending plan in January, state officials say the next two months will truly tell the story of the First State’s relative economic strength, the prospects of a growing recovery and possible areas of concern.
[audio:http://www.wdde.org/wp-content/uploads/2012/04/visalli1.mp3|titles=Delaware Office of Management and Budget Director Ann Visalli explains what the new estimate means to developing a FY '13 budget;.]
“As we move through May and June and work with the Joint Finance Committee, we’ll still have some very tough decisions to make,” Office of Management and Budget Director Ann Visalli said.
State revenue forecasters at their April meeting settled on a revenue figure of $3.3845-billion for Fiscal Year 2012, down $15.9-million from the March projection. The panel also boosted projections for FY ’13 by $39.5-million, estimating available revenues at $3.5829-billion.
As is often the case, there is more “behind the numbers.”
Estimated payments for Corporate Income Taxes were due April 1st, and projections were lowered during the March meeting of the Delaware Economic and Financial Advisory Council. Based on collections so far this month, the panel voted to accept the revenue subcommittee’s recommendation to boost corporate income tax projections by $7.5-million for the current fiscal year which ends June 30th and by $7.9-million for the next fiscal year.
[audio:http://www.wdde.org/wp-content/uploads/2012/04/lewis1.mp3|titles=DEFAC revenue subcommittee chair Ken Lewis discusses an encouraging trend in corporate income tax collections]
“That’s an indication of strength,” revenue subcommittee chairman Ken Lewis said.
DEFAC members also shifted $30-million in collections on abandoned property taxes from FY ’12 to FY ’13, due to a revised auditing process and an outreach program to identify property owners and investors.
“The state’s been very good about allowing the people who are being audited some ‘wiggle room’ so they can have time to comply with the regulations,” Lewis added.
April’s DEFAC session resulted in no change to projected collections from the franchise tax or personal income, gross receipts and bank franchise taxes. A slight uptick is projected in realty transfer tax collections, while public utility taxes are trending downward. Lottery-related revenues are forecast to rise slightly.
[audio:http://www.wdde.org/wp-content/uploads/2012/04/cook1.mp3|titles=Delaware Secretary of Finance Tom Cook expects $30-million in abandoned property related taxes will likely be collected in FY '13 instead of FY '12. ]
“The next two revenue estimates in May and June are very important ones as they take into account the personal income tax payments, corporate franchise tax payments, and bank franchise and insurance payments,” State Finance Secretary Tom Cook said.
Members of the Joint Finance Committee will begin the two-week budget mark-up process in late May. Delaware is required by its constitution to have a balanced budget by June 30th.
DEFAC also estimated $431.4-million available for the Transportation Trust Fund in Fiscal Year 2012, and $440.2-million in FY ’13. The increase from the March estimate of more than $5-million in the two years combined is largely due to higher projected collections in motor vehicle document fees, one of the sources of money for the TTF, which pays for road- and bridge improvement projects. Other sources of revenue include tolls and the tax on gasoline.
