COVID-19's economic impact creating a budget crisis for Delaware
The state is getting its first look at just how big a hole the COVID-19 pandemic blowing in Delaware’s budget.
The Delaware Economic and Financial Advisory Council’s (DEFAC) latest estimates show revenue cratering for both the current fiscal year and FY 2021.
The group’s revenue estimate for the current year plummeted $416 million from last month’s forecast – and it sliced just over $273 million from its March projection for 2021
The combined decreases mean lawmakers have about $749 million less to work with than when Gov. Carney offer his 2021 budget plan in January.
DEFAC said tremendous uncertainty, including the shape of recovery and the lack of economic data, clouds its estimates.
With that in mind, some have floated the idea of using a continuing resolution to keep the state running for a time – and adopting a budget later.
Carney addressed that possibility at his press briefing last Friday
“I’m not supportive of that kind of approach," said Carney. "I spent 6 years in Congress and we never had a budget. We had continuing resolutions all the way through, I don’t think that’s a good way to do your fiscal management.”
The biggest revenue hits are expected to come in personal income and corporate tax revenue.
The state is expected to lose nearly $223 million in personal income tax revenue this year - in part because the filing deadline has moved back past the end of the fiscal year. But DEFAC also projects a dip of almost $132 million personal income tax revenue in 2021.
Corporate tax revenue is expected to drop just under $81 million in 2020 and another $49 million in FY 2021.
DEFAC also expects major losses in lottery revenue this year - about $46 million with Delaware three casinos closed. It also sees gross receipt tax revenue falling about $28 million his year and $23 million in 2021.
DEFAC is scheduled to update its revenue forecast again on May 18th.