Delaware’s budget picture looking slightly more rosy for next year according to the latest state revenue report, projecting $29.8 million more to use for FY 2017 according to the Delaware Economic Financial Advisory Council (DFAC).
That ends what has been a stagnant cash flow trend that’s handcuffed state government for the past two budget cycles.
But much of the new money comes from $40 million in escheat money that had traditionally been earmarked for the Transportation Trust Fund. The Markell administration permanently reverted that money back to the General Fund in the most recent budget.
That leaves a projected $135 million deficit according to state budget director Ann Visalli, noting much of that comes from required teacher pay increases and increases to public worker and retiree health benefits.
"All ideas are welcome," said Visall, in helping to find a solution.
Otherwise, DEFAC noted a slight uptick in collections of the personal income, gross receipts and realty transfer taxes.
The situation continues to tees up a potential impasse for lawmakers when they reconvene in January.
Republicans have historically wanted to wait until final revenue projections come out in June before lending votes on any tax or fee hike.
Some Democrats are pushing efforts to raise $100 million by increasing the ceiling for the corporate franchise tax – other progressives want to set that threshold even higher.
"There’s still an issue here, a structural problem on the revenue side and we’re going to look at the expenditure side," said Finance Secretary Tom Cook.
An offshoot of DEFAC analyzed state revenues this past spring and Gov. Jack Markell (D) has been arranging a similar committee to look at public spending for the past few months.
Markell will base his proposed budget for FY 2017 on revenue estimates released Dec. 21.
