Cuts to Delaware infrastructure projects and grants given to nonprofits are looming as the final state revenue forecast proved to be another disappointment.
The Delaware Economic and Financial Advisory Council or DEFAC projects a $700,000 drop in total revenue for next year, which lawmakers have to use to balance their budget.
That's mostly due to drops in the corporate income tax.
It’s not the news any of them wanted to hear after they’ve seen revenue consistently trend downward by more than $50 million since the governor unveiled his proposed spending plan in January.
The Joint Finance Committee only has $41.6 million to split between capital projects and grants-in-aid, according to the report.
Nonprofits are bracing for a proposed eight percent cut, but a final decision will be made on an exact figure next week.
Despite the flat projections and falling revenues in the current year, state budget director Brian Maxwell says he’s more worried about the future.
“We’re able to [balance the budget] even taking that into consideration, so it’s really looking out into [fiscal year 2018] is where you’ve got to start to focus," said Maxwell. "But revenues growing slower than expenditures, obviously, it’s a concern.”
The Markell Administration has warned lawmakers of ballooning state employee healthcare costs that have fallen on deaf ears. One estimate shows a $484 million deficit by 2022.
There’s also hardly any talk in the General Assembly of shuffling its tax rates to make its revenue streams less volatile, despite the work of two committees last year.
That job will seemingly be left for the next governor.
