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State budget shortfall grows larger according to latest revenue estimate

Delaware Public Media

Delaware’s budget shortfall continues to grow, now hovering just below $400 million for fiscal year 2018.

The Delaware Economic and Financial Advisory Council (DEFAC) lowered state revenue estimates again Monday.

DEFAC anticipates the state will bring in about $4.8 million less this year and $11 million less in 2018.

But the state did save about $6.5 million on the expenditure side, according to DEFAC’s latest report.

Taken all together, DEFAC’s latest forecast adds another $9.1 million to the state’s 2018 deficit, which stood at $386 million following last month’s meeting.  It now sits at $395 million.

The latest hit comes once again from declining corporate income tax revenue, which the panel dropped by another $14 million in 2017 and $15.8 million in 2018.  Those projected losses more than offset $14 million in anticipated gains in personal income tax revenue this year and next.

The additional bad news comes just weeks after Gov. Carney unveiled his $4.1 billion budget plan that seeks to address the deficit with an equal mix of tax hikes and spending cuts.  His plan would raise personal income tax rates between two-tenths and four-tenths of a percent while eliminating itemized deductions and boosting the standard deduction.  It also includes $37 million in education cuts, cutting 200 vacant jobs and trimming a property tax credit for senior.

DEFAC will update its revenue forecast again May 15th.

Tom Byrne has been a fixture covering news in Delaware for three decades. He joined Delaware Public Media in 2010 as our first news director and has guided the news team ever since. When he's not covering the news, he can be found reading history or pursuing his love of all things athletic.
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