State budget shortfall grows larger according to latest revenue estimate
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.