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Additional revenue creates spending questions for next year's budget

Delaware Public Media

The First State’s rosy fiscal picture could tempt lawmakers to spend more in next year’s budget.

The Delaware Economic and Financial Advisory Council (DEFAC) said in its May forecast that the state has $180 million more to work with than the governor anticipated in his January spending plan.

But Gov. John Carney (D) warns lawmakers to use restraint when crafting next year’s budget.  He was joined by co-chairs of the budget-writing Joint Finance Committee, State Sen. Harris McDowell (D-Wilmington) and State Rep. Melanie George Smith (D-Bear).  They issued statements calling for limiting base budget growth

Senate Minority Leader Gary Simpson (R-Milford) agrees.

“When you have excess revenue, I’d like to see it a lot of it go to one-time projects, whether it’s school refurbishing, or similar things as that,” he said.

Simpson adds he hopes to restore some of the grant-in-aid funding to nonprofits that was trimmed a year ago. He also favors some one-time putting money into a proposed fund to fill future shortfalls.


Finance Secretary Rick Geisenberger said the state took in $30 million more in corporate income taxes and $22.5 million in franchise taxes. But Geisenberger said the state will likely lose money in the next few years because of corporate tax cuts Congress enacted last year.

“This is reflected in the fiscal year 19 forecast," he said. "We do expect some loss of revenue from the way the corporate income tax was structured, particularly due to something called bonus depreciation.”

Last year, a shortfall forced cuts to reach a balanced budget. This year’s windfall opens the door to restore funding or pay for new priorities.

The Joint Finance Committee starts marking up next year’s budget this week.  There is one more DEFAC revenue estimate next month before lawmakers vote on an final 2019 spending plan.

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