The Delaware Economic and Financial Advisory Council is giving its first financial outlook ahead of the 2021 budget cycle.
DEFAC is forecasting lawmakers will have about $4.76 billion to craft next year’s budget. It bumped its 2021 revenue estimate up about $50 million since its last meeting in June.
State Finance Secretary Rick Geisenberger said Delaware can’t depend on industries like oil and gas that other states use to fuel their economies. Instead, he said it relies on the banking industry.
“More than any other sector, financial services is a huge driver of how we do quarter to quarter, month-to-month,” he said.
Geisenberger said they’re predicting a slow down in franchise tax collections and unclaimed property tax revenue.
“When the economy’s doing well, the real estate transfer tax and personal income taxes and gross receipts taxes grow quite well and that’s reflected in this forecast," he said. "There are limits on what unclaimed property and franchise tax can grow.”
Delaware’s Supreme Court in June rejected an appeal from the state Finance Department to enforce a subpoena for records from a company challenging the state’s unclaimed property laws. A related federal lawsuit brought by Illinois-based Univar is ongoing.
Unclaimed property can include anything from forgotten utility deposits to abandoned insurance policies. The state collected nearly $440 million in abandoned property for 2019.
He said Delaware is also seeing a 35 percent drop in sports betting and expects future competition from Maryland.
