Delaware’s budget picture may not be as grim as initially anticipated.
State revenue estimates improved this month as lawmakers get set to begin work on a 2021 spending plan.
The Delaware Economic and Financial Advisory Council’s May projections offers a slightly rosier picture than a month ago. DEFAC is upping its revenue forecast for both the current fiscal year and FY 2021.
The group is adding $92 million to the 2020 bottom line over last month’s forecast – and about $73 million from its April projection for 2021.
The combined increases mean lawmakers have about $491 million less to work with than when Gov. Carney offer his 2021 budget plan in January. But last month that number was $749 million.
State Secretary of Finance Rick Geisenberger explains why the numbers improved.
“We’re taking back into our revenue about 21 percent of what we took out in March and April," Geisenberger told DEFAC at its Thursday virual meeting. "The summary is: we overshot in April - lacking a lot of data and the behavior of taxpayers was a little bit different that what we thought it would be. So, we overshot.”
DEFAC added about $68 million in personal income revenue for this year and $63 million for 2021. State officials say they also got help on the expenditure side by an increase in the federal share of Medicaid included in the CARES Act.
But State Rep. Quinn Johnson (D-Middletown), co-chair of the budget-writing Joint Finance Committee (JFC), said Thursday he expects lawmakers will still take a conservative approach to crafting the state's 2021 spending plan.
"I feel more like that we're going to see the 2nd quarter numbers won't be what we'd hoped them to be, and of course, we're going to be revising these down," said Johnson at Thursday's DEFAC meeting. "Not a negative on the people putting these numbers together. The problem is just what data you have today to do it. We need to understand that we need to prepare for a possible downturn."
JFC starts budget markup June 2nd. DEFAC offers its final revenue forecast for this budget year on June 17th.
