The final revenue forecast of this year’s state budget cycle suggests Delaware can add $84.3 million to its appropriation limit in the coming year.
That projection could enable lawmakers to pass a 2024 budget without significant revisions before the end of the fiscal year June 30th.
Higher-than-expected personal income and corporate income tax revenues drove much of the increase, as did lower-than-expected claims from Delaware's unclaimed property reserves. In total, the projection increases the state's appropriation limit to $6.63 billion.
By comparison, the General Assembly's current proposed operating budget stands at $5.6 billion, which includes $125 million in spending not included in Gov. John Carney’s original proposal. That additional spending includes new funding to cover rising Medicaid costs tied to the end of pandemic-era federal assistance and growing enrollment of patients with long-term care needs.
While Delaware’s Economic and Financial Advisory Council expects revenues to decline next two years, Finance Director Rick Geisenberger says those predictions do not yet factor in the state’s newest source of income.
“There is a revenue source not on Fiscal Year 2025 that we’ll revisit at the October meeting, which is the marijuana tax," he said.The reason it’s not in there is that the Controller General has not yet certified. That act doesn’t fully take effect until the Controller General certifies.”
Geisenberger expects that certification to come later this summer, allowing state leadership to consider the new tax revenue in future forecasts.
But Director of Research and Tax Policy David Roose says current projections suggest that revenues will drop next year.
“Every single major revenue source and almost every minor revenue source is showing a decline," he said.
Meanwhile, House Speaker Pete Schwartkopf has warned his caucus to prepare for possible future spending and service cuts in the face of declining revenues.
