The Delaware Economic and Financial Advisory Council (DEFAC)releases its final revenue forecast before Gov. John Carney delivers his 2025 budget plan.
DEFAC projects a slight increase of $12.8 million in revenue for the current fiscal year compared to its October prediction, as well as a $33.5 million revenue increase for fiscal year 2025
The changes give Gov. Carney and lawmakers another $89.1 million to work with when developing next year’s budget - setting the bar at $6.49 billion
Carney delivers his plan next month. He will likely continue to employ budget stabilization, meaning he will only consider the benchmark appropriation of around $6.125 billion when crafting his budget, setting the rest aside for reserves or one-time spending.
But council member Ed Ratledge says state expenditures are continuing to increase: “And then you come up with a number of $6,356,800,000, which is an indication of what we’re going to spend this year, which is an 8.5% increase over last year.”
Office of Management and Budget Director Cerron Cade notes health insurance and Medicaid costs for the state continue to rise, and will likely play a large role in next year’s spending increase, particularly coverage of weight loss drugs and surgeries.
“So it was a scenario where you introduced the drugs as an alternative to the surgery – now they’re actually being used in conjunction, and the costs for both are exceeding expectations," Cade said.
As of December, DEFAC reports the state has spent $43.8 million more in health care benefits than FY 2023 —a 10.9% increase.
He adds Delaware’s most expensive health insurance cost drivers are those who are elderly or disabled, and both populations continue to increase as more people choose to retire in Delaware.
