Following Gov. Matt Meyer's first State of the State address, Democratic lawmakers express relative alignment with his policy goals, but differences in their planned approaches are unfolding.
In his speech, Gov. Meyer increased commitment to his campaign promises of personal income tax bracket changes, implementing a new equitable education funding formula and further affordable housing and healthcare efforts.
While Democratic lawmakers agree on the need to focus on these areas, hesitancy around Gov. Meyer’s push for accelerated timelines and increased spending coupled with federal funding cuts and slowed revenue growth is generating concern.
"We want to push our state forward, and we really have to think strategically and be careful about how we do it, and really be careful about deadlines as well because we may not meet Delawareans expectations as we continue to see these cuts come down," House Speaker Melissa Minor-Brown (D-New Castle) said following the governor's address.
Personal income tax bracket changes and state revenue
One of Gov. Meyer's primary focuses is creating new personal income tax brackets for Delaware's highest earners and implementing modest reductions for those who make less than $60,000.
It's an effort to help address Delaware's stagnant revenue growth — the state's economic advisory council is projecting revenue will only grow by 1.9% next fiscal year, but Gov. Meyer is planning to increase stand spend by 7.4% in his FY26 Recommended Budget.
"At a time when the federal government is doubling down on tax cuts from 2017, where the majority of the benefits go to the wealthiest, we’re readjusting the scales to ensure the richest pay their share and working-class Delawareans get a fair shake," Gov. Meyer said during his address. "When our budget passes, we will reduce income taxes for 92% of Delawareans, the first reduction in our state income tax in decades, and add new brackets for those making more than $125,000, a quarter million dollars, and half a million dollars a year."
While the governor states the changes assertively, his proposal requires approval from the General Assembly before it can go into effect.
Last week, State Rep. Sean Lynn (D-Dover) introduced a bill outlining Gov. Meyer’s tax bracket plan, but the legislation has yet to receive a hearing in the House Revenue and Finance Committee.
Additionally, Speaker Minor-Brown indicates Democrats are not completely unified behind Gov. Meyer's plan and that conversations are still ongoing as to what the best path is moving forward.
"I feel that Democrats are aligned on knowing that we have to do something, but what that something is — at the moment, we're not really sure. We're looking at many different avenues on which direction we should take," the House Speaker said. "I'm not sure if the bill you see before you will be the bill that you will see across the finish line, but I know that we will do something."
Tax legislation only requires approval from three-fifths of each chamber in the legislature, meaning any effort to change personal income tax brackets can be made without Republican support.
Despite this, GOP leadership is making it clear they feel that Gov. Meyer's tax bracket changes will cause more economic strain on the First State, believing the proposal will hit small business the hardest and disincentivize high earners from moving to Delaware.
"The governor said that we need to be attracting health care providers to Delaware. Those health care providers are the ones that are making that money that they want to tax more," Sen. Minority Whip Brian Pettyjohn (R-Georgetown said. "If they're taxed more in Delaware, if their children aren't going to get an effective education here in Delaware — looking at Delaware compared to somebody else, they're going to go somewhere else. So we need to make the Delaware environment good for those high wage earners so that they're going to come here. [If] we get more high wage earners, we don't need to tax them more because there's going to be more of them here."
Senate Democratic leadership expressed similar concerns as the House Speaker, noting the new tax brackets would bring a relatively modest amount of new revenue to the state, and they want to think about broader revenue solutions.
"Taking a look at [Rep. Lynn's bill], confirming the numbers, figuring out how things change if you do this or do that, while we're also tracking energy costs and trying to provide relief to Delawareans in that form, and fundamentally figuring out what kind of other cuts might have to happen as a result of what's going on at the federal level, or ways that we have to fill in further cuts at the federal level — so that's all in flux. And so figuring out what the total picture is is a really important part for our caucus to understand how to best approach the issue of revenues," Sen. Majority Leader Bryan Townsend (D-Newark/Glasgow) said.
Delaware second-highest revenue source, behind personal income tax, is incorporation revenue, which includes corporate franchise taxes, business entity fees and limited partnerships and limited liability companies.
Delaware has long held the title as the premier state for businesses to incorporate in due to its unique corporate law structure at its specialized court system for business matters known as the Delaware Court of Chancery.
Some businesses have felt that recent court decisions have altered the predictability of Delaware's corporate laws, prompting some business to reincorporate in other states or at least threaten to do so.
Amid worries over a "mass exodus" and jeopardizing one of the state's most crucial revenue sources, the General Assembly passed a controversial corporate law overhaul that was promptly signed by Gov. Matt Meyer just over two weeks ago.
Gov. Meyer briefly mentioned the efforts to protect the franchise in his address: "Thanks to Lt. Gov. [Kyle] Gay, Sen. Townsend, Rep. [Krista] Griffith, Secretary [of State Charuni] Patibanda-Sanchez and leadership in both chambers, we are boosting our corporate franchise, protecting one-third of our state budget, and ensuring Delaware’s Court of Chancery remains a crown jewel of America’s legal system."
Just over a week ago, the corporate law changes received their first known legal challenge in the Court of Chancery. Plumbers & Fitters Local 295 Pension Fund is seeking a declaration that the changes are unconstitutional.
"There have been additional companies that have announced they're leaving since we passed it. Those all essentially indicated that they were far down the process of making those announcements, even as the bill was in process — kind of too late to stop some of them. But we've heard from others that this does make them rethink that Delaware is committed to the balance and the predictability that had been the hallmark for so many years. So we have every reason to believe that it's making the best of a tough situation. With regard to the legal challenge, we have reason to believe that it will not be successful," Sen. Townsend said.
Sen. President Pro Tempore Dave Sokola (D-Newark) says he's interested in seeing if the corporate revenue trend lines are "where we hope they are" when the Delaware Economic and Financial Advisory Council (DEFAC) presents its updated state revenue and expenditure projections next month.
New education funding formula
Gov. Meyer's push for a new equitable education funding formula was at the forefront of his gubernatorial campaign and remains a clear priority within his administrative tenure.
"To ensure equity across our state, however, we must acknowledge that a 21st century school system deserves a 21st century funding formula. In other words, we must ensure every school receives the targeted help it needs to thrive," Gov. Meyer said in his address. "Thank you to Sen. [Laura] Sturgeon and those on the Public Education Funding Commission, working to update our school funding formula."
While similar task forces have been created before, the Public Education Funding Commission (PEFC) has been meeting since September 2024 to compile recommendations on how to change the way Delaware funds its education system.
The commission's deadline for rough draft recommendations are due by October 2025, with the final set due by July 1, 2026.
But the Meyer administration has been hinting at an accelerated timeline since the governor took office, something State Rep. Kim Williams (D-Stanton) expressed concern over at the PEFC's February meeting.
At that meeting, Secretary of Education Cindy Marten explained there was nuance in that expectation, noting although the governor would like to see some plans by July 2025, he understands there will need to be at least a year of buildup before concrete financial changes can be implemented.
Gov. Meyer doubled down on that summer timeline during his address: "We cannot ask our schools to prepare our students for the future with a funding model from the 1940s. Our students have waited long enough for a system that will help each of them achieve their full potential. That is why I am calling on the legislature to pass a holistic funding reform framework before you begin your summer vacation. Let’s get this done."
If the commission were to commit to Meyer’s timeline, it only has four meetings scheduled before the end of the legislative session to deliver.
"We don't want to rush it. Let me say that we want to make sure that we're doing the right thing for Delaware — the right thing for Delaware's children and for our future generations, and that's going to take time. So I'm not sure if we're going to meet that deadline or not. I can't make any promises, but we know that when we finally have a path forward that it's going to be the right path forward because we're going to take our time and do it right," Speaker Minor-Brown said.
GOP leadership agrees that the framework is not likely to be approved by the end of the legislative session.
"We need to make sure it's done right, and rushing something — I would just say we need to rush things like development. We need to make sure we get this right. This is a formula that is embedded deep within our education system right now, and that type of change is not something that could happen overnight," Sen. Pettyjohn said.
The PEFC's next meeting is scheduled for Monday, April 14 where they are expected to review potential alternative funding formulas.
GOP left with hard feelings following governor's remarks
After his initial expressions of gratitude, Gov. Meyer opened his address by speaking directly to legislators, noting that despite their varying ideas on how to best serve Delawareans, he believes partnership and collaboration are crucial between the two branches.
He then took the opportunity to address Republican lawmakers directly.
"Let me take a moment to speak directly to those in this chamber offering unconditional support to the current leadership in Washington: you cannot have it both ways," Gov. Meyer said. "You cannot offer your full throated support for a federal administration that is slashing hundreds of millions of dollars in critical funds to our state and promoting tariffs that are crippling our economy, and then, in the very next sentence, rise in opposition to responsible and hard decisions we’re making here in Delaware to meet those challenges."
"The governor starts off with talking about not being partisan, DC, and then takes an absolutely unnecessary and totally inappropriate shot at the minority party in a very partisan way, lecturing us about federal issues over which we have no control, and then turns around later in the speech and talks about essentially a Delaware Department of Government Efficiency," House Minority Whip Jeff Spiegelman (R-Clayton) said.
Rep. Spiegelman is referring to the section of Gov. Meyer's speech that focused on improving government efficiency and transparency: "I’ve been inspired by what I know we can accomplish, working together to build an innovative, efficient, and responsive state government... and a government that cuts some programs and costs, using a scalpel, not a chainsaw. We will remake our state government so it works better for you. Take workforce development. Our state spreads workforce development across multiple state agencies, and too often we do things simply because that’s how they have always been done. We will streamline these efforts into a single office, with measurable goals and transparent funding," the governor said.
Gov. Meyer also thanked Delaware's federal delegation and Attorney General Kathy Jennings for fighting against the Trump administration's various program and funding cuts.
While Rep. Spiegelman and his fellow Republican leaders expressed similar disappointment with the governor's pointed remarks, they still touted a willingness to work with the chief executive on some of his policy goals, particularly on improving public education.
"I want to work with him every way I can. I want him to be successful because when he's successful, our state is successful. I was very upset with the cut he made to our federal delegation right now — what they're doing. And then he talks about abuse and waste and fraud out of state government. What do you think this president is trying to do nationwide? We're in debt almost $37 trillion. We can't afford to go on. We're going to be a bankrupt nation if it does go on. All we want to do is cut that same waste out of our federal government that he wants to cut out of Delaware. We need to work every way we can to have the most efficient run government, if it's federal or state," Sen. Minority Leader Gerald Hocker (R-Ocean View) said.
In addition to education reform, Republican leadership expressed a strong desire to increase efficiency around the state's regulatory permitting processes, cutting long-time state employee vacancies out of the budget and alluded to more cost-saving proposals from their caucus coming soon.
