The Joint Finance Committee (JFC), which crafts Delaware’s annual operating budget, sends a $6.58 billion appropriations bill to the General Assembly for approval.
The fiscal year 26 budget is a 7.36% increase over the current year and does not dip into either of the state’s financial reserve accounts.
The committee worked off of former Gov. John Carney's recommended budget, which proposes a 6.9% budget increase, and made additions and changes based on Gov. Matt Meyer's budget reset, which proposes a 7.37% increase.
Budget highlights include at least a 2% raise for all education employees — continuing the promise toward teacher starting salaries of $60,000 — and a 2% raise for state merit employees.
It also includes $33 million to cover projected growth in public schools, $1.35 million for residential lead remediation, $2 million to support victims’ services agencies who have seen reductions due to federal cuts, $61 million for the Other Post-Employment Benefits (OPEB) Trust Fund for state retirees' healthcare and $85 million to continue providing healthcare to those covered by the state’s Medicaid program.
The committee also voted to fund two key provisions from Gov. Meyer's budget rest, which include $8 million for the Literacy Emergency Fund and an additional $2 million in funding for vouchers with the State Rental Assistance Program.
However, the committee opted not to fund Gov. Meyer's proposed $21.9 million federal contingency fund to offset potential federal funding cuts.
Funding for the new Inspector General’s Office, the Office of Veterans Affairs, the Grant-in-Aid Subcommittee and the Office of Suicide Prevention was also allocated — all of which still require final legislative approval before becoming official entities.
The body also set aside $3 million to cover universal free breakfast for Delaware students, an initiative sponsored by State Rep. Kim Williams (D-Stanton) as an alternative to State Rep. Sherae'a Moore's (D-Middletown) $50 million proposal to provide universal free school meals for all Delaware students.
Rep. William's free breakfast initiative and Rep. Moore's universal free school meals bill both await consideration in the House Appropriations Committee.
“And we accomplished this all without raising income taxes. We stayed within Governor Meyer’s budget reset growth and maintained the Budget Stabilization Fund at $469.2 million and the Rainy Day Fund at $365.4 million, so we’re ready for whatever the future brings," JFC Chair Kim Williams and Vice Chair Trey Paradee's (D-Dover) joint statement reads. “Together, we have developed a budget-writing process that favors transparency and efficiency. We also took seriously our responsibility to be good stewards of taxpayer dollars and that meant reducing state vacancies, making cuts where it made sense, and directing eventual revenue from legal cannabis sales into the General Fund, where it can support essential services for all Delawareans."
JFC members also opted to put a pause on funding the Diamond State Hospital Cost Review Board, which was legislatively created last year in an effort to curb rising healthcare costs by monitoring hospital budgets.
The constitutionality of the board is currently being challenged in court, and Rep. Williams says the state should be mindful of taxpayer dollars as they await a decision from the Court of Chancery.
State Sen. Laura Sturgeon (D-Woodbrook) was the only member to abstain from approving the funding pause.
“We have an unsustainably high cost of healthcare in our state as compared to other states. This is important work. I believe we have already voted on and seated the members of the Hospital Cost Review Board, and I have some heartburn with this decision," Sen. Sturgeon said.
The board costs the state around $500,000 annually in contractual services and $285,000 in salary.
While lawmakers also scrapped Gov. Meyer's plan to create new personal income tax brackets this fiscal year, legislative leadership acknowledges changes still may need to be made as federal funding uncertainty remains.
"Irresponsible federal funding cuts — especially to programs like Medicaid — will hurt Delawareans. These looming threats underscore the need for Delaware to evolve to meet both current challenges and future demands," a joint statement from Democratic leadership in both chambers reads. "To that end, Senate and House leadership will be working throughout the summer to modernize our income tax code as part of a broader effort to balance Delaware’s long-term fiscal stability while sustaining our investments in critical public services."
The budget bill will need to pass both chambers of the Delaware legislature before the end of session on June 30 and receive a final signature of approval from the governor.
