Delaware’s General Assembly is returning for another special session – this time to deal with a potential budget crisis.
Gov. Matt Meyer is calling lawmakers to Dover Thursday, November 13th to address revenue losses connected corporate tax law changes in the Trump administration’s Big Beautiful Bill Act.
Delaware is projected to lose about $400 million in revenue over the next two years due to those changes.
Some go into effect January 1 and Meyer says that makes taking action urgent.
“The impact of the Big Beautiful Bill on Delaware is really an immediate situation that if we don’t address right now, there’s hundreds of millions of dollars that we’ve ot to find awate to cut out of our budget,” said Meyer on the Oct. 23 edition of Delaware Public Media/WHYY’ ‘Ask Gov. Meyer’.
The primary solution lawmakers are expected to take up decoupling state and federal corporate tax laws to stop new federal deductions from hitting state revenues.Meyer supports that plan.
Democratic House Speaker Melissa Minor-Brown says lawmakers have been working with Meyer to find a path forward.
“I’m not sure right now if every single person in the legislature is going to be on board with making sure we get this done. What I can say is, again, this is a very complex and consequential issue, but at the same time, we are moving as quick as we can to make sure we have a plan to address the issue the best way possible," said Minor-Brown.
Minor-Brown adds the public also needs to be involved in the process.
“We’re working across legislative chambers to operationalize a special session, and to nail down member availability and ensuring we have important committee hearings and invite the public to those hearings so they can fully understand what we are doing,” said Minor-Brown.
The Delaware Economic and Financial Advisory Council (DEFAC) flagged the revenue loss in its first meeting of the new state budget cycle in October.
Its 2026 revenue estimate fell $98.8 million – a 1.5% decrease from its last meeting in June. The revenue forecast for 2027 is down nearly $47.8 million – a 0.7% decrease.
The changes leave the opening state spending limit for FY 2027 at $6.733 billion. That’s $352.1 million less than the current FY 2026 budget.
The state’s Budget Stabilization Fund can cover that gap. It currently holds $469.3 million dollars, but spending that down would leave state vulnerable in 2028 and beyond.
Even before the One Big Beautiful Bill Act changes, Delaware faced the real threat of looming budget deficits.
Last February, Office of Management and Budget Brian Maxwell said with no policy changes or budget cuts — and assuming 5% operating growth in FY 27 and FY28 — the state would need to pull $325 million from the state’s Budget Stabilization Fund for FY27, and for the following year, the state would fully exhaust the fund, but still have an operating deficit of $407.7 million.
Meyer concedes that is a structural issue that need to be addresses, but it is not as urgent as the immediate issue the state faces from the Big Beautiful Bill Act changes.
“That's developed over a number of years and quite frankly can be fixed over a number of years,” said Meyer on ‘Ask Gov. Meyer’.
The state’s Office of Budget and Management holds its initial budget FY 2027 budget hearings starting November 10th, the same week as the planned special session. DEFAC’s next revenue forecast comes on December 15.
That December forecast is the one Gov. Meyer will use to craft his 2027 budget proposal.
The planned Nov.13 special session will be the second one held by the entire General Assembly since it concluded its regular session this year.
Lawmakers convened on August 12 to pass a series of bills to provide relief to residents affected by the recent statewide property reassessment process, specifically in New Castle County.
One of the bills passed was HB 242, allowed New Castle County school districts to enact split-tax rates for residential and non-residential properties to address a post-reassessment shift of tax burden to residential properties. That law was challenged in court by a coalition of landlords and property associations, but was upheld by the Court of Chancery this week.
