The Delaware Economic and Financial Advisory Council (DEFAC) offers its initial look at the state’s financial health for the 2028 budget cycle.
The October forecast is the first of the new budget cycle, updating Delaware’s financial outlook from DEFFAC’s last meeting in June.
The new revenue estimates generally reflect a rosier economic outlook than initially expected during DEFAC’s last meeting in June.
It bumps up estimated revenue for the state for both fiscal year 2027 and 2028. For FY 27, it adds $188.3 million, bringing estimated revenue up to just over $7.46 billion. That's a 2.6% increase from June,. For FY 28, $363.1 million is added. That’s a 4.9% increase.
The revenue bump increases the opening state spending limit for next year by to $7.9 billion, an increase of $436.5 million from this year’s planned spending.
But David Roose, Delaware's Director of Research and Tax Policy Analysis says there is some potential for volatility.
"Lots of things can happen geopolitically: elections coming up, all kinds of risks," he said."It may be of similar magnitudes that we've been dealing with since the pandemic. It's only a forecast."
The revenue boosts are driven in large part by two specific areas– personal income tax and corporate income tax.
Roose says the reason for the $85.8 million increase in corporate income tax revenue for the current fiscal year is not yet clear. It could be related to recent revisions in federal tax policy– which the state decoupled from in 2025.
Roose also notes revenue from personal income tax increased faster than expected. In June, the state expected a lull in the economy to lower money withheld from Delawarean’s paychecks. Instead, the state’s October revision added $88.8 million in personal income tax for FY27’s estimate and another $85 million for FY28.
The state’s Office of Management and Budget holds its FY28 budget hearings next month.
