NEW CASTLE, Del. — A state panel on Monday increased Delaware’s official revenue forecast, but lawmakers still have their work cut out for them in fashioning a budget for the fiscal year starting July 1.
The Delaware Economic and Financial Advisory Council on Monday boosted its revenue estimate for the current year by $12.5 million compared to its May projections. The revenue projection for fiscal 2018, which starts July 1, increased by $13.5 million.
Adding reversions of unspent funds, available revenue for fiscal 2018 increased by $27.4 million. That still leaves a gap of more than $350 million between estimated revenue and proposed spending for next year, according to Democratic Gov. John Carney’s administration.
“It’s a drop in the bucket. … It’s insignificant,” state budget director Mike Jackson said of Monday’s revisions.
Meanwhile, budget talks between Republican and Democratic legislative leaders have bogged down amid disagreements over spending cuts and proposals to increase taxes on Delawareans.
Democratic leaders told the legislature’s budget committee last month to halt its work amid public outcry about proposed spending cuts. It’s unclear whether the committee will resume its work this week.
The House and Senate have approved on a bill increasing taxes on corporations, a key part of Carney’s plan to balance a budget for the fiscal year starting July 1. Analysts say the bill will generate an additional $116 million annually in revenue.
But GOP lawmakers have yet to sign on to a Democratic plan to increase personal income taxes. If passed, the legislation would raise $68 million in additional revenue in the fiscal year starting July 1, and $211 million the following year.
Republicans have said spending reform needs to be part of any budget deal. Their proposals include forming groups to study Medicaid reform and school district consolidation. They also have suggested developing performance metrics for state agencies and taking a more analytical approach to state spending, using factors such as economic growth, inflation and population, rather than just capping spending at 98 percent of expected revenue.