NEW CASTLE — The panel that sets Delaware’s official revenue projections bumped up its estimates Monday, but only slightly.
The Delaware Economic and Financial Advisory Council …
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NEW CASTLE — The panel that sets Delaware’s official revenue projections bumped up its estimates Monday, but only slightly.
The Delaware Economic and Financial Advisory Council increased its revenue estimate for the current year by $11.4 million above its June estimate. The change is mostly due to personal income tax refunds being lower than previously expected.
Personal income taxes also played a role in the council’s decision to increase its revenue estimate for next fiscal year by $29.8 million.
The changes do not include adjustments to the panel’s previous estimates that resulted from legislative action in passing this year’s budget. Those adjustments included earmarking money to the general fund that otherwise would have been transferred to the transportation trust fund and to open space and farmland preservation.
The meeting was the panel’s first since lawmakers passed a $3.9 billion spending plan for the current year, which began July 1.
Although this year’s budget is about 2.5 percent higher than last year’s, state officials and lawmakers are bracing themselves for potentially painful decisions in the future, given troubling revenue projections for fiscal 2017.
“I’m looking at cost increases upward of 175 to 180 million dollars,” state budget director Ann Visalli told DEFAC members.
Even with the revenue estimate revisions approved Monday, Visalli said officials still are looking at a budget gap in fiscal 2017 of around $135 million.
“I welcome all ideas,” she said.
State finance secretary Tom Cook said that with Monday’s revisions, general fund revenue for next fiscal year is expected to be less than this year’s total. At the same time, costs for state employees are expected to increase significantly, he noted.
“There’s still an issue here, a structural problem,” Cook said.
A panel formed by Democratic Gov. Jack Markell to explore how to make Delaware’s revenue portfolio less unpredictable and more reflective of economic conditions issued a report with several recommendations in May. But it’s unclear whether lawmakers will have the political will to implement some of the suggestions, which include broadening the personal income tax by eliminating itemized deductions and scaling back tax preferences for senior citizens. The review panel also discussed the feasibility of a statewide property tax but declined to make a recommendation on that issue.
Meanwhile, there’s been little progress in creating a similar review panel to study state expenditures, although DEFAC chairman Joshua Martin III hinted Monday that there may be movement by the Markell administration on that front within the next few days.
While the answers might be complicated, Secretary of State Jeffrey Bullock distilled the fiscal issues facing state officials, lawmakers and their constituents into a simple question: “What do you want government to do, and how do you want to pay for it?”