Panel bumps up state government revenue estimate

NEW CASTLE — Delaware’s official government revenue forecast inched up slightly Monday as state lawmakers consider a proposed $4.4 billion operating budget for next year.

The Delaware Economic and Financial Advisory Council boosted the revenue estimate for this year by $19.6 million compared to its previous estimate in December, to just under $4.49 billion.

The panel increased its forecast for next year by $4.8 million, to just under $4.57 billion.

Taking into account a slight decrease in expected expenditures for this year, resources available for fiscal 2020, which starts July 1, have grown by about $28.8 million since Gov. John Carney unveiled his budget proposal in January.

Combined with previous revisions, revenue projections for this year have increased by $121.6 million since last June, when lawmakers approved this year’s budget. Revenue estimates for fiscal 2020 have increased by about $51 million over the same period.

“We’re collecting more in revenue than what we were anticipating, but it’s not necessarily an underlying indicator of growth in our overall economy,” said state budget director Michael Jackson.

Officials say it’s still too early to gauge the impact on state revenues of the Trump administration’s 2017 tax reform law.

The state panel on Monday lowered projections for personal income tax collections this year by $24.9 million compared to its December estimate, but it also lowered estimated refunds by $19 million, for a net decrease of $5.9 million.

Similarly, estimated collections and refunds for fiscal 2020 dropped by $26 million and $19.9 million, respectively, for a net decrease of $6.1 million.

“We’re getting in returns, but we’re not getting in the major returns,” said state finance secretary Rick Geisenberger.

“I think some people are finding that they owe money to the federal government, so they’re going to wait, probably, to file their Delaware return until the end of April,” Geisenberger added. “In many cases, those people will choose to file an extension as they still work through the impact of the federal reforms, so we may not see those extension filings until October.”

While personal income tax estimates dropped slightly, the council boosted this year’s projections for corporate franchise tax revenue by $20 million.

Bank franchise and insurance tax estimates also ticked up slightly since December, mostly offsettinga $10 million increase in refunds of abandoned property.

For fiscal 2020, corporate franchise tax estimates increased by $9 million over December’s projections, while estimated corporate income tax revenue dropped by $13 million.

 

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