Panel updates Delaware government revenue estimates

NEW CASTLE — Delaware’s official government revenue forecast has inched up as state officials begin laying the groundwork for developing a budget proposal for next year.

The Delaware Economic and Financial Advisory Council on Monday boosted the revenue estimate for this year by $27.4 million compared to its previous estimate in June. The panel increased its forecast for next year, fiscal 2020, by $12.2 million.

Coupled with changes to laws governing casinos and real estate transfers that were approved by the General Assembly earlier this year, the revenue forecasts have increased by $43.3 million and $34.4 million, respectively, compared to the revenue resolution used by lawmakers in approving this year’s $4.3 billion operating budget in late June.

“It continues to reflect the strength of Delaware’s economy,” state budget director Michael Jackson said of the updated forecast.

“Going forward, we’ll continue to plan prudently for budget sustainability.”

Jackson said agency budget requests for next fiscal year are due by Oct. 15, followed by public hearings starting in early November. Democratic Gov. John Carney will then present his budget proposal in late January.

Growth in next year’s budget is not expected to match the whopping 9.2 percent increase this year, which is more than double the five-year average growth rate of 3.46 percent.

Administration officials note that much of this year’s increase reflects spending on one-time items with excess cash.

The biggest change in this year’s revenue estimate was a $29 million bump in abandoned property collections, which also increased by $10 million for next year. This year’s total for abandoned property revenue is expected to meet or exceed the statutory cap of $554 million. Under state law, any funds exceeding the cap must be set aside for school construction, debt service or future obligations for government retirees.

Brenda Mayrack, director of the Office of Unclaimed Property, said the increased estimate is based on the amount of abandoned property cases that officials expect to resolve this year through enforcement actions and voluntary disclosure agreements by businesses.

“At this point, we’re comfortable taking the fiscal ‘19 number to the statutory cap,” Mayrack said.

Meanwhile, projections for lottery revenue are down for both this year and next year, despite the successful launch of legal sports betting.

The decrease is largely attributable to a tax cut for Delaware’s three casinos, which are struggling amid increased competition from neighboring states, that lawmakers in approved in late June. The revenue loss from the tax cuts more than offset the boost provided by legalized sports gambling.

“The sports lottery has down extremely well so far this year,” noted David Roose, research director for the Department of Finance.

 

Randall Chase writes for the Associated Press

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