Delaware revenue estimates take another hit

792

The revenue expected to be available to state budget writers took a major hit Monday, dropping by more than $655 million in Delaware.

The Delaware Economic and Financial Advisory Council (DEFAC) issued their latest forecast Monday afternoon. The group predicted the state would have $4.2149 billion available to be budgeted for Fiscal Year 2021, that begins July 1st.

It is the second month in a row state revenue estimates have dropped. The appropriations limit disclosed today is $655.4 million less than it was in March, when the DEFAC forecast a $93.3 million revenue drop.

In January, before the coronavirus (COVID-19) economic disruption hit, Governor John Carney presented his official state operating budget of $4.63 billion. The latest estimates fell about $415 million short of being able to finance that proposal.

The state budget will be in flux over the next two months as revenue is expected to continue a downward trend.

Two more state revenue forecasts will be issued — one in May and one in June — before the start of the new fiscal year. Under current law, Delaware’s operating budget cannot appropriate any more than 98-percent of predicted revenue.

More than 60% of Delaware’s state spending supports operations that are challenging to cut: public education, social services, and Medicaid.

Delaware will be receiving $1.25 billion from the federal government through the recently enacted CARES Act, but that money is largely restricted to COVID-19 response efforts.