BEAR —Delaware’s independent panel of fiscal advisors slightly adjusted its projections on Monday, adding $57.4 million to the budget appropriation limit in the final meeting before legislators vote on the Fiscal Year 2025 budget.
It’s a $2.4 million increase from their earlier projections made at its last meeting in May.
The final report from the Delaware Economic and Financial Advisory Council (DEFAC), a non-partisan group of business and community leaders, academics and government professionals that sets the state’s official revenue estimates, raised the spending limit to more than $6.88 billion.
That’s more than $391 million more than Gov. John Carney’s proposed budget.
With weeks to go before the close of Fiscal Year 2025, fiscal analysts are predicting that the state will end with a surplus of $573.5 million to transition into next year’s budget.
Carney’s proposed spending plan includes a $6.1 billion operating budget as well as $944 million in bond-funded and multi-year capital improvement projects. The proposed budget also includes $66.5 million in grants-in-aid assistance.
However, the governor also set aside $200 million to address health care inflation, as well as $93.9 million to take on the state group health insurance plan shortfall. Another $56.1 million is set aside for one-time spending to OPEB liabilities.
Looking to the future, DEFAC members noted that the expenses like pensions, health care costs and salaries would continue to rise. Salaries for state employees rose 4.8% in the last five years, benefits rose 4.86%. Health care costs rose in the last year by 20.2%
“We’ve been laser focused on getting the message to the General Assembly that we’re outspending our revenue,” Office of Management and Budget Director Cerron Cade told the panel. “We have to address salaries and there’s a lot of competition out there. But we need to fill positions. We need to be able to share health care costs and keep up with the marketplace and I think everybody is clearly understanding it.”
Other complicating matters that the analysts are tracking include $15 million in unclaimed property refunds, as well as $8.2 million reduction in insurance taxes and a projected bump in lottery proceeds. Live Dealing through Bet Rivers launched recently, which generated $6 million in four days.
