Delaware revenue forecast mostly unchanged
NEW CASTLE, Del. (AP) — Delaware’s revenue forecast for the current fiscal year is down by about $38 million, but the decline is mostly offset by a corresponding increase in the upcoming fiscal year because of an accounting change involving abandoned property.
The net result of Monday’s revisions by the Delaware Economic and Financial Advisory Council is that lawmakers currently are looking at about $4 million less to work with, compared with September, as they consider Gov. Jack Markell’s proposed $4.1 billion budget for 2017, which starts July 1.
The council increased its corporate income tax estimate for this year by $15 million compared with its September projections, which officials said was the result of a multiyear corporate audit. The increase was more than offset, however, by an expected $25 million corporate income tax refund. For privacy reasons, state finance Secretary Tom Cook declined to say whether the changes involved the same company.
Meanwhile, Cook said $40 million the state is expecting from abandoned property audits has been stricken from this year’s projections and pushed into fiscal 2017.
“We don’t see that money coming in by June 30,” he said.
On the plus side, current-year revenue estimates from bank franchise and gross receipts taxes, as well as the lottery, have increased by a total of $10.4 million since September.
DEFAC revenue subcommittee chairman Ken Lewis indicated that a $4.5 million decline in estimated personal income tax revenue for next year was related at least in part to lower corporate bonuses. But Cook refused to say whether the decline was attributed to changes at the DuPont Co., which has cut hundreds of jobs in recent months and announced a planned merger with Dow Chemical.
The latest estimates for next year do take into account recent legislation passed by the General Assembly and signed by Markell to provide post-merger tax breaks for DuPont and establish a more corporate-friendly environment in Delaware.
One bill, which revises the corporate income tax system to eliminate disincentives for multistate firms to hire workers and invest in property in the state, is expected to cost the state more than $48 million over the next three fiscal years, including $8.2 million next year.
That legislation, along with a separate bill offering millions of dollars in tax incentives specifically aimed at DuPont, is expected to result in a $21 million decline in corporate income tax revenue in fiscal 2018.