There's just over a month before Delaware's FY 2026 budget is approved and ready to take effect on July 1 and the Joint Finance Committee begins its last two weeks of budget crafting meetings this week. The Governor's proposed $6.8-billion FY 2026 budget is an increase of over 7% over the current $6.1-billion spending plan. Members of the House Republican Caucus say that if the Governor plans to spend the entire $469-million Budget Stabilization Fund - which is set aside to deal with an economic slowdown - which could leave Delaware facing a nearly half-billion dollar budget shortfall - and leaving Delawareans and businesses to pick up the tab with higher taxes and fees. House Republicans are offering some cost-cutting suggestions to reduce spending - including cutting targeted state job vacancies, lengthen by a year the plan to raise the starting salary for public school teachers to $60,000 and reduce the size of the budget increase from 7.4% to 6.4%.
While the JFC meets over the next two weeks, the final Delaware Economic and Financial Advisory Council (DEFAC) revenue review will be released on June 16th. The revenue numbers released by DEFAC in March showed a decrease of about $30-million from the December 2024 review. However there was somewhat better news with the May 19th DEFAC release which showed a $249.8-million revenue increase.
Additional information from the Republican Caucus:
Earlier this spring, Gov. Matt Meyer released his suggested $6.58 billion FY2026 state operating budget that would take effect July 1. The proposal is an increase of about 7.4% over the current $6.1 billion budget.
If enacted in time for the start of the new fiscal year on July 1, state spending would be more than $2 billion higher than it was just five years ago -- an astonishing increase of more than 45%. Worse yet, state spending is expected to outpace revenue growth over the next several years.
During the governor's budget presentation in March, Office of Management and Budget Director Brian Maxwell indicated that the administration plans to spend the entire $469 million Budget Stabilization Fund -- money set aside to deal with an economic slowdown -- and that within two years, the state could face a nearly half-billion-dollar budget shortfall.
"Planning to spend money faster than it comes in is a blueprint for failure," said State House Republican Whip Jeff Spiegelman (R-Clayton, Smyrna, Townsend). "Before we ask working Delawareans and our small business owners to reach deeper into their pockets to pay higher taxes and fees, we have an obligation to reduce the gap we need to fill."
Suggestions to Reduce Spending in the Upcoming Budget:
Joint Finance Committee State Rep. Charles Postles (R-Milford, Frederica) also called for significant downsizing of two bills recently shared with state lawmakers, seeking to raise the cost of numerous fees, licenses, and permits under the control of the Department of Natural Resources and Environmental Control (DNREC) and the Delaware Department of Transportation (DelDOT). The revenue raised through the charges offsets the tax dollars needed to operate each agency
Rep. Postles said while some of the fees have not been increased for many years and are worthy of consideration, lawmakers should not approve either proposal as is. "It took a long time for them to reach this point," Rep. Postles said. "They could have addressed this incrementally over the last five or more years when we were flush with cash. Now, I can't in good conscience call for General Fund spending cuts on one hand while at the same time giving a green light to hikes that will cost citizens and small businesses millions of additional dollars annually."