Delaware’s Economic Forecast Requires New Government Spending Controls
Recession woes are hitting state governments hard. Delaware is no exception.
Governor Ruth Ann Minner met with the Delaware Economic Forecast Advisory Council yesterday and determined that new spending controls were necessary.
“Unfortunately, we must take immediate action to reduce state spending in light of the continually deteriorating economic forecast,” Gov. Minner said. “We have had a number of management controls in place since the beginning of the fiscal year. We will make these even more restrictive to ensure that we continue to balance the budget. Unfortunately, even with our best efforts, this is a problem that will not be resolved for several months.”
Gov. Minner has requested that state agencies submit a 7 percent cut in their budgets for the current fiscal year, as well as cuts of up to 15 percent for the upcoming fiscal year. No mid-year budget cuts are being requested of public or higher education. Additionally, a statewide hiring free has been re-instituted. The hiring freeze does not include the legislature, judiciary, higher education or local school districts, nor does it pertain to previously approved positions in health and safety or 24-hour institutional settings or employees who are eligible for return to merit rights, as well as critical transition hires.
So just how bad is Delaware’s Economic Forecast?
Delaware’s projected revenues for the current fiscal year have fallen by $151.7 million and Fiscal 2010 revenues have been cut by $303.7 million.
DEFAC reduced projected revenues in nearly every major revenue category, including personal income taxes, corporate income taxes, corporate franchise taxes, bank franchise taxes and realty transfer taxes. Combined with the September DEFAC results, estimates since July have fallen $190.6 million for the current fiscal year and $395 million for the upcoming fiscal year.
Most Recent Forecasts (September 2008):
DEFAC will meet again on Dec. 15. Estimates from that meeting will be the basis for Gov. Minner’s recommended operating and capital budgets released in January.
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