Amid a post-COVID-19 economic rebound, the State of Delaware is flush with cash and some lawmakers are looking to share this good fortune with taxpayers.
According to the Delaware Economic and Financial Advisory Council (DEFAC) – a nonpartisan group responsible for estimating state revenue -- the amount of money available for appropriation increased by $429.3 million over the last two months. The recent forecast continues a trend. The state's revenue estimate has climbed by more than $953 million since October.
Officials are using a portion of the money to prepare for potential future shortfalls. The state is expected to end this fiscal year with nearly $844 million set aside as a hedge against an unexpected emergency or economic downturn.
The latest projections indicate state revenue is anticipated to remain strong. In Fiscal Year 2019, state revenue was $4.592 billion. In the current fiscal year (FY 2021), which ends June 30, state revenues are expected to be $5.259 billion. Even with the economy expected to slow after the recovery, revenue projections for the next two fiscal years (FY 2022 and 2023) are $5.152 billion and $5.115 billion, respectively.
These figures do not include the $1.025 billion the State of Delaware is receiving in the federal American Rescue Plan Act of 2021.
State Rep. Rich Collins (R-Millsboro) is sponsoring legislation seeking to significantly reduce the burden on Delaware taxpayers. House Bill 191 proposes an across-the-board 10% cut to the state personal income tax; would reduce the corporate income tax by nearly 30%; and slash the gross receipts tax – sometimes referred to as Delaware’s hidden sale tax – by 50%. The bill would allow impacted taxpayers to collectively retain more than $420 million annually.
“This is an economic development bill,” Rep. Collins said. “In recent years, Delaware has had one of the worst economic growth rates in the nation. I believe allowing people and businesses to keep more of their own money will jumpstart investment, increase employment, and raise starting wages. The state will reap the benefits of this too, as better economic performance produces higher revenue.”
HB 191, which currently enjoys only Republican sponsorship, is pending action in the House Revenue & Finance Committee.
