energy prices and health-care costs not
withstanding, the panel charged with monitoring the
Delaware economy to guide state government spending
remains bullish on the outlook for the coming fiscal
The Delaware Economic &
Financial Advisory Council will forecast nearly 4% growth in
state revenue in the year which beginning July 1. That is
less than half the 8.7% growth rate expected in the current
year. But adjusting for legislative and accounting changes
the narrows the gap to 6.3%, compared to 10% in fiscal 2006
over fiscal 2005.
State revenue is considered
the best available measure of the local economy.
At its meeting on May 15, the
council will increase its projection for current-year
revenue by $31.9 million over what it said a month earlier
was likely. The fiscal 2007 forecast -- on which the state
budget is required by law to be based -- will be upped by
$81 million from what it was in April.
State government income will
breeze by the $3 billion mark this year, netting an
estimated $3,127.8 million compared to $2,877.6 million in
actual receipts a year ago. That is now expected to grow to
$3,200.6 million in fiscal 2007.
In setting its forecast for
next year at a meeting on May 12, the council's
revenue-estimating committee added $21.8 million to what the
Department of Finance recommended. The additions were spread
over several revenue categories.
"The economy is predicted to
slow down, but not like this," Kenneth Lewis, chairman of
the committee, said with reference to the department's
recommendation. "There are a lot of bright spots in the
Committee member Lindsey
Davis said she sees nothing on the horizon that "could make
the growth we've seen turn around and go down." She added
that she is looking for "three, four or even five more good
Although there has been a
slackening of activity in the real estate market, committee
member Andy Lubin said that "prices are holding." He said he
anticipates "a dynamic effect" from the providing of
sanitary sewer service to part of southern New Castle County
David Gregor, the finance
department's liaison with the committee, said the impact of
the acquisition of M.B.N.A. Bank by Bank of America
apparently will be significantly less severe than previously
Personal income tax continues
to be the principal driver in the growth of state revenue.
Tax receipts, net of refunds, this fiscal year will exceed
$1 billion for the first time, increasing 15.7% over fiscal
2005. Gregor said deadline-day receipts this year were 20%
higher than a year ago.