Revenue losses could mean budget cuts, Delaware seeks more leeway from federal government
From The News Journal
Delaware’s state revenue forecast continues to plummet, and officials warn that they could have to make cuts to government programs if they can’t more freely spend the federal aid they received from Congress to fight the pandemic.
The state expects a $784.5 million decline in revenue over the next two fiscal years, based on the latest estimates reported on Monday by the Delaware Economic and Financial Advisory Council.
Much of that money had already been squared away in the governor’s spending plan for next fiscal year, which officials now expect to drastically rework.
The latest forecast could get more or less grim before the state finishes out this fiscal year. Lawmakers, who postponed the legislative session indefinitely in mid-March, have to pass a budget for the next fiscal year by June 30.
The forecast includes a $150 million hole in the budget that officials will have to find a way to fill before the end of this fiscal year, said Office of Management and Budget Director Mike Jackson. The state could dip into its reserves or postpone capital projects that haven’t started yet, he said.
“But if it gets worse, our measures will be stronger,” Jackson said, without offering specifics.
In Pennsylvania, about 9,000 state workers stopped getting paychecks earlier this month after their offices were closed amid the pandemic.
“All options are going to be on the table,” said Jackson, adding that Delaware is in a better financial position than other states because of its reserves. “What they (other states) may employ as a strategy to cope with fiscal challenges, we may not employ.”
When asked about potential pay cuts in Delaware, Carney said during a Tuesday press conference, “Our focus will be on protecting our state employees. … But we’re going to have to take whatever measures are necessary, obviously, to close the gap.”