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May 25, 2021 In In The News

With so much federal stimulus cash, state predicts surplus of $1 billion

From: Delaware Live

A state council that forecasts Delaware’s state budgets is predicting there will be a surplus of more than $1 billion in 2022.

It’s a stunning rise from the $669 million predicted in December, which was already surprising against the backdrop of the COVID-19 pandemic.

Members of the Delaware Economic and Financial Advisory Council’s expenditures and revenues committees heard Monday that jump came about largely because of the amount of federal stimulus money coming in, particularly checks sent to residents.

The full committee is voting on their recommendations Monday afternoon.

Withholdings from personal income tax has risen 16.4%, said David Roose, director of Research & Tax Policy for the state Department of Finance.  The sharp increase is partly because the numbers are being compared with last year, when so many people lost jobs and withholdings fell.

Net corporate income tax in April, covering the first quarter, is one of the four best Aprils in the last 25 years, Roose said. Some of the higher industries were healthcare, finance and home building.

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The state has also seen an increase of nearly $16 million in franchise tax, a 50% rise in transfer tax — a state record, and rises in general receipt taxes from retailers, general wholesalers and services as the economy has started to improve.

Amid the amazement at the rapid transformation of Delaware’s financial fortunes was worry about what happens next.

Read more:: https://delawarelive.com/with-so-much-federal-stimulus-cash-state-predicts-surplus-of-1-billion-in-2022-2/