Senate & House Republicans React to Troubling Revenue Projections, Governor’s Response

FROM THE SENATE REPUBLICAN CAUCUS

The Delaware State Senate Republican Caucus released the following statement reacting to the latest Delaware Economic Financial Advisory Council (DEFAC) projections and Governor Meyer’s response.

“Governor Matt Meyer’s recent press release on the latest DEFAC forecast blaming the federal government for Delaware’s budget shortfall is a political distraction from years of failed policy.

“The DEFAC report does show a $220 million drop in corporate tax revenue caused by a new federal law that lets businesses immediately write off their research and equipment costs. However, this change encourages investment, job creation, and drives innovation. It’s a course correction by the federal government that will put more Americans to work, expand opportunity for young families, and strengthen our economy.

“What’s hurting Delaware isn’t federal reform, it’s runaway spending and misguided state policy. As much as Democrats like to demonize tax cuts for businesses, they forget that every paycheck begins with someone taking a risk to start or grow a business. When government tries to provide everything, it replaces opportunity with dependency. Real progress doesn’t come from bureaucracy, it comes from empowering people to work, create, and build a better life for their families.

“The General Assembly approved a $6.58 billion budget for FY 2026, an increase of 7.4 percent in a single year, even as families face skyrocketing costs for housing, health care, and electricity. State environmental mandates have driven up energy prices and years of overregulation have choked job growth.

“The result is clear: young people can’t afford a home, homelessness is rising, and the middle class is shrinking. Delaware has spent years making life harder for working families, and now it’s time to change direction.

“Washington D.C. just did what Delaware won’t do: reward work, investment, and innovation. If we truly care about the next generation, we’ll stop taxing and regulating them out of their future.”

FROM THE HOUSE REPUBLICAN CAUCUS

The Delaware Economic & Financial Advisory Council (DEFAC) met earlier this week to update revenue and spending projections for the current and future fiscal years.

The revenue estimates, made periodically throughout the year, dropped significantly in the October report compared with the last estimate made in June.

The forecasts are key to crafting the state's annual operating budget because officials are mandated to spend no more than 98% of expected incoming funds.

The following is a statement issued by the House Republican Caucus in reaction to the DEFAC report:

Delaware's revenue projections may be down, but our spending continues to be way up. And, that’s the real problem Delaware faces!

Compared to the June projections, DEFAC reports that state revenues are projected to drop by $150 million for this year and next, largely due to lower corporate income tax collections tied to federal tax changes.

Under these new federal changes, corporations can retroactively adjust past tax filings, going back as far as Tax Year 2022. That means many large companies can now file amended returns and claim refunds from the state on taxes they already paid. This is good for Delaware’s economy because it allows companies to reinvest in their facilities and workforce, encouraging job growth and retention.  

Here’s the bigger problem, though: Over the past three years, Delaware’s state budget has grown by $1.48 billion — a 29% increase. Compared to ten years ago, it’s up $2.67 billion — about 68%!

It’s time to have an honest conversation about Delaware's fiscal responsibility and sustainability.