By PATRICK JACKSON
Dover Bureau reporter
9/15/2003
Delaware’s revenues will be about $228 million higher than June estimates, but the increase probably will not allow for employee raises or other spending increases, state officials said today.
That’s because state officials had built most of the money into the budget adopted in late June, and revenue estimates still indicate the economy is struggling.
“The message is that there are still problems in the economy and that the recovery is still moving slowly,” said Gregory Patterson, a spokesman for Gov. Ruth Ann Minner, who was not available today. “This is not a time to start trying to figure out how to spend large new sums of money.”
The new estimates came this afternoon from the Delaware Economic and Financial Advisory Council, a group of academic, government and business experts who develop revenue estimates the state must use in budgeting.
The council estimated that the 2004 budget, which took effect July 1, will bring in $228 million more than the council estimated in June, when it last met. The panel also increased its forecast for next year’s budget by $235 million.
The main reason for the increased estimates was the inclusion of $144 million expected from higher taxes approved by the General Assembly in June after the economic advisory panel meeting. Extra money from higher cigarette taxes and corporate franchise fees were not included in the council’s June estimate.
The council also did not include about $24 million that the state will get because the franchise fee increase was retroactive to Jan. 1. In effect, the state will receive 18 months worth of the higher fee in the current budget year.
Today’s estimate also was higher because of a different method of calculating how much the state will get from abandoned property such as bank accounts or stock certificates that are not claimed and become state property.
In June, the advisory council asked the state Finance Department to develop a new forecasting formula to reflect the steady rise in abandoned property revenue in recent years that resulted from more aggressive auditing. The new formula increased the abandoned property estimate by $62 million this year and $92 million in 2005.
But not all the news in the council’s report is good.
Patterson said the council lowered this year’s corporate franchise tax estimates by $15.4 million because of weak September collections, and dropped insurance tax estimates by $4.5 million. It increased personal income tax projections by $3.4 million.
See complete coverage Tuesday in the News Journal or at www.delawareonline.com.
Reach Patrick Jackson at 678-4274 or pjackson@delawareonline.com.
