By PATRICK JACKSON
The News Journal
04/18/2006
State financial experts say Delaware will have a little more money to work with in the budget year that starts July 1.
The Delaware Economic and Financial Advisory Council said money coming in during the final three months of this fiscal year, and for the budget year that starts July 1, will be $47.6 million more than the panel predicted in March.
Almost all of that extra money will be available for the next budget, which should make life easier for lawmakers pulling together a spending plan five months before an election.
The council said the state should bring in $3.12 billion in this budget year, up about $24.5 million from the March estimate. The 2007 budget should have $3.2 billion to play with, up about $23.1 million from March.
The council is made up of government officials and economic experts from the private sector and academia. Its revenue estimate must be used in setting the state budget.
Council members, meeting at the Buena Vista state conference center near New Castle, said they were pleased because some of the upward trend comes from rising personal income tax receipts, a sign of a healthy economy -- even after accounting for losses resulting from MBNA's acquisition by Bank of America.
The council's next estimate -- in May -- will provide a better reading on the economy because it will be based on firmer figures for personal income tax collections.
"This is really a tracking month," said Deputy Finance Secretary Tom Cook. "But the good news is that the numbers are tracking up with everything that's going on."
Cook said the biggest revenue growth is projected for collections of abandoned financial assets, such as stocks, insurance policies and bank accounts. That estimate rose by about $20 million, evenly split over the two budget years.
Changes in lottery laws that allowed casinos to install more machines and stay open longer -- not to mention a couple of huge Powerball jackpots -- are paying dividends as well.
However, he said, the state is keeping an eye on slots, which account for about 95 percent of lottery revenues.
"The video lottery numbers dipped a little bit the last time gas prices spiked," he said. "So while we're pleased with the increases, we're keeping an eye on it."
"The numbers are good because they show the economy is growing at a solid, steady pace," said Treasurer Jack Markell. "But they also tell us we need to be careful about building money into [the permanent] budget."
Robert "Bert" Scoglietti, the Office of Management and Budget's director of policy and external affairs, said the extra money will come in handy.
"The governor has said she wants to work on areas including state employee salary issues, debt reduction, more support for the Department of Transportation, energy and economic development," Scoglietti said. "This gives us some room to work."
Former Rep. Richard Davis said the new money will help, but echoed Markell's concerns.
"The budget's stretched pretty tight," said Davis, a former Joint Finance Committee co-chairman. "It will make for interesting discussions, especially as they look at paying for things like full-day kindergarten."
Contact Patrick Jackson at 678-4274 or pjackson@delawareonline.com.
