NEW CASTLE, Delaware — The panel that sets Delaware's official financial projections increased its revenue estimates by about $20 million Monday, giving budget writers in the General Assembly a little more money with which to work.
The Delaware Economic and Financial Advisory Council boosted its revenue estimate for the current fiscal year to $3.71 billion, an increase of $15.4 million due primarily to a $12 million jump in estimated corporate income taxes.
While personal income tax withholding for the year was off by $6 million compared to April's estimate, refunds were $10 million less than previously expected, resulting in a net gain of $4 million. The panel knocked off $1 million from its previous $237.8 million estimate for gambling and lottery revenue, which is down 12 percent compared to last year.
For fiscal year 2014, which starts July 1, the council increased its revenue estimate by about $5 million to $3.73 billion, also due largely to corporate income taxes.
"Corporate profits are up, there's no doubt about it, and that's reflected in our numbers," said state finance secretary Tom Cook.
Officials are expecting corporate income tax revenue of $200 million this year, an increase of 68 percent over last year, as the economy continues to slowly recover. But that is still less than the $237 million in estimated gambling revenue, and not even half of the $566 million the state expects to take in from abandoned property this year.
Because of Delaware's status as corporate headquarters for thousands of companies, abandoned property such as stocks and bonds, uncashed checks and unclaimed dividends is an important revenue source. State finance officials currently are preparing to sell $150 million in unclaimed stock after trying unsuccessfully to find the owners, Cook noted.
Members of the legislature's budget writing committee will use the updated revenue figures as they begin marking up Gov. Jack Markell's proposed budget for fiscal 2014. The Joint Finance Committee begins its markup process Tuesday. Last month, the DEFAC panel officially adopted a series of tax increases on which Markell based his spending plan.
Looking farther down the road, members of DEFAC agreed to trim $5 million from the unofficial gambling revenue estimate for fiscal 2015. The move, which could be followed by another $5 million decrease at DEFAC's September meeting, came after a discussion of gambling revenue led by William Fasy, chief operating officer for Delaware Park.
"Basically, it's the competition," Cook told fellow DEFAC members, pointing to new gambling venues in Maryland and Pennsylvania. "... By the time you get to '15, the competition, I think, is really going to hit hard."
Secretary of State Jeff Bullock said he was not comfortable with representatives of Delaware's three casinos, who constantly bemoan their financial situation and the amount of money they have to share with the state, making DEFAC's forecasts for gambling revenue.
Ken Lewis, head of the panel's revenue subcommittee, echoed Bullock's thoughts.
"The subcommittee is aware of your point and has the same reservations," he said.