- Associated Press - Monday, June 20, 2016

NEW CASTLE, Del. (AP) - The panel that issues Delaware’s official revenue projections is reporting another dip in this year’s estimate, making life a little more difficult for lawmakers working on budget bills for the fiscal year starting July 1.

The Delaware Economic and Financial Advisory Council on Monday lowered its revenue estimate for fiscal 2016, which ends June 30, by $21.6 million compared with its May estimate. The panel also reduced its revenue estimate for fiscal 2017 by about $1 million.

With the revision, revenue for this year is expected to be less than the amount collected in 2015.

The updated forecast means roughly $41.6 million in revenue remains available for legislators to appropriate for capital needs and community grants in fiscal 2017. That’s about $32.7 million less than the $74.3 million recommended by Democratic Gov. Jack Markell.

Markell has recommended that $31.3 million in general fund cash be directed to the capital budget for roads and other construction projects in the upcoming year. He also has proposed a grant-in-aid budget of $43 million in earmarks for volunteer fire companies, community agencies and charitable organizations.

The Joint Finance Committee, which already has signed off on a $4 billion operating budget for fiscal 2017, must determine how much money goes into the grants bill, with any remaining funds going to the capital budget.

The capital budget committee is scheduled to meet Tuesday morning before the afternoon legislative session.

In addition to revenue being slightly down this year, the extended revenue forecast projects virtually no revenue growth between 2017 and 2018.

“The ball’s going to be in the General Assembly’s court as to how they’re going to react to the revenue picture and the expenditure picture that’s being presented,” said Markell’s budget director, Brian Maxwell.

Monday’s downward revision in this year’s revenue forecast is primarily due to a $29.5 million drop in estimated corporate income tax revenue, with analysts expecting some of the weakest quarterly payments in more than a decade.

“That’s not to say this is the harbinger of a recession,” said Deputy Finance Director David Gregor, acknowledging that the numbers suggest that some of the largest corporate income tax payers are not confident in the strength of the economy.

Last month, DEFAC lowered its revenue projections for the current and upcoming fiscal years by about $18 million each compared with April’s estimates. That followed previous downward revisions in March and April totaling $9.5 million for fiscal 2017.

But officials note that, even with the recent downward revisions, the total amount of funds available for appropriation in 2017 is still more than $100 million higher than last September’s estimate.

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