Legislative leadership supports codifying budget advisory group

A bill to codify Delaware’s financial advisory council, which provides budget advice to those crafting the state budget, was filed April 9 with bipartisan support in the General Assembly.

Since 1977, the Delaware Economic and Financial Advisory Council has existed through an executive order first signed by Gov. Pete du Pont, who tasked the council with advising the governor and legislature on state finances, and providing economic predictions for future budgets.

Senate Minority Whip Brian Pettyjohn, R-Georgetown, said codifying DEFAC has been discussed in the past, but never acted upon. “It’s something that should’ve happened already,” he said.

House Bill 370, sponsored by House Majority Leader Rep. Kerri Evelyn Harris, D-Dover, with support from Pettyjohn and other bipartisan leaders, copies the executive order originally signed by du Pont. The bill is named the DuPont-Cook Financial Responsibility Act in honor of the late du Pont and Sen. Nancy Cook, who recently passed away, for their years of work to protect state finances.

“We didn’t put anything in there that is not in the executive order,” Pettyjohn said. “The governor can still remove anyone at will, who he appoints ... It's not only a signal to people that the executive branch wants to make sure our revenues are in line with reality, but it’s important to the legislative branch as well.” 

Pettyjohn declined to comment on the recent removal by Gov. Matt Meyer of DEFAC member Michael Houghton. Meyer has since replaced Houghton with Brenda Wise.

Houghton’s removal came after he and others questioned flat numbers for Delaware’s franchise tax revenue, an amount that would show whether companies have fled the state following Chancery Court decisions that many say are unfriendly to business. 

Franchise tax revenue has been flat since DEFAC’s October report.

Pettyjohn, a DEFAC member, said there is usually some movement in the franchise tax category, although most of the biggest moves traditionally come in May and June.

“I had very similar concerns as Mike Houghton when he raised those concerns. One of the things I expect is a better picture of the corporate franchise fees during the next DEFAC [meeting],” he said.

By the May DEFAC meeting, Pettyjohn said they should have numbers to reflect Delaware’s corporate health. Historically, about $2 billion in corporate revenue, representing a third of the state budget, has been used to balance it. 

The bill awaits action in the House Administration Committee.

Bipartisan leadership support

Leadership across the aisles in both chambers issued a joint statement April 9 in support of codifying the Delaware Economic and Financial Advisory Council into state law.

In the statement, Pettyjohn and Senate Minority Leader Gerald Hocker, R-Ocean View, joined Senate President Pro Tempore Dave Sokola, Senate Majority Leader Bryan Townsend, Senate Majority Whip Elizabeth “Tizzy” Lockman, House Speaker Melissa Minor-Brown, House Majority Leader Kerri Evelyn-Harris, House Majority Whip Ed Osienski, House Minority Leader Tim Dukes, and House Minority Whip Jeffrey Spiegelman in saying:

“Gov. Pete du Pont and Sen. Nancy Cook helped establish a culture of responsible budgeting that continues to guide our state. Their leadership on balanced budgets and long-term financial planning set a standard that remains central to Delaware’s approach to governance.

“A central piece of that legacy is the Delaware Economic and Financial Advisory Council, or DEFAC. Established to strengthen the state’s fiscal management, DEFAC delivers nonpartisan, objective revenue and expenditure projections to both the governor and the General Assembly. For nearly five decades, it has played a critical role in supporting balanced budgets, informing policy decisions, and upholding Delaware’s reputation for fiscal discipline.

“While DEFAC has historically operated under executive order, there has been broad agreement that it should be codified to safeguard its role within Delaware’s fiscal framework, an approach rooted in the fiscally disciplined foundation advanced by Gov. du Pont and strengthened over time by leaders like Sen. Cook. Through this bipartisan effort, we carry forward the legacy of Sen. Cook and Gov. du Pont, ensuring the principles they championed continue to guide Delaware’s future.

“That is why today, leadership of all four caucuses in the Delaware General Assembly will be introducing the ‘DuPont-Cook Financial Responsibility Act,’ a bipartisan effort honoring the lasting impact of Gov. Pete du Pont and Sen. Nancy Cook on Delaware’s fiscal discipline and commitment to transparent, responsible budgeting.”