Meyer unveils FY 2027 budget

Gov. Matt Meyer’s second recommended budget seeks to prioritize kids, housing, healthcare and the workforce.

Released Jan. 29, the Fiscal Year 2027 budget holds operating costs to an increase of 4.99%, a marked decrease from the increases of more than 7% last year and more than 9% the year before, with a little more than 5% in revenue.

“We believe not in budgeting and cutting with a chainsaw, but making intelligent decisions and creating efficiencies with a scalpel, looking at budgeted items where we can reduce the expenditure without any meaningful reduction in service levels to Delawareans,” Meyer said.

Early childhood care is set to receive a $50 million investment, with half of it going to purchase-of-care subsidies for low-income families to pay for childcare. The remainder is mostly split between student unit growth and literacy programs. 

About $2 million is earmarked for the state’s new education funding system, which would change the funding formula that has been used since the 1940s. 

“We know that there’s going to be work that we need to do, and it’s pretty complex to make sure families across our state are aware of the decisions we’re making,” Meyer said.

Educators will again get raises, Meyer said – the third of a four-year initiative to bring starting salaries for teachers close to $60,000 per year. All state employees are expected to get a 2% raise under the budget proposal.

About $157 million will be earmarked for school construction and renovation projects.

Millions will continue to go into housing, with $19 million for the housing development fund and money to enhance mortgage assistance opportunities.

For healthcare, Medicaid tops costs at $139 million; $34.2 million for correction system medical and pharmacy contracts; and $10 million for SNAP benefits.

Office of Management and Budget Director Brian Maxwell talked about the cost drivers that were addressed to get rid of a nearly $525 million deficit.

He said they worked with state agencies on reducing and reallocating costs for more than $238 million in combined savings. Another $168.7 million were saved in one-time reductions and cash to the bond bill, which pays for capital projects.

“These four different solutions provided resources of $554.4 million, leaving us the ability to make strategic investments to move the state forward in a direction that supports the governor’s priorities to the tune of $42.8 million,” Maxwell said.

More revenue, about $81 million, is expected from modernizing business formation fees; $60 million through the process in which the state takes over uncashed checks or other monetary goods from businesses; and about $19 million in revenue is expected for tax increases on cigarettes, and vape and moist snuff products.

The proposed operating budget is $6.938 billion, which includes $29 million in one-time expenses. Another $934.4 million is proposed for the bond bill, and $85.5 million for grants in aid.