PROJECTDelaware

State Fiscal Briefs

May 2022

Looking for Delaware data related to the pandemic? We have health, economic, and fiscal data on our new tool, How the COVID-19 Pandemic is Transforming State Budgets.

Delaware’s budget basics

According to the National Association of State Budget Officers (NASBO), Delaware’s total expenditures in fiscal year (FY) 2021 were $13.3 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2021 were $2.7 trillion, ranging from $4.7 billion in Wyoming to $512.8 billion in California.

Each state allocates spending and taxes differently among different levels of governments, and local governments often administer programs with state funds, so combined state and local government data show a more complete picture of individual benefits and contributions when comparing states.

Per the US Census Bureau, Delaware’s combined state and local direct general expenditures were $11.4 billion in FY 2019 (the most recent year census data were available), or $11,721 per capita. (Census data exclude “business-like” activities such as utilities and transfers between state and local governments.) National per capita direct general expenditures were $10,161.

Delaware’s largest spending areas per capita were public welfare ($2,709) and elementary and secondary education ($2,308). The Census Bureau includes most Medicaid spending in public welfare but also allocates some of it to public hospitals. Per capita spending is useful for state comparisons but is an incomplete metric because it doesn’t provide any information about a state’s demographics, policy decisions, administrative procedures, or residents’ choices.

Delaware’s combined state and local general revenues were $11.5 billion in FY 2019, or $11,769 per capita. National per capita general revenues were $10,563. Delaware does not levy a general sales tax but it does have a gross receipts tax (Census counts this revenue as either general sales tax revenue or selective sales tax revenue). After federal transfers, Delaware’s largest sources of per capita revenue were individual income taxes ($1,783) and charges ($1,636), such as state university tuition and highway tolls.

Delaware also has an idiosyncratic source of tax revenue: Delaware is home to nearly 80 percent of all publicly traded companies and over two-thirds of Fortune 500 companies. The state credits its “flexibility in formation” and “customer service” for attracting so many companies, but many firms locate there in large part because of its relatively lax business laws and its exemption of intangible income from tax. However, Delaware collects a corporate income tax and license fees from its corporations. As a result, this small state has the seventh-highest per capita corporate income tax revenue ($304 compared with the national average of $200) and far and away the highest per capita revenue from corporate license fees (Delaware collected $1,598 in 2019 while the next-highest state was $151 and national average was $21.) Corporate license fees accounted for 13.6 percent of Delaware’s state and local general revenue in 2019; the national average was 0.2 percent.

Delaware’s politics

Governor John Carney Jr., a Democrat, was elected in 2020 with 59 percent of the vote. The next gubernatorial election is in 2024.

Democrats control both the House of Representatives (26 Democrats to 15 Republicans) and Senate (14 Democrats to 7 Republicans), with veto-proof majorities in both houses. Control of the governor’s mansion and each house of the legislature gives Democrats a trifecta in Delaware. All Delaware House seats are on the ballot in 2022 because representatives serve two-year terms. Senators serve a combination of two- and four-year terms during each decade’s legislative district apportionment cycle. This 2-4-4 term system ensures all Senate seats are up for election after new legislative district boundaries are drawn. All senators are therefore up for election in 2022.

Delaware’s budget institutions, rules, and constraints

Delaware uses an annual budget. The legislature must pass a balanced budget, but it can carry a deficit into the following year. Delaware limits both spending and revenue growth with binding rules that require a legislative supermajority or a popular vote to override. A supermajority is also required for any legislation that increases taxes or revenues. Delaware also places limits on the total authorized debt and debt service the state can incur.

(Note: Some states have informal budget institutions that constrain overall spending growth or a specific expenditure’s growth.)

Delaware’s current budget

Governor Carney released his FY 2023 budget proposal and gave his state of the state address in January 2022.

Delaware enacted its FY 2022 budget in June 2021. The enacted budget included $4.77 billion in the operating budget..

Under the American Rescue Plan, Delaware will receive $925 million in direct state fiscal aid and $253 million in local government aid from the federal government. As of January 2022, Delaware had spent part of its state ARP funds on public health programs, education spending, and housing assistance.

According to NASBO, Delaware’s recent expenditure totals (general fund spending/total spending, including federal transfers) were:

  • FY 2021: $4.5 billion/$13.3 billion

  • FY 2020: $4.5 billion/$11.9 billion

  • FY 2019: $4.4 billion/$11.3 billion

For more on Delaware’s budget, see