What leaders say about the Budget (and why it’s more important than ever)

This year’s Delaware state budget carries far greater urgency than your typical budget cycle. State leaders are confronting an immediate and unprecedented $400 million revenue loss, driven largely by recent federal tax changes and declining revenue. That means tougher choices – tradeoffs that require critical decisions, with real consequences for people in Delaware. 

Because the stakes are so high, Delaware LIVE and SpotLight Delaware are launching a new explanatory series, Civics 101, to help readers better understand how the state budget works – and why it is the most powerful policy tool the state has.

As leaders across government confront this moment, there is broad agreement on a central point: The budget is more than a financial ledger, it’s the primary mechanism for setting policy and asserting priorities. 

Here are what some of the state’s most powerful voices have said about the budget in recent times, and why it matters so much  …

Governor Matt Meyer:
The Budget as a Statement of Values

Matt Meyer has consistently framed the state budget as an expression of Delaware’s priorities and long-term policy goals.

“The budget reflects our core Delaware values – investing in education, affordable housing, accessible healthcare, and safer neighborhoods,” Meyer said when announcing his FY26 budget reset.

Meyer has also emphasized tax fairness and the need to protect the economy from the impact of recent federal  tax changes. (Delaware was looking at a $400 million revenue shortfall thanks to those changes, but lawmakers quickly passed a bill that decoupled Delaware from federal tax law, averting the revenue hit for now.)

Lt. Gov. Kyle Evans Gay:
Budget Season is An Opportunity for Change

Delaware’s Lieutenant Gov. Kyle Evans Gay has described the budget process itself as a critical opportunity to drive change.

She believes that budget season should be a time for leaders to reassess priorities, redirect existing resources, and address stubborn challenges by aligning funding with community needs. When she identified $30 million within the existing budget to reinvest in childcare – without raising taxes – she was credited with demonstrating how policy goals can be achieved through better budget oversight

Gay sees the budget as a living policy tool, capable of delivering results. But she emphasizes that meaningful reform depends on meaningful collaboration between the administration and the General Assembly.

The OMB:
A Tougher, Tighter Aproach

The Office of Management and Budget (OMB) set the tone for the FY2027 budget process when it laid down new guidelines for the state agencies preparing their annual budget.

Agencies were instructed not to expect automatic budget growth, to justify every request with detailed documentation, and to prepare for both modest increases and potential reductions. The guidance emphasized transparency, accurate reporting, and accountability – requiring agencies to document vacant positions, structural changes, and long-term obligations.

Taken together, OMB’s message to agencies – and indirectly to the public – was clear: Delaware must do more to live within its means, protect essential services, and plan for economic uncertainty.

Secretary of State:
Transparency is a Core Expectation

Charuni Patibanda-Sanchez does not write the budget, but her office plays a key role in administering publicly funded programs and maintaining public trust.

Her Department of State oversees business filings, professional licensing, archives, arts and cultural grants, along with veterans services – areas where open records, public access, and accountability are essential. At the core of her agency is a belief that transparency is a foundational principle of state government, upheld through public hearings, legislative review, and detailed agency reporting.

Protecting the Revenue Base:
Bryan Townsend on Corporate Law Stability

For the budget to stay healthy, leaders must be vigilant protecting the sources of its strength. That’s the view of lawmakers like Senate Majority Leader Bryan Townsend, who works to protect Delaware’s lucrative, outsized role as the nation’s corporate home. 

Annual amendments to Delaware General Corporation Law are intended to preserve the balance and transparency of the law, and with it the stream of corporate fees and franchise revenues that stand as a major pillar of state funding. By maintaining stability and confidence in Delaware’s corporate law ecosystem, Townsend says the state can better safeguard funding for schools, healthcare, and public services.

The impact of Corporate Services revenue is undeniable — it currently generates about a third of the revenue in the General Operating budget. 

Budget Stabilization:
Rep. Mike Smith on Smoothing Volatility

Over time, the budget process evolves, and new tools appear that are aimed at getting everything to run a little more smoothly. The approach gaining renewed attention recently is a more formalized approach to budget smoothing, aimed at reducing volatility between strong revenue years and economic downturns.

In 2019, Republican Rep. Mike Smith was the co-sponsor of House Bill 155, which aimed to create a pathway toward a constitutional amendment that embraced budget smoothing. Like the state’s existing “rainy day funds,” this would save surplus revenues in strong years, then tap them during downturns, allowing the state to avoid abrupt spending cuts or tax increases.

While these mechanisms have been part of the state budgetary process since FY 2019, they deserve to be formalized rather than applied inconsistently, Smith said.

Balancing the Budget:
Putting the Focus on Spending

Are budget woes caused by not enough revenue – or  too much spending?

Before stepping down from the House to run for governor in 2024, former Minority Leader Mike Ramone had said he believes it’s the latter. “Delawareans need an executive who will be a responsible steward of their tax dollars,” Ramone said, calling for greater accountability and targeted investment.

Rep. Bryan Shupe of Milford has echoed that view, warning that without spending restraint, future budgets could force tax increases or service cuts.

Last year, Rep. Eric Morrison co-sponsored HB 13 to create a new tax bracket to require higher-income residents to pay a larger percentage of their income to the state, and create a more progressive tax system in Delaware. 

The state also took a different approach to raising more money last year –  to address motor fuel tax revenue, the state (DelDOT) raised DMV fees, tolls and the motor fuel tax. 

One Budget, Many Consequences

From education and childcare to healthcare and housing, the state budget is the last word on what Delaware can – and cannot – do.

This year’s unusually urgent budget cycle, shaped by a major revenue shock, cautious OMB guidance, calls for transparency, and competing fiscal philosophies, underscores why understanding the budget matters more than ever. As the Civics 101 series continues, Delaware LIVE and Spotlight Delaware will break down the key concepts behind the decisions now confronting state leaders – and how those choices affect every resident of the state.

About the Civics 101 Series: Civics 101 is a continuing explanatory series by Delaware LIVE and the Spotlight Delaware content marketing team designed to help readers understand how state government works and how budget decisions affect everyday life in Delaware. To read other stories in the series, visit the Civics 101 home page.