In many ways, Delaware’s multi-billion-dollar budget is like any household spending plan. The big difference is that this family is nearly a million people strong.
Just like a household, the state must find a way to take care of everyone, adjust to changing needs, and stay balanced year in and year out. Both occasionally contend with higher-than-expected expenses, and both face that eternal struggle – balancing wants against needs .
Balancing the Checkbook
“We can’t spend what we don’t have” is a guiding principle in state finance, and a plain cold reality for many households. Neither the state nor a prudent family planner would borrow money just to run everyday expenses, but in the state’s case, it’s against the law: A balanced budget is constitutionally required in Delaware, meaning it cannot spend more than its officially certified revenue forecast allows. Each June, the General Assembly and Office of Management and Budget finalize spending within this cap, much like a family must ensure bills don’t exceed income.
EXPLORE MORE
- Keep your journey going at the Civics 101 homepage
- An introduction to the series
- Check out the handy Glossary of Terms
- Read what Delaware’s leaders have said about the budget
- Part 1: The “four buckets” of Delaware’s budget
- How the state budget is like a family budget.
Educating the Kids
Families that value education make it a priority – budgeting for school supplies, tuition, or extracurricular programs. Delaware does the same, dedicating nearly one-third of its General Fund to public education. From early childhood programs to higher education, the state treats learning as an investment in its “next generation.”
Caring for Seniors
Just as families support aging and needy relatives, Delaware allocates significant funding to Medicaid, senior health services, and long-term care. When healthcare costs rise or the senior population grows, the state must find new ways to fund these programs – or make difficult tradeoffs elsewhere, just like any family.
Supporting Those Who Need More
In many families, some members need extra help from time to time. Delaware also lends a hand to those in need, through programs for special education, disability services, and housing assistance. The Department of Health and Social Services (DHSS) administers much of this care, ensuring that vulnerable residents aren’t left behind.
Keeping the Household Running
A household budget usually must cover the unavoidable needs of modern life – things like utilities, car repairs, and home maintenance. For Delaware, that translates to public safety, road maintenance, and emergency services, funded through the Operating Budget and Capital Improvement (aka Bond) Bill. These “maintenance” costs keep the state’s infrastructure and services functioning day to day.
Planning for the Future
Families might save for college or home repairs; Delaware saves for economic stability. The Rainy Day Fund and Budget Stabilization Fund are reserve accounts designed to cover emergencies and revenue downturns. Lawmakers must decide when it’s truly “raining” – and how much to draw from savings.
Adjusting to Income Changes
Just as a family’s income swings up or down with pay raises or layoffs, Delaware’s revenue streams – from personal income taxes, corporate fees, and federal funds – fluctuate with the economy. When revenues fall short, the DEFAC (Delaware Economic and Financial Advisory Council) updates forecasts and leaders adjust spending mid-year.
Debt and Credit Management
Families might take out a mortgage; Delaware issues bonds for schools, roads, and infrastructure. Look at bonds as a giant home loan – but instead of asking a bank, the state goes to the open market, seeking the best terms it can get. Maintaining a strong credit rating is essential to keep borrowing affordable for both families and the state, and the state’s Bond Bill process ensures that debt remains within limits. Delaware has managed to keep a fairly solid credit rating, which means less of its money has to go toward paying off debt.
Negotiating Priorities
In any home, family members debate what to spend their limited funds on – like a vacation, or roof repair? Delaware’s version of this dinner table discussion happens in Legislative Hall, where lawmakers negotiate over competing funding priorities, from education to healthcare, to the environment and economic development.
Transparency and Accountability
Families track expenses to avoid overdrafts. Similarly, Delaware maintains public budget hearings, detailed appropriations bills, and open financial reports so taxpayers can see exactly where their money goes.
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.
