Why Should Delaware Care?
Delaware is finalizing its Fiscal Year 2027 budget, which hovers right around $7 billion. It’s an increase compared to the previous year as two of the state’s largest departments continue to grow.
The Delaware Senate approved on Thursday a $6.99 billion operating budget for Fiscal Year 2027, which starts July 1 – exceeding a spending goal set by Gov. Matt Meyer earlier this year.
The final budget proposal written by the General Assembly would increase spending by 6.32% over the current fiscal year. The governor had sought to keep spending growth below 5%, while the state’s independent financial analysts recommended growth of no more than 3.9%.
The ballooning amount of spending has become a major point of contention for some legislators, particularly
Lawmakers also approved $146.2 million for the annual supplemental budget, which is how the state funds one-time expenditures like equipment and technology purchases, pilot programs, and short-term projects.
The final operating budget adds $58.4 million to a previous version of the budget presented earlier this year by Gov. Matt Meyer. Both the supplemental and operating budgets require approval in the House of Representatives, and will likely be heard early next week, as lawmakers look to tie up the legislative year that ends June 30.
Delaware’s operational increases were relatively modest compared to previous years, but increases in education and health spending contributed to some of the largest spikes in this year’s budget.
Delaware will spend $2.51 billion on public education, a 5.38% increase compared to FY 2026’s operating budget, with $100 million going to increase teachers’ salaries and $26 million allocation toward district operations.
The budget for Delaware’s Department of Health and Social Services, the state’s second largest department, will grow by 11.2% in 2027 following a $128 million increase in Medicaid spending. Spikes in Medicaid represent the first year Delaware has to reconcile with federal cuts to the program, as well as rising healthcare costs.
What’s in the budget?
For Fiscal Year 2027, like other years, health and education spending are the largest budget items for the state. Both of the departments will consume more than 63% of the total operating budget in the coming year.
Still, the state invested in multiple programs within its other agencies. One of the largest allocations includes pay raises for state employees and teachers, totalling more than $146 million.
Outside of the operating budget, Delaware spent an additional $100 million in its one-time supplemental bill to fund adjustments to its state education funding formula as it tries to reconcile an allocation method that has historically left smaller, poorer districts with inadequate funding.
The supplemental budget would allocate millions of dollars to multiple education initiatives across the state including SAT reform, operational support for Delaware State University, as well as funding for teacher projects.
This year’s budget also marks a first for a new state agency, which was signed into law last summer. The Office of Inspector General, which is meant to be a government watchdog independent from other agencies, received its first budget appropriation of $1.4 million this year.
The budget vote
During the Senate hearing, Sen. Trey Paradee (D-Dover), the top Senate lawmaker on the budget-writing Joint Finance Committee, said this year’s budget bill represents “thousands” of hours of work and said both healthcare and education were some of the key cost drivers.
He also expressed appreciation for the governor’s office and for delivering lawmakers a “really excellent” budget earlier this year.
During his presentation, Paradee pointed to efforts by the state to save taxpayers money and bring down its overhead as spending continues to outpace revenues. He said the state eliminated 37 different positions that had sat vacant for multiple years and found $5 million in contractual savings.
Still, Senate Republicans pointed to the gap between spending and revenues, saying the state needs to work to lower recurring expenses.
Sen. Eric Buckson (R-South Dover) pointed to progress made in this year’s budget to close the spending gap, and said lawmakers should continue to reconcile the difference so they don’t have to ask taxpayers for more money every year.
Paradee agreed, adding that legislators passed “very few bills” with recurring expenses, and that dozens of bills may not pass this year because of their fiscal impacts.
A spokesperson for Meyer’s office said they want to see the final budget passed in the House of Representatives before commenting on the governor’s position on whether he’d sign it.
In an interview after the hearing, Paradee said of all the budgets he’s worked on in eight years on the powerful Joint Finance Committee he’s “most proud” of this one.
He was optimistic about Delaware’s finances, pointing to its revered corporate franchise, as well as its low tax burden to constituents. But he also said that lawmakers have to continue making “smart investments” to keep the state stable.
“It’s all very fragile, and, and we need to make sure that good decisions are made in this building,” he said.
