Why Should Delaware Care?
The Delaware Economic and Finance Advisory Council is a state panel responsible for estimating budget revenues, which consequently sets the bounds of state budget negotiations. While it was created to remove politics from the budget forecasting process, the dismissal of an appointee by the governor has sparked political tensions.
Gov. Matt Meyer fired a longtime Delaware budget forecaster on Wednesday, a day after a news report stated that he criticized the Meyer administration over transparency surrounding the state’s prominent corporate franchise.
In response, Delaware Senate President Pro Tempore David Sokola issued a statement calling for the reinstatement of the official, Michael Houghton, who had served on the state’s budget forecasting committee for the previous nine years.
Sokola also indicated in his statement that Meyer’s decision amounted to “undue political interference.” He asserted that the termination was “for publicly asking questions about our State’s corporate franchise tax revenue.”
The critical comments could reopen tensions between the governor and senators within his own Democratic Party that have gone dormant following an acrimonious first year of the Meyer administration.
Meyer’s office declined to comment for this story.
Established in the 1980s, Delaware’s budget forecasting committee – known by its acronym, DEFAC – provides periodic reports estimating the amount of money Delaware could bring in annually from taxes and fees. Those figures are crucial to budget negotiations carried out each spring between lawmakers and the governor’s office.
The committee is made up of academics, business executives, and public officials who are appointed by the governor and confirmed by the Delaware Senate.
In an interview with Spotlight Delaware, Houghton said he had asked during a DEFAC meeting last week why the Division of Corporations had not provided up-to-date revenue figures.
Houghton said he was confused that the numbers presented to the committee then did not include information from January and February. He also stressed his comments were not alarmist, saying he did not claim the “sky was falling.”
The Division of Corporations oversees Delaware’s sprawling, and lucrative, corporate franchise – an industry of attorneys, registered agents and millions of companies’ legal headquarters that generate about a third of Delaware’s general fund revenue.
In recent months, the Meyer administration has publicly celebrated a jump in the number of companies that domicile in Delaware to 2.2 million entities.
Following last week’s meeting, WHYY reported that Houghton was among three current or former DEFAC members who said “the absence of data is ‘unusual,’ ‘confusing’ and ‘lacks transparency.’”
Houghton said he did not explicitly mention transparency concerns. Still, he told Spotlight Delaware that he is troubled about an apparent “nexus between asking questions about available information” and his subsequent removal.
“I didn’t say anything about transparency. What I said was I thought there was more information that was available,” he said. “And it would be best to have it.”
Houghton also noted that over the past year he was the only DEFAC member who had also served under the previous administration of Gov. John Carney.
Carney and Meyer have held a tense relationship, at least since the former governor publicly supported former-Lt. Gov. Bethany Hall Long during the 2024 race for governor.
While it is typical for incoming governors to appoint new members of the committee, Houghton said that Alan Levin – DEFAC’s current chair – had asked Meyer to keep him on, despite the gubernatorial transition.
When reached for comment, Levin confirmed that last year that he had asked the governor to keep Houghton on as a member of DEFAC. Since then, he said, Houghton has proven to be “very helpful” on the committee.
Asked if he believed Houghton’s dismissal amounted to “political interference,” Levin noted that DEFAC members served at the pleasure of the executive branch, and said that governors have regularly swapped out members who had served under their predecessors.
Still, Levin also noted that he shared Houghton’s concerns about the revenue figures presented by the Division of Corporations. During last week’s budget meeting, Levin noticed that certain figures matched numbers presented in December, he said. That led the committee to surmise that the information presented did not include data from recent months.
“There is no way in hell it would be the exact same number,” Levin said.
Levin said DEFAC has since received assurances from Delaware Secretary of State Charuni Patibanda-Sanchez that members will receive up-to-date information at the committee’s next meeting.
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