Delaware will save more than $300M after federal tax decoupling takes effect

The fiscal year 2027 forecast remained relatively flat from the October meeting. But some expenses declined, including salaries for teachers. Brian Maxwell, state director of Management and Budget, said teacher salary expenses were down because student enrollment has dropped. He said federal immigration policy could be impacting the state’s Multilingual Learners.

“Obviously, there have been a number of students that may not be showing up to class just because of the enforcement of [Immigration and Customs Enforcement],” he said. “So some of the families may be scared to actually send their kids to school.”

Maxwell said overall enrollment is down, but the number of students needing special education services is up. The next student count is in February.

DEFAC members also discussed the revised Healthcare Spending benchmark. In September, the subcommittee devised a methodology that only used healthcare inflation, resulting in a 7.13% for 2026.

“We all gathered in October and there was a fair amount of concern with that outcome,” said Christen Linke Young, director of Health and Social Services. “So the subcommittee reconvened earlier this month to consider a new approach.”

After adopting the methodology using expected national inflation data and a three-year measure of health care cost growth, the benchmark now sits at 4.9%. But Young said there would be no penalty for hospitals exceeding the guideline.

Gov. Meyer and the state’s largest nongovernmental employer, ChristianaCare Health System, reached an agreement earlier this year in a lawsuit the regional hospital system filed last year. The Diamond State Hospital Cost Review Board was created by lawmakers in June 2024 to try to rein in hospital spending. But the agreement, which requires new legislation and the governor’s signature, would strip the board of its authority to approve and modify hospital budgets.