DOVER, DE – Governor Matt Meyer unveiled his proposed $6.58 billion budget for fiscal year 2026 on Thursday, outlining key investments in education, housing, healthcare, and tax reform. A significant part of the proposal focuses on tax reform, introducing three new income tax brackets for individuals earning $125,000, $250,000, and $500,000. Meyer explained the adjustments are designed to ensure a fairer tax system in Delaware, emphasizing that wealthier residents should contribute more. Despite this, some lawmakers, such as Senator Trey Paradee, raised concerns that the new brackets, especially one starting at $125,000, could negatively impact middle-class families. Meyer countered these concerns by noting that 92% of Delawareans would see no increase in personal income taxes, with individuals earning under $134,667 in taxable income exempt from higher rates.
Education is another major focus in the budget, with over $119 million allocated, including $75.5 million for teacher pay raises and $8 million for emergency literacy funding. Meyer pointed to poor test scores and literacy challenges in Delaware’s public schools as the driving force behind these investments. To address Delaware’s housing crisis, the budget includes $35.5 million for rental assistance and workforce housing initiatives, though some, like Representative Lyndon Yearick, questioned the effectiveness of these programs.
The proposed budget also dedicates over $176 million to healthcare, including funds for Medicaid, a medical school study, and mental health professionals. With federal funding uncertainties looming, Meyer and other lawmakers, including Paradee, cautioned that potential cuts to Medicaid could harm the state budget and critical services like hospitals and nursing homes. The Joint Finance Committee will review the budget ahead of the 2026 fiscal year.
Delaware Governor Matt Meyer