You can't balance your budget unless you know how much money you have. That is a lesson so basic it almost goes without saying. But in government, it is not always easy to agree on a fiscal projection. Executive and legislative branches both tend to rely on their own forecasters -- and Republican and Democratic partisans have incentives to trumpet different sets of numbers in order to bolster the case for their own policy agendas. So in state houses across the country, as each new budget season rolls around, divergent forecasts can cause heated debate, and sometimes protracted political standoffs.
Delaware's fiscal managers have found a way around that problem by relying on forecasts provided by an independent, nonpartisan commission called the Delaware Economic and Financial Advisory Council (DEFAC). "It's kept the state budget and revenue process out of political bargaining," says Delaware Deputy State Treasurer Anne Visalli.
DEFAC is composed of 36 advisers from both the public and private sectors. The group works to analyze and re-evaluate the budget on a regular basis, taking into account the constantly changing economic factors affecting the state's projected revenues and expenditures. It meets six times a year. An early session establishes the estimates lawmakers use to begin crafting a budget. In subsequent meetings, the council re-evaluates its estimates. It releases a final set of numbers before the end of the legislative session, so lawmakers can make necessary adjustments to the budget before passing it.
Created in 1977 by Gov. Pete DuPont, and recently recommissioned by Gov. Ruth Ann Minner, DEFAC's nonpartisan makeup has helped ensure the integrity of its forecasts. Both the governor's office and the state legislature accept its numbers without question.
Like other states, Delaware has not been immune from the effects of economic slumps. But DEFAC has helped the state avoid disasters. "Not only does it help us foresee what is coming down the road, it also helps us react more quickly," Visalli says. In the current slowdown, she notes that Delaware has not had to make significant cuts in any important state services.
