DEFAC numbers are up and minimum wage will be too

by James DeChene

The Delaware Economic and Financial Advisory Council (DEFAC) issued its December forecast on Wednesday afternoon. The December forecast is what Governor Carney will use when finalizing his recommended budget, to be released on January 4th. For the first time, his budget will utilize portions of the budget smoothing process, a legislative proposal that failed last year, but was issued in part via Executive Order.  The order places a limit on spending growth and sets aside a portion of the surplus into a Budget Reserve Account.

DEFAC reported spendable cash (98% of projected revenues) is up from the last forecast issued in September by $66.6 million. It also projects an increase of revenue of 1.7% for FY19 and 2.1% in FY20. It’s worth noting that the FY18 revenue growth rate was 9.5%. While there shouldn’t be a big budget showdown next year, there also won’t be a big windfall to be had under these predictions. One remaining unknown cost driver will be depend on how a court case is decided regarding how Delaware funds its schools, and how much more will need to be appropriated. More to come on that.

The Delaware Department of Labor released a statement with details about the minimum wage increase:
Minimum wage will be increasing for most individuals in Delaware twice in 2019. On January 1, it will be $8.75 and then on October 1, it will be $9.25. But, for the first time in Delaware history, we will now have a multi-tiered minimum wage. The General Assembly adopted a "Youth Rate" and a "Training Rate" that is $8.25. The youth rate applies to workers ages 14 through 17. 

The training rate applies to adult workers during their first ninety days on a new job. These new categories are $.50 less than the regular minimum wage rate. Effectively, that means workers under 18 and new employees with less than 90 days on the job won't see an increase on January 1st. Their first increase ($8.75) will come when they become eligible for the regular rate or on October 1, 2019, with the next general increase, whichever comes first. 

The labor law poster sets out all the rates. It is required to be displayed in all workplaces in a place accessible to employees and where they regularly pass. The poster is available on the Department of Labor’s website and can be downloaded in English here and Spanish here.