Governor Recognizes Michael Houghton’s Contribution to Advisory Panel to DEFAC Report on Fiscal Controls and Budget Smoothing
Governor John Carney recognized and thanked Morris Nichols partner Mike Houghton in his statement on the Executive Summary of the Advisory Panel to Delaware Economic and Financial Advisory Council (DEFAC) on Potential Fiscal Controls and Budget Smoothing. Mike was appointed chair of DEFAC in April 2017.
DEFAC is charged with providing advice to the Governor and the Secretary of Finance on the State’s overall financial conditions, current and projected economic conditions and trends, tax policy and current and projected trends in the national and local economies which may affect Delaware. The Council is also charged with providing non-partisan and objective revenue and expenditure estimates to the Governor and General Assembly. The Advisory Panel, which approved its recommendations on May 2, was established to study fiscal controls and budget smoothing mechanisms in an effort to address the imbalance between revenue and expenditure growth in Delaware.
In connection with his work chairing the Advisory Panel, Mike was also quoted in The News Journal on the proposal to stabilize Delaware’s budget framework. In an article titled, “Panel seeks limits on annual spending growth,” Mike spoke with The News Journal about the legislative challenges associated with moving forward with a proposal made by the Advisory Panel to the Delaware Economic and Financial Advisory Council (DEFAC) to establish fiscal controls and budget smoothing mechanisms. “Neither party has a monopoly on applying common sense to these issues,” Mike, DEFAC’s chair, stated. “Both parties must agree that a more permanent solution involves addressing both spending and broadening reliable revenue sources.”
The panel’s proposal, which is supported by Governor John Carney and state Treasurer Ken Simpler, would limit year-to-year spending growth based upon a series of economic indicators and would split income beyond those indicators between one-time expenses and a special fund to cover future budget shortfalls. The panel is also recommending a series of tax reforms that would further stabilize Delaware’s revenue sources.