DOVER, Del. — Governor Matt Meyer unveiled proposed amendments to Delaware’s Fiscal Year 2026 budget Thursday, introducing a $6.58 billion plan that he says delivers personal income tax cuts for most people while boosting funding for schools, housing, and healthcare.
“This budget reflects our core Delaware values—investing in education, affordable housing, accessible healthcare, and safer neighborhoods,” Meyer said. “For too long, hardworking Delawareans who come home with dirt under their nails and stains on their shirts have paid the same as the wealthiest among us. That changes now.”
Tax Cuts for 92% of Delawareans
The budget centers on tax reform that Meyer says delivers on a promise of fairness. Under the plan, 92% of Delawareans will receive a personal income tax cut. The changes will add three new tax brackets for higher earners — $125,000, $250,000, and $500,000 — while those earning under $134,667 will see no increase.
Meyer says additional revenue will come from tax hikes on cigarettes and other tobacco products, aimed at funding key public programs as federal support declines.
Education Investment and Teacher Pay
Meyer’s proposal includes more than $75 million to increase compensation for public educators and nearly $8.4 million to expand mental health support in schools. An additional $8 million is earmarked for early literacy, with $3 million dedicated to direct-to-classroom assistance and a $500,000 investment to remove cell phones from classrooms.
The state also plans to invest in career and technical education, including $150,000 for artificial intelligence training.
Affordable Housing and Homelessness Initiatives
The FY26 budget includes $35.5 million for affordable housing efforts, including rental assistance, housing development funds, and workforce housing. The governor is also prioritizing programs to reduce homelessness, especially among children.
Healthcare and Nutrition Access
Delaware will commit $85.5 million to Medicaid to maintain access to care, with an additional $250,000 allocated to explore the feasibility of launching the state’s first medical school. Nutrition programs will also receive funding, including $1.5 million for the Smart Food program and $250,000 for the First State Food System Grant Program under the Delaware Grocery Initiative.
Efficiency and Accountability
The plan sets aside $1.95 million to modernize the Department of Health and Social Services electronic health records system. Other investments include $500,000 for a government performance review and $200,000 toward planning for shovel-ready infrastructure projects.