Governor Meyer Unveils FY26 Budget Plan: Prioritizing Tax Fairness, Education, and Housing

March 27, 2025

Governor Matt Meyer’s FY26 budget proposal aims to build a stronger, fairer Delaware with tax relief for 92% of residents and major investments in education, housing, healthcare, and public services.

DOVER — Governor Matt Meyer today announced his proposed budget amendments for Fiscal Year 2026, focusing on tax fairness, educational investment, affordable housing, and healthcare access. The $6.58 billion plan seeks to deliver tax relief for 92% of Delawareans while ensuring that the wealthiest pay their fair share.

“This budget reflects Delaware’s core values—investing in education, affordable housing, and accessible healthcare,” said Governor Meyer. “For too long, hardworking Delawareans have paid the same tax rates as the wealthiest among us. That changes now. Under this plan, 92% of residents will receive a personal income tax cut, while the wealthiest contribute more. Together, we’re building a stronger, fairer Delaware where every family has a chance to succeed.”

Delivering Tax Fairness

The Governor’s plan includes new tax brackets and revenue proposals designed to create a more equitable tax system:

•No Tax Hikes for 92% of Delawareans: Individuals with taxable income below $134,667 will see no increase in personal income taxes.

•Updated Tax Code: The plan introduces three new tax brackets to ensure top earners pay their fair share:

•$125,000

•$250,000

•$500,000

•Additional Revenue Measures: Increased taxes on cigarettes and other tobacco products to fund critical programs and services.

Investing in Delaware’s Future

Governor Meyer’s FY26 budget focuses on strengthening Delaware’s workforce, classrooms, and communities. Key investments include:

Strengthening Delaware’s Workforce

•Increased Compensation: Salary increases for all state employees, with targeted raises for public educators.

•Enhanced Healthcare Benefits: Increased healthcare funding to ensure affordable, comprehensive coverage for state employees.

•Competitive Pay Initiatives: Continued focus on ensuring public employee compensation remains competitive.

Supporting Classrooms and Educators

Governor Meyer’s plan directs significant funding to improve student literacy, support educators, and address students’ mental health needs:

•$8.0 million for emergency early literacy programs to help students meet their full potential.

•$75.5 million to enhance educator compensation and attract top talent.

•$8.4 million to expand student mental health services, bringing total investment to $67.7 million.

•$3.0 million to leverage private contributions for direct classroom support.

•$500,000 to reduce distractions by limiting cell phone use in classrooms.

•$150,000 for Artificial Intelligence training through career and technical education programs.

Expanding Affordable Housing Access

To address Delaware’s housing needs, the budget includes measures to increase affordable housing options and reduce homelessness:

•$19.0 million for the Housing Development Fund.

•$6.0 million for State Rental Assistance Programs (SRAP).

•$5.5 million for Downtown Development Districts to promote multi-use, sustainable development.

•$3.0 million for workforce housing programs.

•New Homelessness Response System: Coordinated efforts to end child homelessness in Delaware.

Healthcare for All Delawareans

The Governor’s plan aims to improve healthcare access and invest in public health initiatives:

•$85.5 million for Medicaid to ensure critical care access.

•$1.5 million for substance abuse and mental health professionals.

•Medical School Feasibility Study: A $250,000 investment to explore creating a medical school in Delaware, one of only four states without one.

•Smart Food Initiatives: $250,000 for the First State Food System Grant Program, part of the Delaware Grocery Initiative, to improve access to healthy food.

Building an Efficient, Transparent Government

Governor Meyer is committed to streamlining government processes, improving transparency, and increasing efficiency:

•$1.95 million for a DHSS Electronic Health Records system to improve reimbursement processing.

•$500,000 for a Government Performance Review to enhance service delivery.

•$200,000 to invest in shovel-ready infrastructure planning.

•Executive Orders:

•Executive Order #3: Committing to ethical, transparent, and effective governance.

•Executive Order #5: Establishing the Delaware Council on Farm and Food Policy to improve food access and community nutrition.

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About Governor Matt Meyer

Matt Meyer is a former public school math teacher, small business owner, and former New Castle County Executive. As the leader of Delaware’s largest local government from 2017 through January 2025, Meyer demonstrated that government can deliver real results for working families.

Growing up in Delaware, Meyer attended Brandywine School District schools and Wilmington Friends School. He later studied Computer Science and Political Science at Brown University before moving to Nairobi, Kenya, where he launched Ecosandals, an environmentally friendly footwear company. Meyer also served as a diplomat embedded with the U.S. Army in Mosul, Iraq, during Operation Iraqi Freedom and Operation New Dawn.

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For questions or to schedule an interview with Governor Meyer, please email mila.myles@delaware.gov.