DOVER, DE- Gov. Matt Meyer signed House Bill 255 into law on Wednesday, finalizing Delaware's move to separate its tax code from federal changes. The signature came shortly after the Senate approved the bill along party lines during an extraordinary session marked by hours of tense debate. The House passed the bill last week.
House Bill 255 decouples Delaware from several federal tax changes set to take effect under President Donald Trump's "One Big Beautiful Bill Act."
Democratic lawmakers say the bill is needed to address what they estimate will be a $400 million budget shortfall over the next several years — a gap they say is tied to those federal changes.
Republicans, however, argue the state's problem stems from overspending, not federal policy, and say lawmakers rushed forward with legislation they believe wasn't needed.
Meyer signed the bill moments after it cleared the Senate, saying it's critical to protecting Delaware's revenue.
"We are hopeful that in this small state of neighbors that we fight for, we can deliver—no matter what's going on outside our state, we will not compromise in making sure we deliver for Delawareans, and we will make sure our budget reflects the values of the people in our state."
Democrats — all of whom voted yes in the Senate — say the new law is essential to shield Delaware's budget from the projected shortfall.
Sen. Trey Paradee pointed to uncertainties in Washington, D.C., and argued Delaware needs to separate from the federal tax changes to protect its revenues.
"This would be a significant impact on our state revenue. And this is money that our state is going to rely on to pay for important things like, well, like our schools and improving our roads, and supporting our fire companies, our senior centers, etc."
However, Senate Republicans all voted against the bill, saying it was rushed and that the projected shortfall is not tied to changes in Washington, D.C., but to state overspending. They argued President Trump's "One Big Beautiful Bill Act" was designed to stimulate the economy by creating jobs and opportunities — and questioned how Delaware can do the same while moving in the opposite direction.
Sen. Eric Buckson, who raised several concerns on the Senate floor Wednesday, said he believes the bill — and the special session — were unnecessary and questioned why lawmakers were rushing legislation based solely on projections.
"We've got a DEFAC meeting coming up in December, which has the very likelihood based on forecasts right now, to close that gap on the expected shortfall to a much, much more manageable situation. So why are we in here creating legislation to cure a crisis that we don't even know exists right now?"
Because the bill separates Delaware’s tax code from upcoming federal changes, Buckson argues it could send a message of unpredictability to the state’s business community.
"You send mixed signals, whether it's to the small business owner, where you're changing and impacting them, or to someone greater, maybe globally, who's looking to incorporate here and has options. Now that's a very real problem for Delaware."
However, Paradee says separating from the federal tax changes was the only responsible choice to safeguard Delaware's financial stability.
"There'll be virtually no impact on Delaware small businesses or Delaware residents for that matter, except that if we had done nothing, there certainly would be an impact because we're talking about a loss of over $400 million over three years."
With House Bill 255 now signed into law, Delaware joins 16 states that have already taken this step. The law takes effect immediately.