Meanwhile, in spite of warnings, Peterson seemed to be unaware of growing financial problems for the state. Finally, in June 1971, Peterson admitted he had made revenue miscalculations resulting in a $5 million deficit. The mistake opened the door to opponents of the other changes to unleash a barrage of criticism. As a result, when he sought a second term the next year, he won the Republican primary by 8% of the vote over former Lieutenant Governor David P. Buckson. In the general election, he was defeated by the Democratic former Lieutenant Governor Sherman W. Tribbitt after announcing an unexpected tax increase in the middle of the campaign. He left office with Delaware enjoying a budget surplus.