by James DeChene
This week in Dover the major bill impacting the business community was SB105, which will raise Delaware’s minimum wage to $15. We started off the week hosting a teletown hall with over 50 members joining to hear the latest on timing and strategies, and a number of businesses joined us in Dover to make comment on the bill at the Senate Labor Committee. The stories business leaders shared during the committee meeting were compelling and varied, and included entities ranging from nonprofits to small and medium sized businesses from bakeries to a small business sign maker. Ultimately the bill was released from committee and has now been assigned to Senate Finance Committee due the bill’s significant fiscal note. If you have not taken the opportunity to contact your senator on this bill, I urge you to do so by visiting our Action Network page.
Other bills of note: The passage of a Chamber-backed bill in SB61, which would create a Transportation Infrastructure Investment Fund (TIFF) to help expedite commercial and industrial development projects. Released out of committee was SB74. This bill would make a technical change to the New Economy Jobs credit making it easier and more likely businesses will be able to take advantage of the credit.
Moving forward, there are 7(!) legislative days left this session. DEFAC will meet next Wednesday to announce the final forecast numbers that will dictate how much money will be allocated to the bond and grant-in-aid bills.
members testifying against sb105 on june 12:
by James DeChene
This week was the first in the four-week sprint to June 30. Highlights this week included: HB110, the legalization of marijuana bill was released out of House Revenue and Finance committee. DSCC remains opposed to the bill for reasons such as restrictions in how employers can create employment policies surrounding marijuana use, the current difficulty for employers finding qualified applicants that can pass a drug screen (which we think will be exacerbated by legalization) and the lack of a spot test for impairment.
SB105, the bill that would raise Delaware’s minimum wage to $11 in January 2020 and then by a dollar each year until it hits $15 in 2024 (with an imbedded escalator to raise with cost of living), was tabled in committee this week, HOWEVER, it will be heard in Senate Labor Committee next Wednesday, June 12. This will be one of the Key Votes (along with HB110) that DSCC will be using when making the decision on whether to support candidates.
Also this week was the State Chamber’s End-of-Session Brunch. Attendees heard from Tim Holly, chair of the DSCC Employer Advocacy Committee, on HB110, from Gary Stockbridge, DSCC Chairman, Chair of the Delaware Workforce Development Board (DWDB) and President of Delmarva Power, on what the DWDB is up to and how members can help in workforce training. We then heard from Solomon Adote from the Delaware Department on Technology & Information on the Cyber Security Council and the work they are doing to develop best practices on how to combat cybersecurity threats.
Rounding out the morning were remarks from House Speaker Pete Schwartzkopf on what to expect in June, including legislation on clean water, medical and recreational marijuana, education investments and how the state budget is shaping up. Senate President David McBride offered his perspective including acknowledging efforts by the General Assembly and the State Chamber to help provide economic development opportunities in Delaware. He also discussed what the Senate will be working on, including minimum wage in committee, education and transportation infrastructure investment
by James DeChene
This week was the first of the Memorial Day break, and the first of the Joint Finance Committee working on marking up the FY20 budget. Good news for budget writers came in the form of DEFAC numbers on Monday, adding close to $80 million to the forecast. Split almost evenly between the current year ($40.7 million) and next year ($38 million), this meeting continued the trend of meetings since September where an average of $40 million to the current year was brought in. This month the largest increase came from personal income tax filings. The total increases for FY19 total $200 million and nets out to an additional $160 to spend, or as the Chamber advocates, to set a large portion aside for when the economy takes a downturn.
That message was the focus of a letter sent to the members of Joint Finance this week from Chamber president Mike Quaranta that setting aside these dollars is good stewardship of public dollars. As a large part of Delaware’s revenue stream does not move with the economy, it’s important to save now while the money is coming in.
More good news in that Delaware’s unemployment rate is the lowest since 1988, and we haven’t suffered the national numbers where the unemployment numbers are down, but so is workforce participation. A good win-win for Delaware.
And lastly, the best news of all this week, is the three-day weekend. Memorial Day, BBQs and vacation aside, is the time when we should reflect on those who gave their lives for the lifestyle we currently enjoy. The freedoms we have today certainly weren’t free to achieve, and the thousands of men and women who made the ultimate sacrifice deserve recognition in how they helped shape this great country of ours.
by James DeChene
This week saw action on bills important to the Chamber. First, SB74 provides employers taking advantage of the New Economy Jobs credit to prorate the credit over 12 months, rather than using the calendar year (Chamber supports). This would allow employers making hires at the end of the year a full 12 months to spread out the credit. SB21, creating the Transportation Infrastructure Investment Fund was released from House Transportation Committee (Chamber supports). A bill banning certain flame retardants in consumer products (HB117-Chamber opposes) was tabled in committee. A bill banning single use plastic bags (HB130) passed the House and now goes to the Governor for signature. The effective date for implementation is January 1, 2021.
This session’s HB110, an act to legalize recreational marijuana, was introduced this week. As drafted the Chamber still opposes the language and will be working to insert language to protect employers. As previously noted, 71% of Chamber members oppose legalization.
Last week the Chamber attended a working group focused on what the next round of renewable portfolio standard goals would be post-2025. The Chamber expressed concerns over how increasing renewables would impact Delaware commercial energy users, and to make sure that as technology continues to improve, Delaware doesn’t lock itself in to a certain type of renewable source.
The General Assembly is off for the next two weeks before returning for all of June.
by James DeChene
This week kicked off the first round of Joint Finance Committee Hearings. Meeting throughout February, JFC members will hear from each state government agency on what their budget needs are for the next year and what and how the programs they provide are faring. Of note this year is the Governor’s Recommended Budget setting aside 2% of revenues to be used in times of economic downturn. That roughly $90 million is added to $45 million that was set aside last year. This means there is a $135 million pot of money that will be carried forward into next year’s budget, given legislators follow the budget plan. The problem will be if legislators choose to ignore the Governor and invest that money in long-term programs requiring ongoing revenues to sustain them. The State Chamber has been bullish on supporting efforts of budget stabilization and remains committed to that effort.
Also of note this week was a CNBC article on jobs at risk of automation. According to the article, automation will impact 25% of the US working population and many of the jobs that are either entry level, or slightly above, including cashiers, customer service representatives, and even commercial truck drivers. You can read Mike's President's Message for more on that and a link to the article. What this means functionally for policy makers is that focusing on legislative items like raising the minimum wage or creating other barriers to employment will only serve to hasten the demise of these jobs. Kiosks and other self-service centers will be adopted more quickly, leaving behind a displaced workforce lacking the training or skills necessary to move on to their next jobs. Instead, focus should be on providing skills training to targeted industries, so instead of being a cashier, a person can be a technician working to maintain and repair the kiosk.
by James DeChene
Next Tuesday, the day after the State Chamber’s Annual Dinner (see you there), the 150th General Assembly will gavel into session, with roughly 20% new members between the House and Senate. Other changes include a new Senate Secretary (best of luck, Joy), some new staff faces, new seating charts, and new committee assignments and offices for members. Some things, though, remain the same, including the “Delaware Blue” paint scheme that the lobby core will be staring at for the next six months.
For some members, Tuesday will represent the first time they will vote “Yes” or “No,” and if history holds, they will do so a few hundred times over the next two years. The variety of items facing their votes will be numerous, and based on the pre-filed legislation so far, we know of a few specifics. Two new top tax brackets for high earners, an Equal Rights Amendment that when passed will become a Delaware constitutional amendment, and changing the polling hours for school board elections. Another stack of pre-filed bills will be released today, and certainly more will come as session continues.
Items to watch include legislation to legalize recreational marijuana, more changes to Delaware’s minimum wage, proposed changes to Delaware’s LLC regulations, predictive scheduling, and a host of unknown, but important, issues that will face the business community.
As legislation is introduced that impacts your business we and your elected officials need to hear from you. Share with us how new proposed legislation will impact your employees or force other changes to your business; or how it could change your plans for investment, expansion, or your ability to stay in business. These stories are critical to be heard, and we will have measures in place to make it as easy as possible for you to comment without taking time away from focusing on your operations. Your voice matters and the State Chamber works to make it heard.
by James DeChene
Congratulations to last night’s primary election winners as they now will go on to face their general election opponents (unless they were one of the few who have no general election candidate, and have therefore will be in office in January 2019).
For the past three years, we’ve been following the appeal of the Delaware and Maryland PSCs to the Federal Energy Regulatory Commission to grant a rehearing of how a regional power authority (PJM) calculated the cost allocation to cover the building of a transmission power line across from NJ to the Delmarva Peninsula.
On July 19, FERC announced it would grant the rehearing. In the announcement they note:
"…we grant rehearing. Specifically, we find that it is unjust and unreasonable to apply PJM’s solution-based DFAX cost allocation method to Regional Facilities, Necessary Lower Voltage Facilities, and Lower Voltage Facilities that address stability-related reliability issues, including the Artificial Island Project. To determine the just and reasonable rate to be applied, we are establishing paper hearing procedures."
This is good news for Delaware and Maryland rate payers. To recap, previously PJM allocated over 90% of the project cost to be paid for by Delmarva zone ratepayers, driving the cost of power for those receiving less than 10% of the benefit of the line’s use. The estimated project costs are $279 million according to the latest PJM projection, meaning Delmarva Zone customers will be expected to bear responsibility for $250 million. The economic impact to large industrial users would be immense, and for both large and smaller users, concerns over closures and job losses remain.
The Chamber will continue to monitor this issue, and weigh in as appropriate.
by James DeChene
The Delaware House of Representatives held a late night, with a 3:30 a.m. vote to increase Delaware’s minimum wage by $.50 twice next year, in January and October 2019. House Republicans were able to negotiate the passage of a bill that would create two lower-wage groups—a training wage, and a teen wage, to be paid at most $.50 under the minimum wage once the bill goes into effect on January 1, 2019.
The Delaware State Chamber, along with other business groups, were on hand throughout the last night of session to provide input and feedback on how this legislation was being crafted and handled.
Each year legislation has been introduced to raise the minimum wage, which was last raised in 2015. Each year the legislation is sent to the Senate Labor Committee (as it generally originates in the Senate), where it passes, and goes to the full Senate for a vote. This year, the first minimum wage bill, SB110, followed that process.
At a hearing lasting two hours and full of testimony from nonprofits, the agriculture community, and members of chambers from around the state, all offered testimony on the negative impact increasing the minimum wage would have on their businesses and their employees. Ultimately SB110 would fail in the Senate when it came up for a floor vote.
Fast forward to later in the year when SB170 was introduced, another bill by the same sponsor, Sen. Marshall, that would raise the minimum wage. The bill was heard, and released, from the Senate Labor Committee. On July 30, SB170 passed the Senate as part of a negotiated deal to provide relief for Delaware casinos, and headed over to the House and was assigned to the House Economic Development Committee.
In years past (at least since 2014), when a minimum wage bill passed the Senate, and headed to the House, the bill was heard, and failed in committee. The same process of having impacted businesses, nonprofits and farms share their stories followed, and ultimately, members of that committee would vote to defeat the bill.
Last night, in a dramatic departure from the usual process, members of the House voted to bring SB170 to the floor for action under a suspension of the rules, a process normally reserved for non-controversial bills. As evidenced this year, with other legislation in the Senate, departure from that process seems to be increasing in its frequency, a trend we hope does not become the norm.
What is most disturbing about what happened on July 1, is that members of the general public, both opponents and supporters of a minimum wage increase, were unable to have their voices heard. Thankfully, a second bill was negotiated to provide alternative wages for training and for teens, but that shouldn’t have been undertaken in the wee hours of the morning.
The Delaware State Chamber, along with the New Castle County Chamber, the Central Delaware Chamber, the Delaware Restaurant Association, the Delaware Food Industry Council, the Delaware Chain Drug Association, the National Federation of Independent Business, and other business groups have all worked together over the years, including this year, to let legislators know the negative impacts of raising the minimum wage, and the numerous studies showing how it negatively impacts the employees they are trying to help.
The Chamber remains disappointed in the passage of SB170 and will continue with others in the business community to maintain the message that these types of bills hurt business and they hurt workers. Legislators will continue to be told that businesses will have to decide how to cut additional costs to pay for this added payroll expense. It is imperative that people working full time for minimum wage are encouraged to add to their education and outfit themselves with skills that meet workforce needs in order to improve their personal or family situation.
For more information regarding Chamber advocacy efforts, please contact me at email@example.com.
As part of our Spring 2018 survey, we asked participants to list their top three policy concerns. We posed a similar question in our Fall survey with comparable results. Last survey, 50% of our survey respondents said that the Cost of Health Care was their #2 policy priority. We heard you loud and clear and are addressing this issue by working with partner organizations and stakeholders around the state.
With that question out of the mix in our current survey, members are telling us that Economic Development remains the #1 policy concern. That is followed education/work force development and permitting delays/regulatory issues.
James DeChene is the Chamber's Senior Vice President of Government Affairs.