This week was back to school for most Delaware students, though if you’re like me you had one that started pre-Labor Day. The Sussex County native in me still chafes at such an early start, but you play the hand you’re dealt. In the fall, the Chamber is part of two school-related events that members can take advantage of.
First is Delaware Principal for a Day. The week of October 21 puts business leaders in schools all around the state shadowing the principal of a local school for a day. It’s an excellent opportunity for schools to highlight successful programs, to provide real life examples of the breadth and scope of students and how their educational needs are being met, and it allows for schools to hear what skills businesses are looking for in the employees of the future. If you’d like to participate, or to learn more about the program, contact Kelly Basile.
The other school-related event in October is Manufacturing Week. The State Chamber is also the National Association of Manufacturers state affiliate, and NAM celebrates Manufacturing Day the first Friday in October. We extend that to a full week here in Delaware. Delaware manufacturers are encouraged to bring students from local middle and high schools into their facilities for tours to learn more about manufacturing as a career. In addition, the Governor signs a proclamation designating manufacturing week and the Congressional delegation has conducted tours in the past. For more info on Manufacturing Week, you can contact Cheryl Corn.
By James DeChene
There is a fascinating article in the Wall Street Journal Thursday edition that sheds more light on Amazon’s ultimate decision to abandon New York from the corporate headquarters competition to instead build in northern Virginia. Delaware, along with every state and metro area competing for development, can learn a thing or two on how companies react to how they are perceived when making expansion decisions.
The crux of the article focuses on Amazon’s “burn book," a Microsoft Word file of all the public statements made by elected officials and other leaders who stood in opposition to the project. Ultimately used as evidence to back up the decision to give up on New York, it highlights the importance that words, public perception, and overall feedback is weighed when making important decisions. In Delaware we pride ourselves on our size, our intimacy, and the ability to gather all the necessary players in the room quickly and easily to successfully woo companies here.
That still leaves the other side of the coin to be dealt with, the court of public opinion. When companies are excoriated to “pay their fair share” (whatever that means), are accused of not being good corporate citizens for not blindly acquiescing to the latest trend that hits a company’s bottom line, and made to feel like nothing more than an ATM machine dispensing directly into state coffers, that’s where problems rise.
In the next year I expect a number of debates happening in this court of public opinion where these claims will be thrown about. From finding ways to deal with the cost of healthcare and how employee coverage is paid for, to new forays into labor law that will ultimately cost companies time, effort and resources to adjust to, to continued calls for increases in gross receipts taxes, licensing fees and other revenue generators, the perception of the business community will increasingly be under scrutiny.
Delaware’s size is certainly an important asset in attracting companies here, and without annexing land on the Delmarva Peninsula, its size will stay the same. What needs changing is how businesses are viewed and recognizing their positive impacts on Delaware’s economy and long term success, and taking measures to make sure they remain successful and grow. Without that, we may as well put up “I Love NY” signs at our borders.
by James DeChene
The announcement of a 500K plus downward revision to the number of jobs created since 2018 coincides with this month’s Delaware labor report showing that Delaware, while not being revised downward, saw most of its recent job creation over the last 12 months happen in 2018. What is unknown as of now is whether or not this is a sign of a weakening economy. Bear in mind that nationally there are over 7 million more jobs than employees to fill them, and wage gains are among the highest in the last 20 years. (I’ve written about the wage increases catching up for low skill workers in the last few years, surpassing where they were pre-Great Recession). Consumer confidence remains high, and all eyes are on whether the ongoing trade war with China will erode that confidence, and if so, how fast.
Locally I hear employers remain confident about overall economic conditions. Concerns when raised revolve around available access to talent (join us on October 8th for our Developing Delaware event to learn more), and more specifically finding younger workers for positions to replacing their soon-to-be-retired older colleagues.
A recent article in SFGate focused on how Maine’s aging population is putting a strain on the healthcare industry—from retirement homes to home health aides, there aren’t enough people to staff these jobs forcing closures and cuts to services, even if they are state mandated.
Maine now classifies as “super aged” meaning over one-fifth of its population is over the age of 65. By 2026, 15 other states, including Delaware, are expected to follow suit.
Let that sink in.
While Delaware touts itself as a retirement destination, and it certainly is (Hello, Sussex County) the flip side is the strain placed on care workers as more and more individuals require assistance and care. The cost to provide these services isn’t expected to decline any time soon, and as last year’s minimum wage debate highlighted, the cost to the state to increase reimbursements for direct support professionals ranges into the millions per year.
Delaware should be following closely the situation in Maine and the other 13 states, as we collectively advance to “super aged” status. We need to be looking at creative ways to lower costs for businesses so they can apply those savings to the inevitable cost of labor increases. For example, Maine allows businesses to pool together to purchase insurance under associated health plans, an idea the State Chamber and others has begun to flesh out.
It will take creative and innovative thinking to help solve these and other problems facing Delaware, and it will take the cooperative efforts of the general assembly, business, health care and other communities coming together to be successful.
This week Governor Carney signed into law a number of bills important to businesses throughout Delaware.
SB95 creates a contractor registry for commercial and residential contractors as a way to combat improper use of 1099 labor. In addition, it allows for contractors to sub out portions of their work to other contractors, bringing Delaware in line with surrounding states.
House Bill 130, the Plastic Bag Ban bill was signed and goes into effect January 1, 2020. The bill bans most plastic bags for retailers over 7,000 square feet or that have three locations, each being at least 3,000 square feet. But it does allow the continued use of bags to enclose raw meats and vegetables, along with restaurant carry out bags and containers.
SB61, the Transportation Infrastructure Investment Fund bill, was also signed. This DSCC-backed bill creates a fund to help offset infrastructure requirements on commercial development projects.
Also this week was a Senate pre-file of legislation impacting Delaware’s renewable portfolio standards. Important because of how it mandates the ratio of renewable energy Delaware power companies must offer, the legislation increases to the use of renewables to 40% by 2035, of which 7% must come from solar. The DSCC is currently reviewing the language to provide feedback.
When HB190 was passed modernizing the Coastal Zone Act, DNREC was the next step in the process on creating the regulations interested companies would follow to apply for a conversion permit. DNREC convened a Regulatory Advisory Committee (RAC), and the State Chamber had a designee helping provide input on behalf of the Chamber and its members. Fast forward to June when the RAC released its report to DNREC, which the agency used to craft its draft regulations and put them out for public comment, with time left to meet the October 2019 deadline to have all regulations finalized and in place.
The Chamber has provided comment in response to the draft regulations that DNREC created. Notably the comments are focused primarily on areas that require clarification and/or possible removal, and on areas where the draft regulations go beyond the scope of HB190—most notably section 8.6.1, which would put a term limit on ANY CZA permit issued, whether it’s a conversion or a general permit. That section alone goes against not only the legislation and current process, but also against the spirit of the RAC, which at the outset pledged not to go beyond the scope of creating a regulatory process specific to conversion permits nor to be an avenue to reopen the overall CZA permitting process.
The Chamber has reached out to the sponsors of HB190 and has heard that they too are following these drafts and are working to help clarify these regulations to meet the intent of the legislation. Thanks to Rep. Osienski for his help and participating in this process. As more information becomes available, we will be sure to share.
Good news this week from Milford and Smyrna as the Delaware State News highlighted a number of development projects stemming from the Downtown Development Program. The five-year-old program was designed spur economic development in targeted downtowns throughout Delaware in need of revitalization. Of particular note the article stated, “The 12 projects announced Thursday, with nine taking place in Wilmington, received $5.5 million in rebates leveraging $103 million in total investment.”
Also this week, the National Lieutenant Governors Association was in town, hosted by Lt. Governor Bethany Hall Long. The meeting featured a number of topics that related to Delaware—how states have successfully leveraged FEMA in disaster relief, innovative ways to address the ongoing opioid crisis, how states are working with private employers and associations to address the jobs needs across the country (it’s estimated there are 7.3 million jobs currently available—more than the available unemployed workforce), and how criminal justice reform is helping bring ex-offenders into the workforce and stemming recidivism.
In the coming weeks the Council of State Governments and the National Council of State Legislatures will be meeting, and I hope to get feedback from local attendees on any trending policy initiatives that could Delaware could see next year. Stay tuned.
by James DeChene
Last week had, and in the upcoming magazine will have, a write up on the end of session that wrapped up early July 1st. Not captured, however, were some of the more esoteric moments that helped make up the last six months that I’ve found interesting now that summer has officially begun and your friendly neighborhood government affairs professional has time to think.
Headed into January with over 20% new faces was both exciting, thrilling, nerve-wracking and (at least for me) a career first to work with so many new members. It’s been interesting watching them learn the ways of the building, finding out what issues they are passionate about, and how the State Chamber and our members fit in. The answer to the last point is a positive one from my perspective. Each of the freshman legislators I had the opportunity to work with were open to hearing how legislation would impact the business community, and while we may not have agreed after each conversation, it’s important to continue to build the dialogue and relationship going forward.
I was also impressed with the “temperature” of the building. It’s no secret the last few years ended in with tempers flaring as the time grew later and later into July 1st, and even beyond. This year (with hopes that next year will be similar) each Chamber was efficient in finishing up what they needed to do, and it was one of the earliest, and least contentious, endings to a session in recent memory. Let’s keep that particular streak going.
As I think back to the work that was accomplished in the last six months, I’m grateful for the partnerships that helped make it possible. The Association of Chambers has been the most active it’s been in years with almost every chamber of commerce actively participating. The State Chamber membership stepped up to help provide background, talking points, suggestions, communications and alternatives on key pieces of legislation this year. That streak will definitely need to keep going.
You’ll hear more from us in the coming months on priorities we’re pursuing, including cheaper health care options for businesses, innovative ideas on workforce development and training opportunities, as well as asks for help to keep up the pressure on the “old standbys” in minimum wage and marijuana legalization legislation. You’ll also be asked to provide your feedback on these and other issues as we shape our 2020 agenda. Until then, I hope you enjoy this bit of summer and that your AC continues to work.
Earlier this morning the General Assembly finished their work for the first leg of this legislative session. Items of note included a budget that set aside close to $125 million in reserves for future years, the largest bond bill in Delaware history, and a grant-in-aid bill with more money allocated than in recent years.
Of specific note for the business community are the bills that did not find their way to passage, although many will return in January. They include a minimum wage increase, a tipped worker minimum wage increase, and the legalization of recreational marijuana.
The Chamber continues work on a number of items into next year, including finding creative ways to lower health care premiums for small and medium sized businesses, investments in workforce development and training opportunities for unemployed and underemployed workers, and finding innovative ways to attract and retain high level talent for employers looking to expand and relocate here in Delaware.
The State Chamber thanks you for your engagement this legislative session and we look forward to working with you next year in making sure Delaware is the best place to live, work and do business.
by James DeChene
This week, the last of this session saw a few bills of importance to the business community being either introduced or worked. One is SB 71, a bill that would mandate that all future pharmacies run in Delaware be owned and operated by a pharmacist or an entity comprised of a majority of pharmacists. This would have serious impacts on the pharmacy, developer and construction industries in Delaware, as chain pharmacies, grocery stores and stores like Walmart and Target would no longer be able to run their pharmacies themselves, and would instead have to lease out space to pharmacists/pharmacist groups if they wanted one in their store. This would have a chilling effect on future development and expansion of these entities in Delaware, including potentially putting the kibosh on the proposed Wegmans in Barley Mill. The State Chamber and others have asked for the bill to be delayed until next year so that we can work toward a compromise. More to come.
Two bills involving tipped workers and minimum wage were introduced this week. One would raise the tipped worker minimum wage to 65% of the current minimum wage, and the other would govern how tips are reported and paid out by an employer. The State Chamber is currently reviewing these bills with industry organizations and representatives to judge their impact.
The Senate passed the Bond bill late Thursday night, totalling $816MM for FY19 and $862.9MM for FY20, where it now faces a vote in the House.
The General Assembly will meet on Sunday and into Monday as they finalize the last minute spending bills (bond and grant in aid) and work to get their last minute must-haves passed. Look for an update Monday on the big ticket items accomplished.
James DeChene is the Chamber's Senior Vice President of Government Affairs.