By James DeChene, Armitage DeChene & Associates What a difference a year makes. At this time last year, concerns that Delaware could expect to see incredible revenue losses due to COVID-19 had a significant impact on not only the budget crafting process but also in how the Delaware Economic and Financial Advisory Council (DEFAC) approached its economic forecasting for much of 2020. This year, as was reported at the May DEFAC meeting, every single company that recently went for an Initial Public Offering (IPO) was a Delaware registered company, which increased Delaware’s corporate franchise tax revenue by 13 percent. In addition, realty transfer tax revenue was up 42 percent due to a housing boom, especially at our beach areas. While neither of these increases are sustainable, they do provide significant one-time money for infrastructure investment to help position Delaware for a strong future. The Delaware State Chamber of Commerce has a history in advocating for infrastructure investment, including supporting legislation like HB200. This bill invests heavily into water and sewer projects, supporting changes to the Transportation Trust Fund to ensure more dollars are dedicated to project spending versus operational budgets within DelDOT, broadband development across the state, and more. The simple reason for this advocacy is the intersection between government spending, economic development, job creation, and return on investment (at the end of the project you have a tangible, bright and shiny “thing” that provides a needed service or function).
Delaware finds itself in a unique position this year. Significant increases to the bond bill above and beyond the Governor’s recommended budget, combined with close to one billion dollars in federal money stemming from the American Rescue Plan, means that there is an opportunity to invest heavily in Delaware’s future. With smart spending and keeping in mind that these are two separate pots of money, the State can maximize its investments. The federal stimulus money has a fairly narrow scope of authorized uses—though the hope is that with the pending public comment period, Treasury will ease some of those restrictions. Much of what is currently authorized with federal stimulus money are areas in which Delaware still needs help. This includes broadband development in urban and rural areas across the state and repairing aging water and sewer infrastructure, which can be everything from stormwater remediation in New Castle County, persistent coastal flooding in Sussex, and drainage repair in much of Kent. The State’s bond bill can be much more creative in how it allocates money and starts filling the backlog of projects that have been considered for years. Projects like building new court houses, schools, and even perhaps leveraging the recently passed site readiness funding money to help attract new sectors to Delaware are all on the table. With state money, new train stations in Newark and Claymont have been built. Maybe now is the time to direct investment to extending Delaware rail to connect with MARC for better regional travel. Perhaps investing in broadband can help create a tech corridor along that line that connects Delaware to Philadelphia and Baltimore making the region an attractive alternative to Silicon Valley.
The possibilities of what can be built here may not be endless, but they are indeed significant. Now is the time for Delaware leaders to look to the future and continue shaping Delaware as a regional leader. The clock is ticking on the three-and-a-half years we have to allocate the federal stimulus money. Direct and nimble approaches to project development will be key, and state and local governments will have to work together to maximize this opportunity. The State Chamber’s continued calls for permitting reform at the state and local level will continue to grow in volume, as projects will not have the ability to take 18 months or more from conception to groundbreaking.
Delaware’s size should make it a giant amongst its neighbors if we can effectively combine smart investments with effective permitting and development opportunities. Like the COVID-19 pandemic, this is (hopefully) a once-in-a-lifetime event and we should take every step to make it count.
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By Tyler Micik The State Chamber’s Infrastructure and Transportation Committee met on June 28th for the second round of discussion around ideas on how the State could invest the additional $1 billion or more it's set to receive from the federal government. Committee members talked about the potential of creating a multi-flag university center in the City of Wilmington. Mayor Michael Purzycki joined the conversation and welcomed the idea, stating that schools are key to improving Wilmington’s social infrastructure. Other ideas discussed included making DE Route 1 an Interstate Highway, establishing Transportation Improvement Districts (TIDs) and Complete Community Enterprise Districts (CCEDs), supporting site readiness/environmental remediation, achieving 100% broadband access, and revising the Farm Preservation Act. Building a parking garage in Rehoboth and Lewes and making I-95 an innovation corridor were also mentioned. The committee will meet again in mid-July to discuss these proposals and more. The State Chamber plans on using these ideas to curate a list of recommendations, which will be presented to the Governor at our Developing Delaware Conference on October 14. If you would like to join the conversation, please contact me at tmicik@dscc.com or call (302) 576-6590. The ideas listed above do not represent an official State Chamber position. They are a compilation of the thoughts shared during our meeting as we continue to develop formal recommendations. By James DeChene, Armitage DeChene & Associates
The General Assembly finished its first round of the 151st Session early in the morning July 1st. Much like last year, the work performed was largely conducted virtually, but with a much larger breadth and scope of legislation considered this year than during the height of COVID-19 in 2020. That work included many bills we supported such as bills around our top priority of workforce development, passing the Clean Water Act — which the State Chamber has been working on for roughly four years — and a site readiness fund. Others bills that passed and impact businesses include increasing the minimum wage and expanding the plastic bag ban. It’s important to note that for bills that did not pass this year — like the legalization of recreational marijuana and Paid Family Medical Leave -- those bills remain “live” and will be worked on next year. A brief overview of bills that passed are:
SO WHAT HAPPENS NOW? Beginning late this summer and into fall will be the continuation of the State Chamber’s member-to-member meetings. These meetings are between Chamber members and members of the General Assembly. They consist of office visits or facility tours to showcase not only your business but also share how your company works and the impact various legislation will have on your bottom line. With the large numbers of newly elected members who have yet to meet many of their constituent businesses due to COVID-19, these conversations are more important now than ever. These meetings will continue to highlight important pending legislation that will be worked on next year like: HB 150, legalization of recreational marijuana; SB 1, the Healthy Delaware Families Act; HB 205, Delaware EARNS Act; HB256 which will raise income taxes; and HB 94/HB266, which is related to tipped wages, will be considered next year. All of these bills have a direct impact on Delaware employers. The General Assembly will be on recess until this fall when votes on redistricting will begin. The impact of redistricting will play a major role in the next 10 years of Delaware politics and policy, and always has the potential to see a few new faces. It’s largely believed that lower Delaware will pick up a House seat. It’s also probable a Senate seat will be moved from New Castle County to either Kent or Sussex. Then, in January, the second leg of the 151st Session will begin, which is also an election year. By James DeChene, Armitage DeChene & Associates
Both the budget and supplemental spending bills passed this week, paving the way for a bond bill that will be a record breaking $1.3 billion. Added to that number is roughly another billion dollars in American Rescue Plan dollars, which can also be used to invest in infrastructure projects. Other bills that saw movement were:
There are two legislative days left in this session with more to come. By James DeChene, Armitage DeChene & Associates
This week the main event in Dover was the passage of SB15, increasing Delaware’s minimum wage to $15 by 2025. Of the nine amendments attached to the bill, none passed. The bill now goes on to the Governor for signature. Also this week, HB200, a Chamber-supported bill related to water infrastructure investment, was released from Committee and is expected to be on the Senate agenda for a vote next week. SB127, another Chamber backed bill that would create a site readiness fund to offset the cost of development, is waiting for a House vote. HB77, which the Chamber opposes, is the latest version of legislation that would ban certain chemicals used as flame retardants in many consumer goods such as mattresses, consumer electronics, and upholstered furniture, was released from Committee. The sponsor has said he does not plan to work the bill for a House vote until January 2022. There are just 5 legislative days left before the end of this session. Plenty of bills remain active and await action, including bills impacting the use of apprentices on construction projects to creating a new community solar program. A lot can happen between now and June 30. Stay tuned for more updates. By James DeChene, Armitage DeChene & Associates
This week, the General Assembly continued its work before it ends in eight legislative days. Of note, the HB150, the bill to legalize recreational marijuana, was moved to next week to be voted on in the House. SB2, a bill to create a community solar program, passed the Senate. Other bills that saw action this week: HB205, a bill to create a State-run IRA retirement program, was released from committee and now goes to the House appropriations committee before it will receive a House vote. Also, two amendments have been placed with SB15, the minimum wage bill. One would extend the implementation period by one year, and the other would freeze the bill at $13.25 in 2024. The rest of June is starting to stack up. Yet to be voted on is the aforementioned HB150, SB15, and HB205, along with other pending bills related to business. By Tyler Micik The General Assembly returns next week. With only 11 session days remaining, there are many bills still pending. The issues discussed and voted on in the coming days will impact businesses large and small across a variety of industries. Some of which includes:
The State Chamber has been engaged in discussions regarding these proposals and others throughout the legislative session and actively communicates concerns with members of the General Assembly. We will continue to do so as the session comes to an end. While next week’s committee meeting schedule has in large part not been announced yet, SS1 for SB 65 — the State Chamber supported Focus on Alternative Skills Training Program (FAST) Act — will be heard by the Senate Labor Committee on Wednesday, June 9 at 1pm. The bill would provide tuition assistance to Delaware residents who have obtained a high school diploma and have enrolled in an approved skills training program. The State Chamber will be in attendance to provide testimony in support of the bill, but we also encourage our members to also testify. Also next week, Representative Peter Schwarzkopf and Senator David Sokola will talk about some of these issues and other top issues before the General Assembly at our End-of-Session Policy Conference. Click here to register. If you have any concerns, questions, or feedback about any of these proposals, please contact me at tmicik@dscc.com or (302) 576-6590. You can also submit your feedback on our website here. Along with leaders from the business community, the State Chamber’s Infrastructure & Transportation Committee met last week to discuss recommendations on how the State should invest the additional $1 billion its set to receive from the federal government. As Bob Perkins of the Delaware Business Roundtable put it, and I’m paraphrasing, “These are unprecedented times, it’s raining money in Delaware and the business community has a real opportunity to provide input that will shape the future of our state.” This is pivotal moment in Delaware’s future. The decisions made on how to invest these funds will have an impact on businesses, their employees, and all Delawareans. Leaders offered several ideas such as funding site readiness and infrastructure projects, creating a multi-university center, and achieving 100% broadband coverage across the state. The State Chamber plans on offering recommendations to the Governor who is seeking feedback from the business community. The State Chamber is uniquely positioned to bring all parties to the table. Together we can find solutions and offer ways to create jobs, promote business, and improve the quality of life for all Delawareans. If you have any recommendations and would like to be part of the conversation, contact Tyler Micik at tmicik@dscc.com or call (302) 576-6590. The Delaware State Chamber is excited to welcome our newest team member, Regina Donato who will serve as the program and communications manager. In this role, Regina's talent and energy will assist in the execution of events and communications strategies. GET TO KNOW REGINA: Where are you from? I was born and raised in North Wilmington, Delaware. I graduated from Concord High School in 2017. Raiders together, raiders forever! You’re graduating from the University of Delaware this weekend. Congratulations! What did you study? During my time at the University of Delaware, I majored in Media Communication and minored in Advertising and Sport Management. I graduated a semester early, so I finally get to walk (in person!) this weekend! What most excites you about this position and working at the Delaware State Chamber of Commerce? I’ve lived in Delaware for the majority of my life, so having the ability to give back to my community in some way is such an honor. I didn’t previously know much about what chambers of commerce do previous to starting my position here, but my first week already has me incredibly excited to get to know State Chamber members and the community. This is my first job out of college, so I’m looking forward to asserting myself professionally and gaining experience in the communications field. You’ve had several internships before joining the State Chamber. Which was your favorite internship and why? During my last full semester at University of Delaware, I had a marketing internship with the Delaware SPCA. Not only did I receive a crash course on the inner workings of a nonprofit for the first time but I also got to play with dogs and cats as a part of my job! I really enjoyed finding new ways to creatively market animals available for adoption, especially the long-term residents. As an animal lover, nothing is more rewarding than seeing one of your favorite dogs find their forever home! I also hold a game day staff position with the Philadelphia Eagles, which has taught me so much about customer service! They’re my favorite sports team, so working with them has been such a pleasure. Do you have a favorite quote? A favorite quote of mine is actually one from a lesser-known Beatles song, I’ll Follow the Sun. The lyric, “But tomorrow may rain so I’ll follow the sun,” has always stood out to me. I always try to follow the “glass half full” mentality in both personal and professional settings. Optimism inspires me into action so I can productively tackle any task in front of me. What do you love most about Delaware? Growing up, I didn't appreciate how small size of Delaware. Every venture to the grocery store or the mall resulted in seeing at least someone’s mom or a person from high school. However, the older I get, the more I like the small and intimate nature of the First State. Studying at UD with many out-of-staters only made this sentiment stronger. I also love our incredible state parks system and the plethora of opportunities they provide to get outdoors. The state parks system were a life-saver for me during the peak of the pandemic. Do you have a favorite Delaware spot? My favorite place in Delaware is definitely the Point at Cape Henlopen State Park. For the majority of the year, the north end of the park is closed due to endangered bird nesting. Come September, the Point opens for surf fishing and drive-on access. It’s something my dad and I have done together for years. Sunsets there are unbeatable, and you can see both the Harbor of Refuge and Delaware Breakwater lighthouses at once. What podcast are you listening to right now? I love listening to the Office Ladies podcast. If you're a fan of The Office, this is a fun listen during your drive to and from work. Each week, Jenna and Angela (cast members from The Office) will break down an episode and give exclusive behind-the-scene stories that only two people who were there, can tell you. By James DeChene, Armitage DeChene & Associates
It was a busy week in Dover. Monday was the Delaware Economic and Financial Advisory Council's (DEFAC) May meeting. The Council revised its revenue forecast to add an additional $429 million dollars split between FY2021 and FY2022. In large part this comes as a result of conservative forecasts during prior meetings, and the COVID-19 pandemic not having as large an impact on revenues as predicted. The current forecast only takes into consideration stimulus money received in calendar year 2020, so the current American Rescue Plan impact has yet to be calculated. With many capital and infrastructure improvement projects planned using this stimulus money over the next two years, expectations are that Delaware will remain on secure fiscal footing, barring any extravagant spending by the General Assembly. Currently concerns remain low that inflation will play a large impact, though it was note the cost of consumer goods and commodities are on the rise. In the General Assembly two State Chamber priority pieces of legislation saw movement this week.
Also of note this week was the release of SB93 from Senate Banking, Business and Insurance Committee related to auto-renewing or “Evergreen” contracts. The bill, among other things, establishes notification requirements from businesses to consumers that a contract is set to auto renew. Two amendments have been proposed, but have yet to be attached to the bill. HB91, which establishes the definition of “unfair practice,” was also released from Senate Banking, Business and Insurance Committee. As previously noted, this bill was one where the Chamber, and other groups, weighed in to achieve a compromise amendment. This bill is now headed to the ready list for a full Senate vote. The General Assembly will be out for the next two weeks for budget markup, and will return the week of June 7. |
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