by James DeChene
A recent article highlighted 2 dozen businesses leaving California in the wake of the passage of Prop 30, which amounted to a $6 billion increase in taxes in the Golden State. A recruitment drive by neighboring Arizona, which boasts lower taxes, a streamlined permitting process, and a reduction in other business regulations, has led to an influx of 50,000 people moving into Phoenix in the last year, while California has seen a net migration of 100,000 leaving the state. Other contrasts include California considering another paid holiday for state employees, while Arizona has placed a moratorium on new business regulations. While California ranks dead last by the Small Business & Entrepreneurship Council, Arizona is ranked 8th, and Delaware is 34th.
There are important takeaways applicable to Delaware from the linked-to article and study. Namely that as the General Assembly focuses its attention on expanding regulations on businesses and expanding benefits to state employees, instead of focusing on how to make Delaware more attractive for businesses not just to incorporate but to relocate here, other states are going to continue to eat our lunch.
by Mark DiMaio
Delaware’s projected state revenues have deceased by an additional $26 million over DEFAC’s September 2016 revenue forecast. DEFAC now projects that state revenues for the 2017-2018 fiscal year will be about $200 million dollars less than the current 2016-2017 fiscal year. The decreased revenue projection to $3.9 billion equals about 5% less than the $4.1 billion being spent during the State’s current fiscal year. In addition to the decrease in projected revenues, the cost of state government is projected to increase by $150 million dollars with Medicaid spending, state employee health care costs and increased school enrollment driving the escalation in state spending.
The DEFAC report points to flat revenue growth for upcoming fiscal years, which could lead to an annual cycle of seeking revenue enhancements. Even if Delaware can successfully restructure its future revenue portfolio, state spending could outpace new revenues. Delaware’s murky fiscal picture has been static for the past several years, with many elected officials focused solely on generating and increasing revenues to the state. If Delaware has finally reached a fiscal crossroads, maybe it’s time to take a serious look at state spending. The old playbook of raising corporate franchise taxes, raising gross receipts taxes and many other fees may not be sustainable. At some point, companies that incorporate here may seek out other states or nations for incorporation. The sky isn’t falling but sticking to the same formula of increasing revenues without serious consideration of reducing state spending will not be viable in the long term.
by James DeChene
Earlier today (December 15, 2016) United Health Foundation released the 27th America’s Health Rankings Annual Report. As the longest-running annual assessment of the nation’s health on a state-by-state basis, the report showcases positive trends in the health of the nation, as well as concerning upticks in several key indicators.
Among the report’s findings:
Also of note, is that Delaware ranks 47th in the number of dentists per capita and 17th in the number of primary care physicians. Recently the debate over DIMER/DIDER funding has reemerged as an important budget issue for the state. DIMER/DIDER reserve slots for Delaware applicants only at Sidney Kimmel Medical College, Philadelphia College of Osteopathic Medicine, and the Maurice H. Kornberg School of Dentistry at Temple. Delaware applicants only compete against other Delaware applicants for admission to reserve slots – not against the universe of applicants. For example, at SKMC, Delawareans have a 1 in 4 chance of being admitted to their reserved slots. The odds for applicants from any other state being admitted are approximately 1 in 40.
Please refer to the America’s Health Rankings website for additional information.
The 6th Annual Taste of Delaware, held fittingly on Delaware Day in Washington, D.C., featured more attendees than ever, with food and beverages from around the state on display. The event, hosted by the State Chamber along with honorary host US Senator Chris Coons, highlights Delaware companies, like Dogfish Head, Painted Stave Distillery, SoDel Concepts and Sea Watch, along with culinary students studying at Delaware Technical Community College and Delcastle Technical High School. With over 600 attendees this year and 25 featured vendors, the annual Taste of Delaware is an opportunity for DC insiders to mix with Delawareans and bond over what Delaware has to offer.
This year, cameo appearances were made by Senators Carper, Coons and Durbin (IL), Congressman and Governor-elect Carney, and Blue Rocks mascots Rocky and Mr. Celery. Most notably, a special visit was made by Vice President Biden, coming from his earlier tribute event held on the Senate floor. The VP spoke for 15 minutes covering a range of topics—thanking Delawareans for supporting him when he needed it most following the passing of his first wife, and later his son Beau; reflections on his start in politics; the challenges the US and the world has faced during his career; and a call for Democrats and Republicans to come together, in the Delaware Way, to help support the new administration.
The State Chamber would like to thank the vendors for their participation. We would also like to thank everyone who made the trip to Washington from Delaware, who help make this event successful. Finally, we would like the recognize and thank Senator Coons and his staff, both in Delaware and in D.C., for their help in planning and day-of help in ensuring this year was the best event yet. Until next year.
by Mark DiMaio
On Monday November 28th, Delaware Technical Community College, Delmarva Power and Exelon hosted a “Partnerships for Pathways” event at DelTech’s Sustainable Energy Training Center (Stanton Campus). The event featured guest speakers Governor Jack Markell, Governor-elect John Carney and Exelon’s David Velazquez. Gary Stockbridge, President, Delmarva Power moderated a panel discussion highlighting the Pathways to Prosperity program’s newest education tract – the energy efficiency pathway. The new pathway provides Delaware high school students the opportunity to learn competencies and skills to succeed in the expanding energy efficiency industry. Students enrolled in the energy efficiency pathway will learn terminology and concepts in the classroom. A key component of the training is applying learned concepts and this spring, students will gain hands on experience at Delaware Technical Community College’s energy laboratories. Delmarva Power provided a $720,000 donation to partially fund the new energy efficiency pathway.
The new pathway will help fill the local demand for jobs in energy efficiency industry. During the panel discussion, David Small, Secretary of Delaware Natural Resources and Environmental Control, stated that 250 sector jobs could be created the next few years. The Delaware Pathways to Prosperity program now offers 12 career training programs, including culinary arts, manufacturing, finance and computer networking and programming, with over 5,000 students participating in the programs. The Pathways to Prosperity program kicked off just two years ago with major support from the Delaware Manufacturing Association and Delaware State Chamber of Commerce members.
by James DeChene
Last week news broke that the Diamond State Port Corporation has agreed to purchase the Edge Moor facility from Chemours in an effort to expand the Port of Wilmington, which is nearing its capacity. The State Chamber has supported expansion at the port to take advantage of Delaware’s attractive position in the mid-atlantic region—able to take advantage of the channel, close to the majority of the country’s population, proximity to rail and an interstate highway system that’s a direct pipeline to Chicago and points west. In fact, port expansion was featured prominently in the Delaware Business Roundtable’s Growth Agenda as a driver towards long term economic development and sustainability for the state.
This week in the Governor’s office, two businesses were recognized for their support of the military and veterans through their hiring practices and engagement in the community. Started as an effort by the Joint Military Affairs Committee, featuring a partnership by the State Chamber, New Castle County Chamber, and in conjunction with the Central Delaware Chamber’s Military Committee, the Warrior Friendly Business award is presented each year to a small and large business going above and beyond to ensure those in active duty, or returning from duty, have a job to come home to. Memorialized each year on a plaque prominently displayed in the lobby where visitors to our Governor can review their efforts, this year’s winners were Mission BBQ (small business winner), and JP Morgan Chase (large business winner). Many congratulations and thanks to both winning companies.
You may have seen last week a request from the Division of Revenue looking for feedback from those who use their website to make payments. They are in the process of starting to upgrade their site and online services provided, and are looking to the business community for assistance. There is a survey to take, as well as a small group to be formed to provide feedback as well. If you are interested in meeting with DOR representatives, please contact me. To take the survey, visit: https://revenue.delaware.gov/forms/EDI_Survey.shtml
by Mark DiMaio
The 9th Annual Vision Coalition Conference took place on Monday, November 14th at the University of Delaware’s John Clayton Center. The conference brings together school leaders, educators, elected officials, non-profits and business leaders to focus on improving Delaware’s education system. This year’s meeting theme centered on working to “close the achievement gap” for the state’s disadvantaged and special needs children.
Keynote Speaker, Paul Reville, a Harvard University professor, focused his remarks on addressing persistent achievement gaps especially for students who face hurdles to learning. Professor Reville theme of “all means all” asked stakeholders to focus on policies that ensure that every student can access a quality education.
During the conference, attendees participated in small-group discussions on how Delaware can to a better job of connecting schools to government agencies and nonprofits that provide services linking students and families to health care, language training, shelter and food. Many Delaware teachers are left to assist their student personal issues while still trying to teach. Other discussions concentrated on the state’s decades-old school funding system and the need for increased funding for schools serving students in poverty and English-language learners. There was also the realization that continued tight state budgets with a projected revenue shortfall could limit state funding to address additional student needs.
Dr. Dan Rich, University of Delaware Professor of Public Policy, was awarded the Order of the First State by Governor Jack Markell. Professor Rich received the award for his tireless work to improve education for all Delaware students and service to his fellow Delawareans.
by James DeChene
The impact of the 2016 Election Day results will continue to resonate for the remainder of the year. Above and beyond the obvious implications of Republican Executive and Legislative branches federally, here at home, Delaware has a Senate where a special election in early spring 2017 will dictate which party has control for the remainder of the 149th General Assembly.
The pressing issues, however, remain. A major budget gap expected to be somewhere north of $300 million. An education system in need of reform in order to adequately prepare students for a career. A number of abandoned industrial sites currently sitting vacant, with limited prospects of seeing repurpose into economic development. An aging infrastructure system lacking dedicated funding to maintain, let alone expand, including road, rail, and clean water.
The good news is that I believe that our elected officials in Dover have the ability to make the difficult decisions necessary to help set Delaware on a course of growth. If we take nothing else from this election season, I believe that citizens expect to be engaged by their elected officials to outline the important issues and challenges we face. By doing so, our elected officials will find they are given a large measure of leeway to act in the interests of their constituents by making what are admittedly tough choices. Examples can be seen in Wisconsin, Michigan, West Virginia and other states where sitting by no longer remained an option for their respective legislatures.
The problems Delaware face are no different than our surrounding states, or many across the country. It is our size and ability to work together to tackle big problems that set us apart. It is my sincere hope that the next General Assembly and Governor work together, and by doing so continue to be an example to other states.
By James DeChene
On November 8th, Delawareans will head to the polls to choose candidates who will face big issues in 2017, both in Congress and here at home. Focusing on Delaware, the next Governor and General Assembly will tackle how our state government raises and spends money, on what programs and services the government will offer, and how to continue to build upon the recovery from the Great Recession. There are no easy answers to these issues, as has been documented in this space over the last months, yet the important issues of long-term economic stability, making Delaware an attractive place for businesses, and properly preparing Delaware students for the workforce remain.
Election Day is your opportunity to help shape the path of Delaware’s future. As Chamber of Commerce members, you are invested in this state, both professionally and personally, as are your employees. The decisions you make next Tuesday in the voting booth will have a direct impact on your life here in Delaware. While you may be suffering, as I certainly am, from election fatigue, I urge you to take the time to learn about the candidates in your district and make an informed decision on November 8th.
James DeChene is the Chamber's Senior Vice President of Government Affairs.