by James DeChene This week in Dover saw action in the Senate on a number of bills related to business. First, SS2 for SB50 directs money from the bond bill to be issued to DelTech, along with bonding authority, to help address the college’s deferred maintenance issues reported on before. The bill’s main difference from the original SB50 is the removal of the statewide property tax provision as a revenue source. Also in the Senate was SS1 for SB48, which mandates journeyman and apprentice craft training for those who work on publics works projects. The Chamber, ABC, Drive Delaware Forward, and others, worked unsuccessfully to modify the bill so that its passage would not adversely impact small businesses, or those businesses located where no training programs exist within reasonable distances (in some cases, apprentices must travel 80 miles each way to receive certified training). The bill now moves to the House where efforts to modify the bill will continue. Next week the General Assembly is out of session for JFC and Bond break. Upon their return, work will continue on criminal justice reforms, including the introduction of a revamp of Delaware’s criminal code. Stay updated on legislative issues through our Chamber Action Network video series as well. Sponsored by Ruggerio Willson.
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by James DeChene
Legislative Rosters! Rosters are here! For those interested in purchasing, please email Linda Walsh at lwalsh@dscc.com. This week a bill raising the purchase age of tobacco products passed the Senate, and now goes to the House to be heard in committee. The Chamber is in the process of reviewing the 19 criminal justice reform bills announced last week and the impact they may have on employers. More info to come. Next week we expect the Youth and Training Wage repeal bill to be heard in the House Economic Development, Business and Insurance committee on Wednesday at 2:30. If this bill impacts your business, please make plans to attend and comment. For more information on the bill, you can email me at jdechene@dscc.com. by James DeChene
This week in Dover saw the announcement of a 19 bill criminal justice reform package highlighted at a press conference Thursday. While the vast majority of these bills have yet to be introduced, we know several are designed to help those with arrests or records navigate an easier path to employment. One bill involves mandatory expungements for single misdemeanor offenses and for arrests with no conviction if no further offense takes place for 5 years. Another eases licensing requirements for electrical, HVAC and certain other professions requiring professional licensure. The Chamber has been supportive of those efforts in the past, and awaits review of the current language. It was a light week on the Senate side, as much of their business was put on hold due to a significant number of members out sick. We hope they feel better soon are able to make it back to Leg Hall for work. In the House, the National Popular Vote interstate compact passed and now is headed to the Governor for signature. The bill would change how Delaware awards its Electoral College delegates during a Presidential election. Current policy awards Delaware’s three votes to the winner of the popular vote in Delaware. The new proposal would award Delaware’s three votes to the winner of the national popular vote. This process would change once enough states (representing at least 270 electoral votes) agree to participate. Next week we expect the Tobacco to 21 bill (raising the age to purchase tobacco and e-cigarette products to 21) in the Senate. Also, we expect HB47, the bill to revoke the youth and training wage rates related to minimum wage, to be heard in the House Economic Development next Wednesday at 2:30 p.m. If your company would be impacted by this change, I urge you to come and make comment during the hearing to let legislators know how this would impact your business. by James DeChene
The General Assembly was back in session this week, returning from the Joint Finance Committee. This week in Dover, we saw two bills related to taxes tabled in committee. The first proposed a reduction to the realty transfer tax by 1% and the second would have allowed for itemized deductions in Delaware. Both are on hold for now. Also a bill on the National Popular Vote passed in the Senate. The bill is now headed to the House, and if passed there, it would enter Delaware into an interstate compact that would change how Delaware would award its Electoral College delegates. A new federal court ruling could require companies over 100 to report pay by gender starting as soon as May 31, 2019. For more info on the issue and the ruling, click here. by James DeChene
I’m still amazed at how Amazon decided to pack its virtual bags and abandon plans to build a headquarters in NYC. Not only does it showcase the hoops that businesses go through to relocate and bring jobs and development to a city or region, it’s staggering when you compare cost of living to other areas across the country. Case in point comes from a WSJ opinion article (PDF version here) from a restauranteur who moved his business from California to Nashville. Comparing cost of living in Arlington (the site of the headquarters building Amazon will build) to NYC to Nashville shows that compared to living in Manhattan, a $150,000 salary there translates into a 51.8% increase in purchasing power in Arlington ($229K) and a whopping 171% increase in purchasing power in Tennessee, to the tune of almost $410,000. All of this circles back to places like Delaware. We have a ton going for us—low cost of living, urban, suburban, rural and beach lifestyle choices, regionally located to all the places you want to visit but may not want to live, and access to a talented workforce that’s getting better by the day. The story also reinforces messages that the State Chamber and other groups have been offering for years related to permits and places like Middletown that get that timing matters. As we’ve heard from site selectors, 6 months for permitting is the sweet spot to get noticed by companies looking to relocate. Efforts continue to track permit status, made easier by DELDOT and DNREC websites created to do just that, but more can and will be done to perfect the process. Companies, and their C-suites, should be looking at what happened in NYC with Amazon, and should be making decisions based on how they’ll be received by local communities. The fact remains that Delaware is a bargain, and by continuing to make strides in making us more attractive, we’re in a better position to compete. by James DeChene
This year’s “Rich States, Poor States” was released this week, and Delaware checks in at 28th for economic performance, and 36th for economic outlook. Performance is calculated by considering state GDP, non-ag employment numbers and domestic migration. No surprise that we come in high (19th) in migration as we are a retirement destination state due to low property taxes and great beaches. For economic outlook, there are 15 areas considered, some in which we score well—no sales tax, low property tax; and some not so well—marginal tax rates on both individual and corporate payers, and average workers compensation costs. These numbers are right around where we were last year: 37th in 2017 and 44th in 2016, but 27th in 2014. In the broader picture, an interesting take away was how net migration will impact congressional seats in the 2020 census. According to Election Data Services, the following states are poised to gain seats: · Texas will gain three, from 36 to 39; · Florida will gain two, from 27 to 29; · Arizona will gain one, from nine to 10; · Colorado will gain one, from seven to eight; · Montana will gain one, from at-large to two; · North Carolina will gain one, from 13 to 14; and · Oregon will gain one, from five to six. These states are poised to lose seats: · New York will lose two, from 27 to 25; · Alabama will lose one, from seven to six; · California will lose one or remain even, from 53 to 52 or no change; · Michigan will lose one, from 14 to 13; · Minnesota will lose one or remain even, from eight to seven or no change; · Ohio will lose one, from 16 to 15; · Pennsylvania will lose one, from 18 to 17; · Rhode Island will lose one, from two to one; and · West Virginia will lose one, from three to two. The “Rich States, Poor States” report lays out these numbers as well, and ties in states' overall tax policy approaches to help explain the migration. If the trend continues, high tax states will continue to lose congressional seats. It will be interesting to see how that changes the makeup on Congress, and their approach to tax policy. by James DeChene
Before we get to what happened in Dover this week, a reminder that our networking event at the Delaware National Guard Joint Force Headquarters is a week away. This is your chance to:
And now onto Dover. This week the JFC continued to hold meetings hearing budget requests from state agencies. I attended the Departments of Insurance, Labor, and Natural Resources and Environmental Control (DNREC) hearings, and each secretary gave a good overview of what their offices are doing and plans for next year. A few items of note included the work the State Chamber, and others like ABC, DCA, Labor and legislators, have done to address issues related to the Workplace Fraud Act and how work is performed on construction sites. That work continues, and I’m thankful that we’re reaching consensus on some big issues that will have a positive impact on the industry and its workers. Of note from DNREC, Secretary Garvin made the announcement of a website launch in the coming month that will track permit applications made to the department. As you know, the State Chamber has been working with agencies like DELDOT and DNREC on streamlining their permitting processes to help development projects become 'shovel ready' faster. This tracking mechanism, apparently similar to what DELDOT has created, will show not only delays, or speed, from the DNREC side but also track if applications are missing data, causing a slowdown from the business side. More to come once the website goes live. Hope to see you next week at the Guard event. 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
This week’s focus in Dover was on two bills directed toward the 500 federal workers living in Delaware currently furloughed. The first bill, which passed both the House and Senate, allows these workers to petition the court to halt eviction and/or loss of insurance policies or automobiles due to non-payment for the duration of the federal shutdown and for a duration of 120 days after. It would also limit the amount loan holders could charge during this time period, capped at 6%, no matter the original loan terms. The second bill, which passed the House, but failed in the Senate, would provide furloughed workers the opportunity to apply for state backed, low interest loans. Also this week the Governor announced his recommended budget. Of note to Chamber members was the outlining of how a newly created infrastructure fund ($10 million dollars) would be managed, allocating $15 million to colleges and universities toward economic development initiatives; adding $7 million additional funding in the Bond bill to UD, DSU and DelTech, allocated for deferred maintenance; and setting aside $12.5 million to Delaware’s Strategic Fund. The General Assembly will be in recess throughout February as the Joint Finance Committee will meet to hold budget markup sessions. They will return March 5. by James DeChene
The bills that passed this week in Dover included an Equal Rights Amendment to Delaware’s constitution. The first leg of the amendment passed last year, in the 149th General Assembly, and the language contained in the amendment bars discrimination on the basis of sex. The House passed a measure allowing alcohol sales at the new 76’ers stadium, and the Senate passed a mini-bond bill providing more funds for capital improvements across the state. Each bill crosses the chamber to be heard next week. Also of note this week was Governor Carney’s State of the State address. The speech is used to review policies and initiatives this administration has put in place, and also serves as a blueprint for what will be this session’s priorities. The overview included a review of Chamber supported and implemented measures like the investment at the Port of Wilmington, passing the Angel Investor tax credit, the creation of the Delaware Prosperity Partnership, modernizing the Coastal Zone Act, and establishing Opportunity Zones all across the state to bring new jobs in places like Seaford, Newark, Dover, Milford and Claymont. New priorities outlined by Governor Carney included continuing to invest in broadband in Kent and Sussex counties, creating a new Transportation Infrastructure Investment fund to bolster economic development projects, and investing $60 million in education targeted a low income and English Language Learners and ensuring that all 3rd graders are proficient in reading at grade level. More to come as Governor Carney will release his recommended budget next week. |
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