THIS WEEK IN DOVER
by James DeChene
Several bills important to the business community were acted upon this week in Dover.
On Wednesday, Governor Markell signed HB235, the Delaware Competes Act, into law. As mentioned previously, the Chamber strongly supported this legislation that modifies how Corporate Income Tax is calculated, phasing out the multifactor apportionment calculation, and phasing in a single sales factor apportionment.
There was spirited floor debate on Sen. Marshall’s SB 39, legislation increasing the minimum wage. As amended, the bill would raise Delaware’s minimum wage from $8.25 by $.50 in 2017, and then again for the next 3 years, topping out at $10.25. A provision to index to COLA after 2020 was stripped out of the language in order for the bill to pass, and the final vote was 11-8. The bill now heads to the House, where it will be heard in the House Economic Development, Banking, Insurance & Commerce Committee. Stay tuned for more intel as the process continues.
A bill supported by the State Chamber, HB 253, which changes the earned income tax credit from nonrefundable to refundable and capable of exceeding the tax amount otherwise due. The credit is reduced from 20% of the corresponding federal earned income credit to 6% for 2017. That percentage increases 1% each year until it reaches 15% in 2026.
The House Administration Committee heard legislation creating paid Family Medical Leave of up to 12 weeks for state employees who have at least 12 months in their position in order to qualify. The Chamber has concerns with this bill, as it continues a progression of measures increasing the cost of public employees in Delaware.
MICROSOFT IS ENDING SUPPORT FOR INTERNET EXPLORER – WHAT DOES THAT MEAN FOR YOU?
by Will Alger, Systems Analyst, Diamond Technologies
If you go to Microsoft’s website, it reads “Beginning January 12, 2016, only the most current version of Internet Explorer (IE) available for a supported…” Then, you look over at the ‘What does this mean?’ section and it says “It means you should take action.”
What does that really mean for you, the employee?
You should ensure that your IE is updated to IE 11. Failure to do so will do a few things.
If you continue to read, it says “Internet Explorer 11 is the last version of Internet Explorer.” That was not a typo; IE is saying goodbye. If you are a Windows 10 user, you may have met the new browser, Microsoft Edge. That is the future of Internet browsing on Windows… Or is it?
Does this open the opportunity for Google to take over? In the latest survey of preferred browsers or is Microsoft Edge going to offer something that will bring everyone back to them? Chrome is preferred by 68% of computer users, while IE is at 6.3% That is yet to be seen…
Good morning, my name is James DeChene, Government Affairs Director for the Delaware State Chamber of Commerce. On behalf of the state of Delaware’s largest coalition of businesses we stand opposed to Senate Bill 39.
The Chamber does not reach this conclusion lightly, especially as Delaware’s economy continues to struggle in the aftermath of the Great Recession. While our unemployment rate remains below the national average, overall wages have not risen to where they were prior to 2009, and unfortunately, SB 39 does nothing to alleviate that problem, and in many ways does more to exacerbate the situation.
We believe that there are examples of the seriousness, and the aftermath, of proposals such as SB 39 that should serve as warnings to Delaware. Numerous articles have been written on the number of small businesses, especially restaurants, which have been forced to close their doors as a result of significant increases in the minimum wage. Areas such as Seattle and Los Angeles have seen such closures, as well as employers forced to roll back benefits, such as matching 401(k) contributions, in order to cover the costs of higher wages. In addition, close to home in Philadelphia, nonprofits that contract with the city say they can’t afford the new $12 per hour wage scale without help from the city. They want more money from the city or an exemption to allow them to pay less than $12 an hour. This was also the case in Los Angeles, where the very unions that pushed for an increase in the minimum wage then petitioned City Council for an exemption for their members to be paid lower.
On the employee side, articles have also been written about employees choosing to work part time in order to maintain their state benefits, even when full time work is offered.
What remains is clear, and has been evidenced by actions national level retailers have taken in recent months, is as the labor market continues to strengthen, the demand for workers will increase, and there will be a natural, market driven increase in wages.
Special consideration should be taken as to what this will do for our younger workers, currently the highest percentage of minimum wage earners in the state, as well as those with developmental disabilities. A marked increase in the minimum wage could serve as a barrier for those looking for first time employment, traditionally in areas such as food service, where these workers start to learn the soft and hard skills necessary to move up in the workplace. Impediments to youth employment, especially in our cities, will cause additional problems to be addressed. Speaking directly to those with disabilities, organizations like Waggies by Maggie, whose entire workforce is comprised of workers with intellectual disabilities will be forced to close their doors if faced with an increase in the minimum wage.
I would urge the members of this committee to consider an alternative measure aimed at low income workers, without suffering the employment losses that raises to the minimum wage are proven to have, which is to increase the Earned Income Tax Credit. It matches at the first earned dollar, and phases out as a worker hits an income threshold. The goals are the same, with positive outcomes.
UPDATE FROM DOVER
by James DeChene
The second half of the 148th Legislative Session convened on January 12th, with a full docket of legislation carried over from last year to parse through, along with new legislation requiring action. Right out of the gate, the House faced a Suspension of Rules vote, brought by Rep. Kowalko, to override Governor Markell’s veto of HB 50, the “Opt Out” bill the State Chamber has opposed. That vote failed 13-26, but the bill has been placed on the Ready List, meaning it can be brought up for a similar vote at any time.
In good news for Delaware business and overall economic development policy for the state, HB235, the Delaware Competes Act, passed the house last week with an overwhelming majority 36-2 with two not voting. The bill changes how corporate income tax is calculated in Delaware, changing from a multi-factor to a single sales factor calculation. Delaware is currently only one of nine states still using the multi-factor assessment, and the only one east of the Mississippi. This bill will ease the tax burden on companies looking to expand personnel and investments in property and infrastructure in Delaware, and has been endorsed by the State Chamber. The bill has its Senate hearing this Wednesday with a full floor vote on Thursday. It is expected to pass handily, and will be signed by the Governor.
Also this week will be a hearing on SB 39, a bill to increase Delaware’s minimum wage by $.50 a year between 2016 and 2019, and then by $1.20 a year until 2023, where it will be $15.05 an hour. The State Chamber stands in opposition to this bill for a variety of reasons, including the impact on small businesses and potential loss of full time jobs, as seen in locales such as Seattle and Los Angeles. The bill is expected to clear the Senate Labor Relations Committee, where it will be brought to the Senate floor for a vote, as soon as Thursday.
Plenty more to come in the coming months, so stay tuned.
The Delaware State Chamber of Commerce awarded its prestigious Josiah Marvel Cup Award to Delaware attorney O. Francis Biondi, on Monday, January 11, 2016 at the Chamber’s 179th Annual Dinner. The event, held at the Chase Center on the Riverfront, attracted almost 1,000 business leaders, elected officials and state dignitaries.
The award presentation—which is kept secret until the night of the dinner—was just one highlight in a night focused on the Delaware business community. The evening’s program included a keynote address by president and CEO of The Nemours Foundation, David J. Bailey, MD, MBA. In 2015 Nemours Children’s Health System celebrated the 75th anniversary of the first patient being admitted to the Alfred I. duPont Institute. Dr. Bailey talked about the statewide impact of the organization in Delaware. Nemours was the presenting sponsor for the State Chamber’s premier event.
The Marvel Cup Award was established in 1951 to honor a Delawarean who has made an outstanding contribution to the state, community, or society. The State Chamber’s highest honor is named in memory of the Honorable Josiah Marvel, who reorganized and was the first president of the State Chamber in 1913-1914. The award was originally presented to Marvel upon his retirement and has been imprinted with the name of each recipient. The identity of the winner is not announced until the award is presented at the Annual Dinner.
Mr. Biondi was the preeminent deal-maker and public policy attorney of his generation. At a time when Delaware’s economic future was in dire straits, Mr. Biondi was instrumental in putting together and passing the legislation to create Delaware’s Financial Center Development Act of 1981. Legislation that ultimately created over 30,000 jobs and put Delaware on a path of prosperity for over two decades.
Well versed in the “Delaware Way,” Mr. Biondi’s hallmark was his ability to reach across the aisle and collaborate. Respected and trusted by Governors, Legislators, and elected officials on both sides of the aisle, Mr. Biondi has served in many capacities to assist in the formulation, drafting and implementation of the most important State initiatives of the last several decades.
A successful attorney and dedicated family man, Mr. Biondi has been the recipient of numerous prestigious honors throughout his lifetime. His list of accomplishments and achievements is extensive. He has had a major impact on the community through his charitable work and has set the example for his peers.
Francis Biondi, Esq. was admitted to the Delaware bar in 1958 and has served as president of the Delaware State Bar Association and Delaware Bar Foundation. He has served as chairman of the Crime Reduction Task Force, vice chairman of the Delaware Agency to Reduce Crime, co-chairman of the Commission on Delaware Courts 2000, and a former Wilmington City Solicitor. Mr. Biondi was a Senior Partner of Morris, Nichols, Arsht & Tunnell LLP prior to his retirement in 2001.
by James DeChene
For those of you able to attend the 179th State Chamber of Commerce Annual Dinner, thank you. As attendees will recall, the message from the Chamber to business leaders and elected officials was a call to come together and collaborate on effective solutions to help turn Delaware’s economy around. Making mention of a time in Delaware’s history not so long ago, the late 1970’s and early 1980’s, Delaware was facing a similar bleak economic outlook. Lead, in part, by the efforts of the 2016 Josiah Marvel cup winner, Frank Biondi, the General Assembly passed the Financial Center Development Act, which placed Delaware on stable financial footing for much of the 1990’s and into the 2000’s. The subsequent increases in banking and financial service employees offset the decline in Delaware manufacturing over the years, to the point that without those employee numbers Delaware economically would be like West Virginia with a beach.
As we honored Biondi and his good works, parallels were drawn between that time and now, and the need for a General Assembly to put aside its political differences and make the difficult choices necessary to reshape and redirect Delaware’s economy. To that end, we have a good start to the second half of the 148th legislative session, as bipartisan legislation has been crafted to increase Delaware’s competiveness regionally and nationally incentivizing companies to increase their investments in personnel and infrastructure in Delaware.
This bill is a good first step. The “collaboration, time is now” message will be the Chamber’s clarion call this year urging regulatory and legislative initiatives that result in aggressive pro-growth, pro-economic development measures Delaware desperately needs.
by James DeChene
In many respects, the last few weeks for Delaware have been similar to the grieving process of losing a loved one. The familiar has been replaced by uncertainty, and there is difficulty imagining a future without the comforting steady presence of an entity that has been an integral part of so many lives in this state.
If you’re like me, coming from a family that was literally and figuratively sustained by DuPont (both of my grandfathers were engineers, one in Seaford and one in Wilmington, who helped put me through college) the news of a reshaped, renamed, rebuilt, co-branded DuPont came as a shock, even though the signs were there that things weren’t as rosy as we had hoped.
For now, the uncertainty is still at the forefront. What happens now? What will the impact be to downstream businesses, non-profits and other groups that rely on DuPont and its employees to help meet their own bottom lines? What will a revamped Dow-DuPont look like in Delaware, with specialty products remaining and a strong bid to keep the agriculture business here to come?
Just like the steps in the grieving process, we move on. We learn to accept that while we don’t, and won’t, have what once was, we have choices. To cherish the memory, find ways to grow from the experience and focus on positive new steps, or to wallow in self-pity and tarnish those happier times.
We are far from the heyday of 30,000 DuPont employees in Delaware, and we’ve survived, and made changes that have seen the state flourish. Most notably we are world renowned in the banking and financial services industries. There is more to Delaware than one company and its history, as rich as it is.
The time is now to work together to create opportunities for new business and investment in Delaware. In order to be successful the three major constituents—business leaders, elected officials and nonprofits—must work together for the bottom line. We must champion pro-growth economic development policies that brings jobs to Delaware and we must remember that change is not always bad.
by Mark DiMaio
As we kick off 2016, the Chamber’s newly formed Economic Development Committee prepares for action. The Committee’s mission is simple: Enhance the quality of life and raise the standard of living for all Delawareans, and work in collaboration with Delaware communities and stakeholders; Promote polices that facilitate the expansion of existing companies; Act as a key resource for businesses considering locating in Delaware and advocate for strategies that expand the tax base and create higher-income employment opportunities.
Committee Chairman Mike Vanderslice, Vice President of Environmental Alliance, Inc., believes the committee will be productive in finding actionable policy solutions to drive economic expansion.
“As a life-long resident of Delaware, I have a vested interest in a healthy local economy. I’m committed to working with Economic Development Committee Members and with other State Chamber Committees to identify actionable initiatives that will enhance economic growth. In light of recent announcements, it is imperative that the business community (small and large) pull together to cultivate solutions to keep Delaware moving forward.”
The Committee will work with the Delaware Economic Development Office (DEDO), County and City Economic Development Offices, as well as local chambers, to promote policies and strategies that support existing industries and foster a climate that attracts new and innovative business to Delaware. A formal kickoff committee meeting will take place in late January or early February.
by James DeChene
Chamber Committee meetings have already started in 2016. With the General Assembly set to convene on January 12th, the Chamber’s policy committees are poised for action. Topics include the Healthcare Committee working to educate employers about the increase in narcotics/heroin addiction in Delaware, reducing the stigma of addiction, what signs to look for in employees and various treatment options available. Look for a spring event panel discussion to learn more. The Tax Committee will be looking at ways in which to help make Delaware more attractive for businesses to relocate to and expand in Delaware, and will be reviewing tax related legislation and regulations as they are drafted to provide feedback. The Transportation and Infrastructure Committee will be looking at the drafted Water Usage Fee bill that was created as the result of a Clean Water Taskforce. Chamber members have been participants on that taskforce and have provided industry knowledge to help craft the bill. The Employer Advocacy and Education Committee is expected to meet soon to discuss various labor legislation including an expected bill to increase the minimum wage in Delaware to $15 by 2023. The Environmental Committee will be having their spring event with a speaker TBD, and with potential changes to the Coastal Zone Act this year, they will undoubtedly have feedback to offer as well.
For more information on how to participate on a committee, contact James DeChene at email@example.com.