DSCC Tax committee update
By Tyler Micik
The Tax Committee met earlier this week and discussed several key issues and policy proposals that will not only impact the business community but all Delawareans. Three particular issues discussed were a minimum wage increase, personal income tax, and Secure Choice.
There has been increased talks to raise Delaware’s minimum wage to $10.50 in 2022, with yearly increases reaching $15 by 2025. The reality of this proposal is that it may in fact hurt the people its intended to help. Many businesses, especially small business, have been disproportionately impacted by the pandemic and are still struggling to survive or recover. An increase in the minimum wage could cause some employers to lay off employees and, in some cases, close their doors permanently. A proposal to increase the minimum wage would be more palatable to some business owners when Delaware’s unemployment rate reaches a more reasonable rate such as 3.6% versus the current rate of 5.3%.
HB64 would create new personal income tax brackets for high earners, starting at 7.1% for those making $125,000 and topping out at 8.6% for those earning $500,000. The State Chamber's tax committee believes this bill would put Delaware at a competitive disadvantage when it comes to attracting new business and residents from surrounding states. Delaware is not facing a budget crisis, which would justify such an increase. Moreover, this bill comes at a time when Delaware businesses and employees face unprecedented uncertainty due to the COVID-19 pandemic.
Secure Choice is a proposal by State Treasurer Colleen Davis that would create a State-run IRA program. The plan is projected to cost approximately $400,000 to implement. According to the Treasurer, the program would be designed for any employer that doesn’t already offer their employees a retirement plan and employers who offer a preexisting plan would be exempt from participating. Employees would have thirty days from their date of hire to either enroll or opt out of the plan. The plan would follow the employee if they relocated or changed jobs.
The Chamber is looking for feedback from members on how any of these proposals may impact your company or employees. Please direct feedback to Tyler Micik at firstname.lastname@example.org.
By Tyler Micik
Advocating for Delaware’s business community – YOU! To the State Chamber this is more than just a phrase. It’s our mission. But in order to be successful in that mission we need to hear from you. Every member large or small has a voice, and our voice is stronger together. Our committees are your opportunity to be heard, learn about policies and issues that affect you, play an active role in shaping legislation, and to connect with other industry leaders.
In 2021, the State Chamber will be expanding and reengaging our nine committees. Our committees serve as the State Chamber’s policy incubator and idea generator. To generate great ideas, we need active volunteers – you. That’s why we have and are working to increase diversity and participation across the state on our committees.
The Ready in 6 Initiative is proof that ideas are born and progress emanates when great minds meet to discuss the issues affecting their businesses. That’s the task our committees are faced with in 2021. To be proactive and not just reactive. To talk not only about current policies but to also discover and identify the hidden day-to-day problems your businesses are facing on a variety of topics such as hiring/retraining, workforce development, health care, the environment, and taxes to name a few.
Also new in 2021, will be the addition of our technology committee. It goes without saying but technology has become increasingly important and is vital to the way we live and work. The technology committee will focus on issues such as data privacy/security, IT training/development, and automation.
In addition to greater diversity and participation, our goal is to give our members a more significant voice and greater communication. This begins by having regularly scheduled meetings as well as redesigning the committees’ section on our website. Our priority is you and our mission, to lead the conversation, generate new ideas and create change that benefits you our members and your employees.
Exciting things are happening within our committees as we begin 2021. Join the conversation by participating on a State Chamber committee.
By James DeChene, Armitage DeChene & Associates
The Delaware State Chamber of Commerce respectfully offered a number of policies to the 151st General Assembly that, if enacted, would assist the business community in rebounding from the impact of the COVID-19 pandemic, while at the same time help Delaware workers find new opportunities.
TAX CREDIT FOR RAPID WORKFORCE TRAINING & REDEPLOYMENT INITIATIVE HIRES
This past summer, Governor Carney issued Executive Order #43, which established the Rapid Workforce Training and Redeployment Initiative, a time compressed curriculum to be focused on in-demand industry sectors and/or occupations. The program will make available certificate programs, certification programs and access to the Today’s Reinvestment Around Industry Needs (“TRAIN”) program to help prepare Delaware workers who may have been displaced by the impact of COVID-19 find a new career path. The State Chamber recommends a refundable tax credit be made available to employers who hire graduates from these programs much the same as the credit for hiring veterans and those with disabilities.
ENGAGE IN CREATING PROCESS-RELATED EFFICIENCES IN OVERSIGHT AGENCIES
In recent years the State Chamber has focused on the process log jams that serve as impediments to development in Delaware. By working with agencies like DelDOT, the Chamber worked to streamline plan review process, resulting in simple project submission documents for a number of common projects, like curb cut-outs and driveway access. The Chamber has commitments from DelDOT to continue to find ways to streamline these processes, and now will be working with DNREC to do the same. These partnerships serve to find innovative solutions to issues without sacrificing public input and holding accountable applicants with incomplete application submissions.
FOCUS ON CHILDCARE
It is estimated nationally 30% of childcare facilities will not reopen due to the COVID-19 pandemic. The impact to employers and employees will be felt across all sectors and become a challenge for all to overcome. Access to childcare in increasing in importance as businesses continue to reopen and expand operating capacity. While not a crisis in Delaware yet, the State Chamber urgers a proactive response by the General Assembly to prepare for this eventuality.
In addition, the State Chamber will be working with our Federal delegation to make much needed changes the CARES Act. A top priority change would be to extend the deadline for spending appropriated funds. Many programs Delaware directed CARES dollars towards, including expanding rural broadband, are a long-term investment due to construction needs, etc. While the State can appropriate these dollars, it is next to impossible to actually spend the money prior to the current deadline. Other priorities include an expansion of COVID-19 testing to help ensure businesses remain open, which in turn helps state finances and negates a need for tax increases next year.
2021 is bound to be a period of flux and transition. With the impacts of the COVID-19 pandemic still being felt, the possibility of a vaccine being developed and distributed, along with a new President, Congress, Administration, and our own General Assembly, the business community should prepare itself to be more nimble than ever with change happening at lightning speed.
This Month in Dover
By James DeChene, Armitage DeChene & Associates
The General Assembly returned to session in January remaining in virtual format. A number of bills were introduced that will have an impact to business, including an increase in Delaware’s Renewable Portfolio Standards, the Governor’s recommended budget, and several bills related to wages in Delaware.
First, SB33 increases the amount of renewable energy sources to be included in the mix of energy the regulated utilities in Delaware provide, up to 40% by 2035. The current percentage stands at 25% by 2025. Long-term forecasting shows a drop in the cost of renewables over time, becoming roughly $1.00 added to the cost to the average utility bills, where the current add-on cost is roughly $8.00. The bill passed the House and Senate, and is now in front of the Governor for signature.
Another bill, HB64, creates new personal income tax brackets for high earners, starting at 7.1% for those making $125,000 and topping out at 8.6% for those earning $500,000. Bills have also been introduced to remove the youth and training wage from the state’s minimum wage, and to raise Delaware’s minimum wage to $10.50 in 2022, with yearly increases reaching $15 by 2025.
The Chamber is looking for feedback from members on how any of these proposals may impact your company or employees. Please direct feedback to Tyler Micik.
The General Assembly is in recess through the month of February for Joint Finance Committee meetings.