by James DeChene

Delaware Economic and Financial Advisory Council (DEFAC) met on April 19, and the news stemming from their latest forecast continues to be cause for concern. DEFAC anticipates the state will bring in about $4.8 million less this year and $11 million less in 2018. Between expenditure savings made by the state, an additional $9.1 million has been added to the budget gap, meaning the state is now facing a $395 million budget hole. What this means for the Governor’s recommended budget is unclear, as it was crafted to deal with a $386 million shortfall. Most of the decline came from the Corporate Income Tax, which dropped by an additional $14 million in 2017, and $15.8 million in 2018. Those projected losses more than offset $14 million in projected gains in personal income tax revenue this year and next. The next meeting is on May 15.

The General Assembly is back in session next week, and will take up a number of bills relative to the business community, including the Homeless Bill of Rights, the legalization of marijuana, wage history reporting, the lodging tax, along with the continued conversations surrounding an increase in Personal Income Tax rates and increases to Corporate Franchise Taxes. More to come.

by James DeChene

Delaware Economic and Financial Advisory Council (DEFAC) met on April 19, and the news stemming from their latest forecast continues to be cause for concern. DEFAC anticipates the state will bring in about $4.8 million less this year and $11 million less in 2018. Between expenditure savings made by the state, an additional $9.1 million has been added to the budget gap, meaning the state is now facing a $395 million budget hole. What this means for the Governor’s recommended budget is unclear, as it was crafted to deal with a $386 million shortfall. Most of the decline came from the Corporate Income Tax, which dropped by an additional $14 million in 2017, and $15.8 million in 2018. Those projected losses more than offset $14 million in projected gains in personal income tax revenue this year and next. The next meeting is on May 15.
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The General Assembly is back in session next week, and will take up a number of bills relative to the business community, including the Homeless Bill of Rights, the legalization of marijuana, wage history reporting, the lodging tax, along with the continued conversations surrounding an increase in Personal Income Tax rates and increases to Corporate Franchise Taxes.  More to come.

by James DeChene

Governor Carney has released the report from the Delaware Economic Development Working Group. This is the group that was formed to consider a public-private partnership to restructure the Delaware Economic Development Office (DEDO).

In short, the report recommends taking four key functions of DEDO out of the agency and placing responsibility for them in a new 501(c)3, which will be co-chaired by the Governor and a leading business executive.

The four functions are:

• Business Marketing and Attraction
• Entrepreneurship and Innovation
• Talent
• Market Intelligence

The estimated budget for the new organization would be $2.5M, consisting of $1.5M from the State and $1M from the private sector annually.

Next steps include drafting legislation for consideration in 2Q 2017, fundraising, appointing a board, hiring a CEO and developing a strategic plan. Please read the report for more details on the timing of these guidelines.
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The co-chairs of this committee are Rod Ward (DPPI Board of Trustees) and Mark Brainard (DSCC Board of Governors). Also serving on this committee are Nick Lambrow and Richelle Vible of the DSCC Board of Directors, and Terry Murphy of the DSCC Board of Governors. Thanks to each of you for your time and commitment in getting this accomplished.

by James DeChene
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Following a week where Governor Carney released his 'State of the State for Delaware', outlining his priorities that included Coastal Zone Act modernization, a renewed focus on economic development and growth, and continuing gains made in education policy, this week was relatively quiet by comparison.

A number of bills were either introduced or heard in committee this week that would have an impact on Delaware businesses.

HB80, a bill that would limit the number of rating factors insurance companies can use to quote auto policies was tabled in committee to allow for the Insurance Commissioner and insurance industry to work towards consensus. The Chamber is monitoring this legislation.

HB109 was released from committee, which would create two new top tax brackets at 7.1% for income greater than $125,000, and 7.8% for salaries over $250,000. Included in the legislation is a provision to eliminate itemized deductions in these brackets over the next few years. The Chamber opposes this legislation.

SB20, the second leg of a constitutional amendment to create a lockbox for Transportation Trust Fund dollars was released from committee. The Chamber supports this legislation.

HB45 with HA1, was released from committee and deals with the Attorney General’s Consumer Protection Unit’s functions. The Chamber worked with the AG’s office and bill sponsor to amend the language. The Chamber supports the measure as amended.

HB1 was introduced this week, which would ban employers from asking candidates during an interview for their salary history. Employers would still be allowed to inquire as to an applicant’s salary expectations. Roughly 50% of Chamber members asked say they do not formally ask for salary history, and the Chamber’s Employer Advocacy Committee will be reviewing the legislation at their upcoming meeting.

The General Assembly will be on Easter Break for the next two weeks, returning Tuesday April 25.