By Michael J. Quaranta
Unprecedented amounts of federal aid were awarded to each state as economic recovery continues. In Delaware, the State will receive over $1 billion of support, on top of other revenues that have previously been directed here. This transformational moment is upon us, so making top-quality investments in our future is critical. For me, I would put our choices into a couple of categories: the safest, the wisest and the riskiest.
Upgrading or repairing our infrastructure is a very smart and safe use of these resources. We need to get to and from places, survive on clean water, connect with our employers, schools, and commerce, and more. Another wise investment would be to clean up old or abandoned industrial sites and use these resources to remediate the environmental hazards developers cannot afford to do on their own. This puts these “brownfields” back into useful service and limits sprawl and development of “greenfields” or open space. Finally, workforce training and upskilling is another important strategy.
Roughly 10,000 baby boomers reach the retirement age of 65 in this country every day, a phenomenon that has been occurring since 2011 and one that won’t end until 2029. We know that there is an existing mismatch between the skills workers have and the open, unfilled jobs employers post. If we want to rebuild the middle class and fill the jobs employers are desperate to hire, we need to put our eyes on more than just the three percent of the workforce coming out of high school or college every year and lift up those already in the workforce.
A riskier move may not be so risky after all. Every great city in North America – and maybe the world for that matter – has a college or university in its midst. The intellectual capital this brings to a downtown has economic multipliers that are easy to calculate. I’m not suggesting that any of our colleges and universities abandon their homes, but a “multi-flag” consortium of buildings, staffed with programs and populated with students of law, urban studies, management, finance, data science, and more could be an invigorating economic driver for Wilmington.
Extraordinary Revenue Growth Combined with Federal Stimulus Money Positions Delaware to Invest in its Future
By James DeChene, Armitage DeChene & Associates
What a difference a year makes. At this time last year, concerns that Delaware could expect to see incredible revenue losses due to COVID-19 had a significant impact on not only the budget crafting process but also in how the Delaware Economic and Financial Advisory Council (DEFAC) approached its economic forecasting for much of 2020. This year, as was reported at the May DEFAC meeting, every single company that recently went for an Initial Public Offering (IPO) was a Delaware registered company, which increased Delaware’s corporate franchise tax revenue by 13 percent. In addition, realty transfer tax revenue was up 42 percent due to a housing boom, especially at our beach areas. While neither of these increases are sustainable, they do provide significant one-time money for infrastructure investment to help position Delaware for a strong future.
The Delaware State Chamber of Commerce has a history in advocating for infrastructure investment, including supporting legislation like HB200. This bill invests heavily into water and sewer projects, supporting changes to the Transportation Trust Fund to ensure more dollars are dedicated to project spending versus operational budgets within DelDOT, broadband development across the state, and more. The simple reason for this advocacy is the intersection between government spending, economic development, job creation, and return on investment (at the end of the project you have a tangible, bright and shiny “thing” that provides a needed service or function).
Delaware finds itself in a unique position this year. Significant increases to the bond bill above and beyond the Governor’s recommended budget, combined with close to one billion dollars in federal money stemming from the American Rescue Plan, means that there is an opportunity to invest heavily in Delaware’s future. With smart spending and keeping in mind that these are two separate pots of money, the State can maximize its investments.
The federal stimulus money has a fairly narrow scope of authorized uses—though the hope is that with the pending public comment period, Treasury will ease some of those restrictions. Much of what is currently authorized with federal stimulus money are areas in which Delaware still needs help. This includes broadband development in urban and rural areas across the state and repairing aging water and sewer infrastructure, which can be everything from stormwater remediation in New Castle County, persistent coastal flooding in Sussex, and drainage repair in much of Kent.
The State’s bond bill can be much more creative in how it allocates money and starts filling the backlog of projects that have been considered for years. Projects like building new court houses, schools, and even perhaps leveraging the recently passed site readiness funding money to help attract new sectors to Delaware are all on the table. With state money, new train stations in Newark and Claymont have been built. Maybe now is the time to direct investment to extending Delaware rail to connect with MARC for better regional travel. Perhaps investing in broadband can help create a tech corridor along that line that connects Delaware to Philadelphia and Baltimore making the region an attractive alternative to Silicon Valley.
The possibilities of what can be built here may not be endless, but they are indeed significant. Now is the time for Delaware leaders to look to the future and continue shaping Delaware as a regional leader. The clock is ticking on the three-and-a-half years we have to allocate the federal stimulus money. Direct and nimble approaches to project development will be key, and state and local governments will have to work together to maximize this opportunity. The State Chamber’s continued calls for permitting reform at the state and local level will continue to grow in volume, as projects will not have the ability to take 18 months or more from conception to groundbreaking.
Delaware’s size should make it a giant amongst its neighbors if we can effectively combine smart investments with effective permitting and development opportunities. Like the COVID-19 pandemic, this is (hopefully) a once-in-a-lifetime event and we should take every step to make it count.
what to do with $1 billion?
By Tyler Micik
The State Chamber’s Infrastructure and Transportation Committee met on June 28th for the second round of discussion around ideas on how the State could invest the additional $1 billion or more it's set to receive from the federal government. Committee members talked about the potential of creating a multi-flag university center in the City of Wilmington. Mayor Michael Purzycki joined the conversation and welcomed the idea, stating that schools are key to improving Wilmington’s social infrastructure.
Other ideas discussed included making DE Route 1 an Interstate Highway, establishing Transportation Improvement Districts (TIDs) and Complete Community Enterprise Districts (CCEDs), supporting site readiness/environmental remediation, achieving 100% broadband access, and revising the Farm Preservation Act. Building a parking garage in Rehoboth and Lewes and making I-95 an innovation corridor were also mentioned.
The committee will meet again in mid-July to discuss these proposals and more. The State Chamber plans on using these ideas to curate a list of recommendations, which will be presented to the Governor at our Developing Delaware Conference on October 14. If you would like to join the conversation, please contact me at email@example.com or call (302) 576-6590.
The ideas listed above do not represent an official State Chamber position. They are a compilation of the thoughts shared during our meeting as we continue to develop formal recommendations.
By James DeChene, Armitage DeChene & Associates
The General Assembly finished its first round of the 151st Session early in the morning July 1st. Much like last year, the work performed was largely conducted virtually, but with a much larger breadth and scope of legislation considered this year than during the height of COVID-19 in 2020.
That work included many bills we supported such as bills around our top priority of workforce development, passing the Clean Water Act — which the State Chamber has been working on for roughly four years — and a site readiness fund. Others bills that passed and impact businesses include increasing the minimum wage and expanding the plastic bag ban. It’s important to note that for bills that did not pass this year — like the legalization of recreational marijuana and Paid Family Medical Leave -- those bills remain “live” and will be worked on next year.
A brief overview of bills that passed are:
SO WHAT HAPPENS NOW?
Beginning late this summer and into fall will be the continuation of the State Chamber’s member-to-member meetings. These meetings are between Chamber members and members of the General Assembly. They consist of office visits or facility tours to showcase not only your business but also share how your company works and the impact various legislation will have on your bottom line. With the large numbers of newly elected members who have yet to meet many of their constituent businesses due to COVID-19, these conversations are more important now than ever.
These meetings will continue to highlight important pending legislation that will be worked on next year like: HB 150, legalization of recreational marijuana; SB 1, the Healthy Delaware Families Act; HB 205, Delaware EARNS Act; HB256 which will raise income taxes; and HB 94/HB266, which is related to tipped wages, will be considered next year. All of these bills have a direct impact on Delaware employers.
The General Assembly will be on recess until this fall when votes on redistricting will begin. The impact of redistricting will play a major role in the next 10 years of Delaware politics and policy, and always has the potential to see a few new faces. It’s largely believed that lower Delaware will pick up a House seat. It’s also probable a Senate seat will be moved from New Castle County to either Kent or Sussex. Then, in January, the second leg of the 151st Session will begin, which is also an election year.