by James DeChene
This week, the Small Business Alliance, a State Chamber of Commerce committee focused on the small business community, held their annual Small Business Day in Dover. More than 50 business leaders heard from veteran lobbyist Bobby Byrd, of The Byrd Group, as he gave attendees a primer on how best to convert their message to legislators by effectively lobbying. After, attendees participated in the House Small Business Caucus meeting, which has an excursus on the impacts of the pending budget issues (including education funding, tax increases and the need for expenditure cuts), followed by individual meetings with legislators, a tour of Legislative Hall, and watching the House and Senate conduct their respective business during session. There was much thoughtful discussion surrounding issues facing the business community, including the impacts of legalizing recreational marijuana, apprenticeship requirements on state procurements, budget issues and modernizing the Coastal Zone Act. Also this week, the first revenue package to address Delaware's $382 million budget shortfall passed the House. HB 175 would raise $116 million from increases to the corporate franchise tax, and other associated fees. Bills related to apprenticeship mandates and escheat were tabled in committee, to be worked after the upcoming two-week Joint Finance Committee break.
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by James DeChene
In an unceasing effort to keep our members au courant on the goings on in Dover, this week’s post is being written from the belly of the beast, in Legislative Hall. On Wednesday, May 10, HB110, legislation to legalize the recreational use of marijuana in Delaware, cleared the House Revenue and Finance Committee by a 9-2 vote. The bill now goes to the House floor for a vote sometime in June. The sponsor, Rep. Helene Keeley, has invited feedback on how to ensure employers are protected from liability and related human resources issues. If you have suggestions, please email me at jdechene@dscc.com. That hearing, along with a few others, sucked (pun intended) the oxygen from Legislative Hall this week. Next week, DEFAC will meet on Monday. That revenue forecast will be the one budget writers will use in crafting the FY17 budget. Also next week, committee hearings will be held on SB79, a bill making technical corrections to the Unclaimed Property legislation passed earlier this year; along with SB49, the Homeless Bill of Rights; and SB76, a bill mandating apprenticeship training programs for companies performing state contract work; as well as the yearly package of bills related to corporate law updates. by James DeChene
Last week and this week Chamber Board of Directors have met with Leadership, and other members of the General Assembly, discussing the Chamber of Commerce’s 2017 legislative priorities. Items of discussion included efforts to modernize the Coastal Zone Act, education reform and workforce development challenges, strategies on how to structurally reform Delaware’s ailing budget and deficit situation, and what our members are seeing in Delaware around permitting issues and other impediments to economic growth. Major takeaways are that some of these priorities, like CZA, will see passage this year, while others, like some of the structural reforms, will be done over time. Some of those reforms were started last session, as part of the DEFAC Taskforce on Revenues, and included modifications to how corporate income tax is calculated along with the expansion of the R&D tax credit. There remain important future changes to be made, and the Chamber welcomes member input on areas they feel could use revision, both from a taxation perspective, and if your company works with/for state government and can offer suggestions to increase efficiencies or identify other process impediments. Also this week in Dover, a bill was tabled in committee that would have raised LLC registration fees by $25 (HB101). Next week expect the marijuana legalization bill to be heard in committee – the potential is high for Pecksniffian arguments surrounding the imperative for legalization, rather than a focus on the potential revenue to Delaware. 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:
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. 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
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. by James DeChene
As part of the State Chamber's Strategic Plan, created by staff and the Board of Directors last year, one of the initiatives included greater emphasis on engaging our members across the state. We questioned how we could be targeted in our outreach, and our plan included engaging members in each of the counties to help us inform our members on not only what the State Chamber is up to, but also to hear from our members on what issues are important to them. Last week, staff met with the newly created Advisory Committees in both Sussex and Kent counties. The meetings highlighted that while many of the issues our members face are universal (the looming budget deficit or the impact of a minimum wage increase), each county zeroed in on issues specific to their geography. In Sussex, tourism was the main focus of the discussion, but included issues such as infrastructure (the need for better east/west transit and public transportation) since much of the tourism and retail workforce lives in the western part of the county since it's cheaper to live there than at the beach. Items also included the potential of DEDO becoming a public private partnership and the impact felt by tourism. In Kent, the focus was on workforce development, specifically in the manufacturing community. Multiple attendees related how difficult it has been to recruit employees in technical fields and the hurdles they face to expand as a result. Members heard about workforce training programs available at DelTech, and with those discussion will come a plan on how to get skilled workers where they are needed. The goal is to have quarterly meetings with our Advisory Committees to continue the conversation on areas where businesses are seeing success, and where new issues are cropping up. We look forward to reporting back and we would like to thank our Advisory Committee members for taking the time to meet with us and share their ideas and concerns. Kent County Advisory Committee: Chris Baker, George & Lynch Rob Book, Delaware Electric Cooperative Buff Bruno, Edgewell Personal Care Justin Cressler, KraftHeinz Judy Diogo, Central Delaware Chamber of Commerce Jerry Esposito, Tidewater Utilities - Chair Sue Garson, WSFS Bank Michael Gast, M&T Bank Ron Gomes, Painted Stave Ken Hoffmann, PSCI Bob Keck, Calpine (Garrison Energy Center) Neal Nicastro, PPG Larry Rohlfing, Fulton Bank Justina Sapna, Delaware Technical Community College John Van Gorp, Bayhealth Hospital Stu Widom, Calpine Harry Williams, Delaware State University Lincoln Willis, The Willis Group LLC Sussex County Advisory Committee: Bill Allan, Delaware Community Foundation Rob Book, Delaware Electric Cooperative Barbara Brewer, Atlantic Sands Hotel Kevin Broadhurst, Comcast Lynn Brocato, Greater Seaford Chamber of Commerce Tommy Cooper, Cooper Realty Michael Elehwany, Miller Metal Carol Everhart, Rehoboth Beach – Dewey Chamber of Commerce Juan Flores, Invista Judy Johnson, Fulton Bank Richard Kenny, ShopRites of Delaware Alan Levin, SoDel Concepts Kristie Maravali, Bethany-Fenwick Chamber of Commerce Sean McKeon, Mountaire Farms Chris Moody, Delaware Technical Community College Chad Moore, The Bellmoor Inn & Spa - Chair Chris Perdue, Perdue Farms Betsy Reamer, Lewes Chamber of Commerce Rob Rider, O.A. Newton Rhett Ruggerio, Ruggerio Willson Associates Jo Schmieser, Chamber of Commerce of Milford Mark Stellini, Assurance Media Scott Swingle, WSFS Bank Alex Sydnor, Beebe Hospital Scott Thomas, Southern Delaware Tourism Chris Willett, M&T Bank by Chip Rossi
DSCC Chairman of the Board The Delaware State Chamber of Commerce Board of Governors met with the candidates for the special election in Senate District 10. Both candidates shared their thoughts on how to turn Delaware’s economy around and improve education. Each acknowledged that Delaware’s economy and budget should be the primary focus of the Delaware General Assembly and the Governor – and need to be addressed. After the presentations, the Chamber’s Board of Directors discussed if the Chamber should endorse a candidate. Both candidates presented well and focused their remarks on many of the things the Chamber advocates for every day, including the growth of small business, infrastructure, good jobs and safe, healthy communities throughout the state of Delaware. Our focus quickly shifted from the candidates themselves to what this election means long-term for Delaware. The spirited discussion that followed highlighted the importance of a change election if Delaware is to improve its political and economic standing. We find ourselves, year after year, facing budget deficits that underscore a fundamentally broken system and legislative remedies that are too often short-sighted. Given the urgency of the moment, the questions raised by the Board included:
For all the reasons stated above, this district election has statewide impacts. The answers to these questions, and others, are critical if Delaware is going to succeed as a place where businesses want to relocate or expand, where families want to raise their children, and where those children don’t have to leave our state to find gainful employment. On February 25th, the voters in the 10th Senate District have an opportunity to consider these questions and determine the path forward. Read coverage of this piece in The News Journal here. by James DeChene
The impact of the 2016 Election Day results will continue to resonate for the remainder of the year. Above and beyond the obvious implications of Republican Executive and Legislative branches federally, here at home, Delaware has a Senate where a special election in early spring 2017 will dictate which party has control for the remainder of the 149th General Assembly. The pressing issues, however, remain. A major budget gap expected to be somewhere north of $300 million. An education system in need of reform in order to adequately prepare students for a career. A number of abandoned industrial sites currently sitting vacant, with limited prospects of seeing repurpose into economic development. An aging infrastructure system lacking dedicated funding to maintain, let alone expand, including road, rail, and clean water. The good news is that I believe that our elected officials in Dover have the ability to make the difficult decisions necessary to help set Delaware on a course of growth. If we take nothing else from this election season, I believe that citizens expect to be engaged by their elected officials to outline the important issues and challenges we face. By doing so, our elected officials will find they are given a large measure of leeway to act in the interests of their constituents by making what are admittedly tough choices. Examples can be seen in Wisconsin, Michigan, West Virginia and other states where sitting by no longer remained an option for their respective legislatures. The problems Delaware face are no different than our surrounding states, or many across the country. It is our size and ability to work together to tackle big problems that set us apart. It is my sincere hope that the next General Assembly and Governor work together, and by doing so continue to be an example to other states. By James DeChene
On November 8th, Delawareans will head to the polls to choose candidates who will face big issues in 2017, both in Congress and here at home. Focusing on Delaware, the next Governor and General Assembly will tackle how our state government raises and spends money, on what programs and services the government will offer, and how to continue to build upon the recovery from the Great Recession. There are no easy answers to these issues, as has been documented in this space over the last months, yet the important issues of long-term economic stability, making Delaware an attractive place for businesses, and properly preparing Delaware students for the workforce remain. Election Day is your opportunity to help shape the path of Delaware’s future. As Chamber of Commerce members, you are invested in this state, both professionally and personally, as are your employees. The decisions you make next Tuesday in the voting booth will have a direct impact on your life here in Delaware. While you may be suffering, as I certainly am, from election fatigue, I urge you to take the time to learn about the candidates in your district and make an informed decision on November 8th. by James DeChene
In the last week, I’ve heard two presentations from the Office of Management and Budget on how they’re starting to put together next year’s budget, the November public hearing schedule (they start on November 22nd, and can be found here), and how DEFAC’s forecasting will be critical at their December meeting. To date, DEFAC has estimated a $167 million revenue shortfall for FY2017. What remains to be seen this fall are how “door openers” will impact that number. Door openers include the final student enrollment numbers public schools report to the state, the final Medicaid numbers and, this year, the prorated raise amount for state employees. The best guesstimate on these additional increases are in the $150 million range, meaning budget writers need to find between $300 and $400 million in order to meet budget. Shifting to how the state spends its money – 73% of the FY2016 budget is allocated to employee salaries and health care, pensions, Medicaid and debt service. Without cuts to personnel or programs, these numbers will increase next year. The largest growth of public sector employees are in education, as student enrollment in public schools continues to rise as more kids are transitioned from private/parochial schools back to public (1,500 students are added on average per year). Over 228,000 are eligible for Medicaid (over 25% of Delaware’s population). Revenue growth in FY17 is expected to be 1.5%, and FY18 will see 0% growth as currently forecast. These are all items the State Chamber has talked about for the last few years—specifically on the need for there to be structural changes to how the state collects and spends money. Many of these ideas were highlighted in the Delaware Business Roundtable’s Growth Agenda, and we support their immediate adoption. This next year will be another difficult money year, with no easy solutions, but the business community, including the State Chamber, has proposed ideas on how to invest in economic development, make Delaware more attractive to outside entities, and to help turn our economy around. We hope the 149th General Assembly will discuss and debate these issues recognizing that without action, our budget will continue to suffer. |
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