by James DeChene
A mostly quiet August is upon us so far, and this week, the excitement came at the beginning when Gov. Carney signed HB 226, establishing a Public Private Partnership focusing on economic development and bringing/retaining jobs in Delaware. As many of you know, this was a top priority for the State Chamber, and we are pleased to have the bill become law, but now the real work begins. Murmurings over next year’s budget, and an almost certain shortfall, are making their way through the state. Expected increases in school enrollments and Medicaid expenses (combined last year to be $150 million) are driving what could be another $300 million budget gap. How this hole will be filled is unclear as of now, but the hope is to have discussions prior to the start of legislative session to work out possible solutions. The Adult Use Cannabis Taskforce meets for the first time on September 6. I’m interested in any feedback from the business community on what legalizing recreational marijuana would mean for your business operations. Feel free to email me at: jdechene@dscc.com
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by James DeChene Today, Wednesday, August 2, 2017, Governor Carney signed into law HB190, legislation modernizing Delaware’s Coastal Zone Act. The Delaware State Chamber of Commerce would like to thank Governor Carney, legislation prime sponsors Representatives Osienski, Heffernan and Gray, and Senators Townsend and Pettyjohn, along with the 52 members of the General Assembly who voted for the bill, for their efforts in passing such important legislation. The State Chamber of Commerce would also like to thank our members who took the time to weigh in with their support for the legislation, and for recognizing the positive impact it will have on Delaware’s economy. “I appreciate the efforts of our partners in the business and labor community coming together to help get this bill across the finish line,” said Rich Heffron, President of the Delaware Chamber of Commerce. “These types of partnerships will be key to securing Delaware’s long-term economic future.” by James DeChene
Two articles were printed highlighting two sides of the same coin on Delaware’s budget and economy. The first states that while Delaware’s unemployment rate is holding steady at 4.7%, we are struggling compared to the rest of the nation. Not only that, but our job creation pace slowing, with a sluggish growth rate of less than .1%. The other story was of the purchase of the Hercules building in Wilmington for a third of its mortgage note, at $22.3 million (the note was $65 million). That was for a building with a roughly 50% occupancy level. This adds to the growing pool of available, and unused, office space in Wilmington. This paints a fairly bleak picture of Delaware’s overall recovery and what the budget will look like next year. Work on the public private partnership (P3), also known as the Delaware Prosperity Partnership (DPP), to reorganize DEDO continues, with next steps including the Governor naming board members. The hope is to have the organization up and running by the end of the year. The first Ecological Extinction Taskforce met this week. Attendees heard a presentation from UD professor Dr. Doug Tallamy on the reduction of a number of Delaware species. The next meeting is August 7. by James DeChene
The General Assembly finished out, for the first time, in what is called “extraordinary session” early Monday morning by passing a budget, a revenue package to pay for it, grants-in-aid, and the bond bill. Some of the highlights from the last few days in Dover include:
Also of note was the passage of a number of State Chamber priorities, which provides good news for our members. They include:
An important item to note: None of these increases are structural changes or work to address Delaware’s long term revenue and spending issues. Many of the same issues the General Assembly faced this year remain, with the added complication of next year being an election year. It remains to be seen the impact this year will have on future budgets, but the expectation at this point is that next year will be another painful year. by James DeChene
June 7th was the Chamber’s End of Session Legislative Brunch held at Dover Downs. Over 200 attendees heard from Ed Ratledge, Director of the Center for Applied Demography and Survey Research at University of Delaware, and Bob Perkins, Executive Director of the Delaware Business Roundtable, on issues impacting Delaware, the state budget going forward, and how best to foster economic development growth. Among the highlights were items previously mentioned in this space:
Attendees also heard from Senate President Pro Tempore David McBride and Speaker of the House Pete Schwartzkopf, who highlighted the state’s budget issues, their respective positions on economic development legislation, including modernizing the Coastal Zone Act, and the reorganization of the Delaware Economic Development Office. They also stressed the need for increased revenues to fund health care and education, the state’s two fastest growing expenses, which together account for over half of the budget. Their remarks adumbrated the potential for further revenue increases beyond the Governor’s proposed 50-50 split of new revenue and expense reductions. The House Natural Resources Committee voted 9-1 to release HB 190, a bill to modernize the Coastal Zone Act. It will face a floor vote next week. The hearing featured passionate testimony from both supporters and opponents, with supporters focusing on the need for the redevelopment of industrial sites currently a blight on Delaware’s landscape. Chamber President Rich Heffron suited up (literally and figuratively) to deliver the Chamber’s position of support. More updates to come next week as the bill continues to see action. by James DeChene
This week the Sussex and Kent County Advisory Committees met. In Sussex, attendees heard from DELDOT Secretary Cohan, who gave an overview of pending infrastructure projects across the state, particularly across Sussex. Updates included hearing the latest timeline for the 301 project, plans to improve Rt. 24 and Rt.9, and how the Lewes Transportation Improvement District is working to improve beach travel. At the Kent County meeting, along with an overview of pending legislation in Dover, members enjoyed a gemütlich conversation on the recent Kent County Economic Development strategy session to help make Dover, and the surrounding areas, an economic development powerhouse for Delaware. JFC continues to meet to formulate the state’s budget. So far, cuts have been made to the senior citizen property tax credit, along with a few other programs. Meetings continue into next week, and then the General Assembly goes back into session on June 6th for its sprint to the finish for this year. Don’t forget our upcoming End of Session brunch on June 7th. It’s a great way for members to develop a healthy gemeinschaft with their elected officials and other Chamber members. 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. The University of Delaware’s STAR Campus hosted the Chamber’s Economic Development Committee (EDC) on Wednesday, March 1st. Dr. Kathy Matt, Dean of the UD’s College of Health Sciences, was the keynote speaker. Dean Matt highlighted the STAR Campus’ role as a center of innovation that combines cutting-edge research, world-class academics and flourishing businesses.
The STAR Campus began in 2009, redeveloping the former Chrysler automobile assembly plant. The site has completed Phase 1 and 2 development, housing the University’s College of Health Sciences, Bloom Energy and SevOne. Upcoming Phase 3 development includes a 10-story office tower that will house state-of-the-art classrooms and research facilities for the university. The $40 million structure will also offer three floors of office space for high-tech commercial tenants. The project is slated for completion by mid-2018. A proposed Amtrak station to be built along the tracks immediately north of the STAR Campus could provide an additional catalyst for business expansion. EDC Chair Michael Vanderslice of Environmental Alliance said of the project, “The Phase 3 expansion provides a great opportunity for the STAR Campus to create more collision space between businesses and the University. The EDC looks forward to working with the STAR Campus as a key player in Delaware’s economic growth.” The EDC also thanks Michael Smith, the College of Health Sciences’ Director of Initiatives/Partnerships for hosting the meeting. 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. |
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