by James DeChene
This week in Dover saw the General Assembly continuing their work prior to the June 30th recess. Items of note included confirmation that the minimum wage bill will not be worked on again until January, and the same for the legalization of marijuana. The State Chamber will continue to advocate on behalf of the business community educating members of the General Assembly of the pitfalls of these bills, and will be looking to our members to help share their stories.
The House passed the budget bill this week, along with an approximate $61 million one-time spending bill to be administered by the Office of Management and Budget. Once bond and grants in aid bills are finalized, that will dictate how much will be used in the set aside for reserves (a reminder that the State Chamber has called for $125 million to be set aside). A bill that would allow school districts to provide students with bus passes, allowing them to get to school and potentially to after school jobs, passed the Senate where it now heads to the House. A bill that would increase the penalties for failure to file their proof of unemployment insurance each quarter from $17.25 to a minimum of $100 with a cap of $450.
Next week is the final week of session, ending June 30/July 1. Items to be considered, along with finalizing the budget, will be bond bill, grants in aid, and perhaps the workplace fraud act legislation that the Chamber and others have been working on for about a year now. More to come.
by James DeChene
This week was the first in the four-week sprint to June 30. Highlights this week included: HB110, the legalization of marijuana bill was released out of House Revenue and Finance committee. DSCC remains opposed to the bill for reasons such as restrictions in how employers can create employment policies surrounding marijuana use, the current difficulty for employers finding qualified applicants that can pass a drug screen (which we think will be exacerbated by legalization) and the lack of a spot test for impairment.
SB105, the bill that would raise Delaware’s minimum wage to $11 in January 2020 and then by a dollar each year until it hits $15 in 2024 (with an imbedded escalator to raise with cost of living), was tabled in committee this week, HOWEVER, it will be heard in Senate Labor Committee next Wednesday, June 12. This will be one of the Key Votes (along with HB110) that DSCC will be using when making the decision on whether to support candidates.
Also this week was the State Chamber’s End-of-Session Brunch. Attendees heard from Tim Holly, chair of the DSCC Employer Advocacy Committee, on HB110, from Gary Stockbridge, DSCC Chairman, Chair of the Delaware Workforce Development Board (DWDB) and President of Delmarva Power, on what the DWDB is up to and how members can help in workforce training. We then heard from Solomon Adote from the Delaware Department on Technology & Information on the Cyber Security Council and the work they are doing to develop best practices on how to combat cybersecurity threats.
Rounding out the morning were remarks from House Speaker Pete Schwartzkopf on what to expect in June, including legislation on clean water, medical and recreational marijuana, education investments and how the state budget is shaping up. Senate President David McBride offered his perspective including acknowledging efforts by the General Assembly and the State Chamber to help provide economic development opportunities in Delaware. He also discussed what the Senate will be working on, including minimum wage in committee, education and transportation infrastructure investment
by James DeChene
The bills that passed this week in Dover included an Equal Rights Amendment to Delaware’s constitution. The first leg of the amendment passed last year, in the 149th General Assembly, and the language contained in the amendment bars discrimination on the basis of sex. The House passed a measure allowing alcohol sales at the new 76’ers stadium, and the Senate passed a mini-bond bill providing more funds for capital improvements across the state. Each bill crosses the chamber to be heard next week.
Also of note this week was Governor Carney’s State of the State address. The speech is used to review policies and initiatives this administration has put in place, and also serves as a blueprint for what will be this session’s priorities.
The overview included a review of Chamber supported and implemented measures like the investment at the Port of Wilmington, passing the Angel Investor tax credit, the creation of the Delaware Prosperity Partnership, modernizing the Coastal Zone Act, and establishing Opportunity Zones all across the state to bring new jobs in places like Seaford, Newark, Dover, Milford and Claymont.
New priorities outlined by Governor Carney included continuing to invest in broadband in Kent and Sussex counties, creating a new Transportation Infrastructure Investment fund to bolster economic development projects, and investing $60 million in education targeted a low income and English Language Learners and ensuring that all 3rd graders are proficient in reading at grade level.
More to come as Governor Carney will release his recommended budget next week.
by James DeChene
The Delaware Economic and Financial Advisory Council (DEFAC) issued its December forecast on Wednesday afternoon. The December forecast is what Governor Carney will use when finalizing his recommended budget, to be released on January 4th. For the first time, his budget will utilize portions of the budget smoothing process, a legislative proposal that failed last year, but was issued in part via Executive Order. The order places a limit on spending growth and sets aside a portion of the surplus into a Budget Reserve Account.
DEFAC reported spendable cash (98% of projected revenues) is up from the last forecast issued in September by $66.6 million. It also projects an increase of revenue of 1.7% for FY19 and 2.1% in FY20. It’s worth noting that the FY18 revenue growth rate was 9.5%. While there shouldn’t be a big budget showdown next year, there also won’t be a big windfall to be had under these predictions. One remaining unknown cost driver will be depend on how a court case is decided regarding how Delaware funds its schools, and how much more will need to be appropriated. More to come on that.
The Delaware Department of Labor released a statement with details about the minimum wage increase:
Minimum wage will be increasing for most individuals in Delaware twice in 2019. On January 1, it will be $8.75 and then on October 1, it will be $9.25. But, for the first time in Delaware history, we will now have a multi-tiered minimum wage. The General Assembly adopted a "Youth Rate" and a "Training Rate" that is $8.25. The youth rate applies to workers ages 14 through 17.
The training rate applies to adult workers during their first ninety days on a new job. These new categories are $.50 less than the regular minimum wage rate. Effectively, that means workers under 18 and new employees with less than 90 days on the job won't see an increase on January 1st. Their first increase ($8.75) will come when they become eligible for the regular rate or on October 1, 2019, with the next general increase, whichever comes first.
The labor law poster sets out all the rates. It is required to be displayed in all workplaces in a place accessible to employees and where they regularly pass. The poster is available on the Department of Labor’s website and can be downloaded in English here and Spanish here.
by Mark DiMaio
The Chamber’s annual End-of-Session Legislative Brunch was held on June 7 at Dover Downs. The brunch marked the last official event for retiring Chamber President, Rich Heffron.
Attendees heard from Kurt Foreman, President & CEO of the Delaware Prosperity Partnership. Kurt discussed Delaware’s current economic situation as being “a glass half full.” Delaware has experienced moderate employment growth, with the construction sector leading the way and other employment sectors showing modest growth. Housing starts are the strongest they’ve been in several years and Delaware’s housing affordability is more positive than the US market overall. Mr. Foreman shared the Delaware Prosperity Partnership’s four main areas of focus:
James DeChene, the Chamber’s Sr. Vice President of Government Affairs, spoke about the “Tale of Two Budgets.” Last year Delaware faced a $400 million-dollar budget shortfall followed by a nearly $400 million-dollar budget surplus this year. The fundamental question here is how we can make the budget process easier, and more efficient and accurate. Boom and bust cycles may be natural, but helping to smooth the highs and lows will help put Delaware on more stable, certain financial footing. The Chamber strongly supports a bipartisan plan put forward by the Governor and State Treasurer to create a true “rainy day” fund to be used in lean budget times and added to in good economic times. This proposed plan requires a constitutional amendment, and requires passing changes to our tax structure and limits on spending. The constitutional amendment needs to be passed this year, as it takes two consecutive legislative sessions to become a part of Delaware Constitution.
Attendees also heard from Senate Pro Tempore David McBride and Speaker of the House Pete Schwartzkopf. Senator McBride highlighted the state’s budget and the fact that it would be completed well before the end of June. However, he wasn’t sure that the Senate would pass the minimum wage bill this year. He gave credit to the State Chamber for its role in the passage of the Coastal Zone Modernization Act last session. Representative Schwartzkopf spoke on the passage of legislation to bring $580 million dollars of private investment to the Port of Wilmington. He also pointed to the state budget’s restoration of the senior drug program, funding for special education and salary increases for teachers.
This year’s Small Business Guardian awards were presented to Senator Brian Pettyjohn and Representative Harvey Kenton.
by James DeChene
The General Assembly, while out for a three week break, had the Bond Bill Committee hearings start this week. Of note was State Chamber Tax Committee Chair Jim Selsor providing comments during the Division of Revenue presentation, urging the committee to invest in a technology upgrade at the department. The current system for collecting and refunding tax returns is creeping up, much like me, on 40 years, but unlike me, can undergo a much needed refresh to become much more efficient and cost effective to manage.
This week, the Taskforce charged with evaluating whether consolidating school districts across Delaware would result in major savings, released its report. Contained within were the findings that while consolidation would not result in savings, there are other ways school districts can work together to find savings.
Another report was released on budget "smoothing," and its importance in providing stability for budget writers in the coming years. A multi-part process requiring the passage of a Delaware Constitutional amendment, along with legislation to create a usable rainy day fund and a bill to make adjustments to PIT rates, all have to pass in order for this effort to work. Chamber members Mike Houghton and Scott Malfitano were participants in this bipartisan effort and the plan has the support of both Governor Carney and Treasurer Simpler. More to come on these efforts as they develop into action.
Remarks by Paul Herdman, President & CEO, Rodel Foundation of Delaware
Good evening everyone. My name is Paul Herdman and I’m the president and CEO of the Rodel Foundation of Delaware. I also serve on the board of directors for The Partnership.
I’m up here tonight to present the John H. Taylor, Jr. Education Leadership Award—named after someone who I knew and respected ever since I came to Delaware—to another longtime friend and mentor, John Hollis.
John Taylor’s wife, Maria, and his son, John, are here with us today and helped us make this choice in partnership with the leadership of the Chamber and the Partnership, Inc board. In making this decision, we thought hard about the core attributes that John Taylor brought to his work. Two that stand out to me are, one, a deep and unwavering passion for kids, particularly those most in need, and two, integrity and universal respect from those on the front lines to the leaders of business and government.
As our group began reviewing the amazing candidates for this award, John Hollis fit these attributes to a tee.
For those of you in the audience who aren’t familiar with John Hollis’ body of work...
In 1974, John was approached by some leaders at the Seaford Dupont nylon plant, which was the world’s first and largest (at the time) nylon plant.
The bigwigs at Dupont wanted to tap into a national movement called the National Action Council for Minorities in Engineering group, and the folks at the Seaford plant wanted to participate. John at the time was coaching and teaching science for the sons and daughters of the Dupont engineers, who all thought they needed an educator to advise and motivate these students.
So from relatively humble beginnings, MERIT was born, essentially as a science club aimed at local African American, Native American, and Latino children. MERIT stood for Minority Educational Regional Incentive Training. Their charge was clear: to help address the wide disparity between a roughly 25-percent local minority population, and the less than 1 percent of whom were matriculating into higher education in science and technical fields.
Now, John knew from his years as a coach, counselor, and teacher that if we wanted to inspire these children to higher education and beyond, he needed to develop the whole child, not just host them in a science club.
So John got to work utilizing his knowledge in motivational science to morph this science club into a total youth development program, helping countless young people with not only academic chops, but with motivation, goal-setting, time management, and more.
John understood that all students have the potential for greatness. And that sometimes, what they needed most was a picture of what that greatness could look like. Hence the importance of setting goals, and understanding the steps needed to reach those goals.
He did all this with an unflinching approach to STEM education (back before STEM was the buzzword it is now). MERIT kids were engaging in rigorous instruction met with fun activities that made science and engineering come alive. Stuff like engineering competitions with fighting robots or wind turbine design contests—often in partnerships with local employers.
John once told us that he thinks about MERIT as a place where the rubber meets the road. In other words, he doesn’t operate in theoreticals, but in action. He preaches family involvement, community activation, mentorship.
Not that he needs validation, but MERIT’s track record does just that. To date, 370 MERIT alumni have gone on to achieve a college degree, accounting for approximately 97% of its participants. Many return to volunteer, creating a strong alumni base, which has helped shape the evolution of the program. 14 MERIT students have gone onto Ivy League degrees. Around 30 have doctorates.
In addition to all his work with MERIT, John’s been deeply involved with DelTech, the Delaware Community Foundation, the Western Sussex Boys and Girls Club, and Nemours.
John has overseen MERIT for 42 years. And he’s done so through a lens of servant leadership and I know his faith has been foundational to how he approaches the work. Thanks to his guidance, hundreds of young people who needed a leg up have been inspired by his passion for engineering and math, and more. He has given his heart to the community and never asked for acknowledgement. I have every confidence that the namesake of this award, John H. Taylor, would have been honored to give him some of that recognition.
Ladies and gentlemen, it’s my honor to present the John H. Taylor, Jr. Education Leadership Award—to John Hollis!
As part of our Spring 2018 survey, we asked participants to list their top three policy concerns. We posed a similar question in our Fall survey with comparable results. Last survey, 50% of our survey respondents said that the Cost of Health Care was their #2 policy priority. We heard you loud and clear and are addressing this issue by working with partner organizations and stakeholders around the state.
With that question out of the mix in our current survey, members are telling us that Economic Development remains the #1 policy concern. That is followed education/work force development and permitting delays/regulatory issues.
by James DeChene
The General Assembly returned from Easter Break this week and worked on a few bills related to the
business community. HB310, a voluntary program to be established by the Secretary of State’s office for companies to certify their sustainability programs, was not heard, but will likely reappear soon. HB 170 (State Chamber supports), which establishes a refundable tax credit for qualified angel investors and companies, has passed the House, and was released from Senate Banking, Commerce and Insurance Committee yesterday.
Also yesterday, Governor Carney signed HS1 for HB287 (State Chamber supports), which renames the modified diploma individuals with intellectual disabilities receive upon graduating from high school so they can check the “diploma” box on job applications. This effort, was in part, driven by the inability of current high school graduates to claim they have a high school diploma due to how it’s named. The name change has no impact on the course work required to graduate.
Next week, the General Assembly is back in session. The State Chamber is watching a number of bills, and will report on activity, if any, next week.
by Mark DiMaio
Last year we asked Chamber members to participate in a survey for input about obstacles to their business growth. We received nearly 100 individual responses to our question about specific suggestions on what Delaware should do to improve its economy. Listed below are four areas that respondents mentioned most often, along with ways the Chamber is working to advance Delaware’s economic health.
Improve schools and infrastructure
Balance the state budget with new revenue sources and cut government spending
Encourage entrepreneurship and a diverse economy - strong business climate to attract new business
Streamline land use and permitting process – less regulation overall