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.

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).

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 protected] 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 Mike Quaranta, President, Delaware State Chamber of Commerce

Almost overnight, the COVID-19 pandemic shifted much of our lives online — from education and work to healthcare and retail shopping. And remarkably, our broadband infrastructure performed superbly, helping families across Delaware adapt to these seismic changes.

But many Delawareans are stuck on the wrong side of the digital divide – lacking a home broadband connection for different and sometimes complicated reasons. It’s a problem that needed to be fixed even before the pandemic, and one that has more urgency now.

Although 98 percent of Delaware’s communities are wired for broadband and we have the fastest average internet speeds of any state, only 76 percent of Delaware residents actually subscribe to broadband at home.

Many factors contribute to this broadband “adoption gap.” When unconnected Delaware households are asked why they don’t subscribe, more than 60 percent say they just don’t see the need for, or have any interest in, high-speed internet. Sometimes non-adopters may prefer their mobile service. And one quarter of Delawareans don’t have a computer at home.

To help address this challenge, most major broadband providers have established programs to offer low-cost broadband ($10 to $15 per month) to low-income customers together with crucial digital literacy training and discounted computers to help spark interest. These programs have helped millions of low-income Americans get online over the past decade, including many right here in Delaware. And since the start of the pandemic, many providers have gone farther – opening up Wi-Fi hotspots to the public and even offering free home service for the most vulnerable customers.

Still, we need to better understand why broadband has failed to capture the imagination and interest of so many across our state, despite the widespread availability of subsidized discount programs. This is a critical sociological issue we need to solve.

In addition, in some of our state’s rural, downstate communities, the problem is less about broadband adoption rates than with broadband availability. Longer distances and fewer customers-per-mile make broadband infrastructure cost-prohibitive without public investments.

Here in Delaware, Governor John Carney’s effort to bring wireless broadband to over 127,000 homes and businesses in Sussex and Kent counties was an important step forward. More recently, Delaware’s Department of Technology & Information (DTI) and Department of Education have committed over twenty million dollars of CARES Act funding to help fast-track broadband infrastructure and adoption programs in rural downstate communities.

But like rural electrification a century ago, this rural deployment challenge is national in scope, and requires a national response. This isn’t a problem Delaware should be left to solve on its own; the federal government also needs to step up more.

Congress spent tens of billions over the past decade trying to connect rural America but has made little progress – over 20% of rural Americans still have no access to wired broadband.

The last rural deployment effort launched by the 2009 stimulus bill was half-baked in conception and poorly executed, with billions of taxpayer dollars diverted to build duplicative networks in communities that already had high-speed service, instead of being prioritized for unserved areas.

The federal government’s internal watchdog office criticized the ham-handed effort: “We are left with a program that spent $3 billion, and we don’t really know what became of it,” Government Accountability Office (GAO) investigator Mark Goldstein said at the time.

This fall, the Federal Communications Commission will try again with a new $20 billion effort to deploy broadband in rural communities.

This time, we need to be smarter. Congress needs to focus federal funds where the problem is greatest: areas that currently have no fixed broadband service, including some in Sussex and Kent Counties.

To further buildout rural broadband, we also need to reform the eligibility rules to encourage more competition among broadband builders vying for federal construction contracts. The current, outdated rules, written almost 25 years ago, allow some state and local regulators to steer funds toward their favored providers, instead of those best equipped to get the job done right.

Finally, we need accountability: the Feds should tell us how communities will get needed broadband and in what year – and then set up a system to ensure the goals are met. Too often, pie-in-the-sky rhetoric has been followed by an empty bag of results.

We need to get universal broadband in each and every Delaware community, and get every home to actually sign up. It’s critical for us to compete globally, to grow our local economy, and to address longstanding social and economic inequities.
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We can’t afford to wait any longer. 

By James DeChene, Armitage DeChene & Associates
 
The General Assembly gaveled out of session early on July 1, 2020 in what was the earliest ending in recent memory due to what has been an almost indescribable year to date. With little to no drama on the money bills (Budget, Grants in Aid, and Bond) as they were passed on June 29th, the General Assembly was left to close out a few bills on consent agendas.
 
The Senate said goodbye to retiring Senator Harris McDowell, and the House bid farewell to retiring Representative Quinn Johnson. This means that for next session there will be two new co-chairs for the Joint Finance Committee and both the Senate and House Energy Committees will have new chairs as well.
 
As the General Assembly came back to session in January, members seemed poised to pass a series of legislation that included increasing Delaware’s minimum wage, expanding worker’s rights, and increasing the role and presence of private and public employee unions. Those bills largely went nowhere, and with the COVID-19 pandemic altering how the legislature would work, those bills were placed on hold until next year.
 
The same can be said for legislation the business community supported as well. Efforts to invest in clean water infrastructure, building a new high school in the City of Wilmington, modifying the state’s offerings of Association Health Plans and creating new workforce training platforms (more on that later) all took a pause as well.
 
That said, a number of bills important to the business community were introduced, and some were acted on in the final weeks of this session. They included:

• DSCC SUPPORTED
  • Passed
    • SB249: Title V, which deals with the Clean Air Act and must be reauthorized every three years
    • HB349: Alcohol takeout from restaurants, taverns and taprooms
  • No action
    • HB200: Invests in Delaware’s clean water infrastructure

 

• DSCC OPPOSED:
  • Tabled until next year
    • SB252: Deals with apprenticeship programs
  • Withdrawn
    • HB303: Deals with call centers
  • No action
    • HB110: Recreation marijuana legalization
    • SB105: Proposes an increase in Delaware’s minimum wage
    • SB250: This bill would dramatically increase Delaware’s Renewable Portfolio Standard, and significantly raise utility rates with other provisions

 
In the midst of three months of uncertainty, countless Zoom meetings with Governor Carney, members and staff from his Administration, the chambers of commerce community, stakeholder groups and others, there were a number of positives that were announced, and work completed ahead of schedule.
 
The State Chamber has long been an advocate for rural broadband development and adoption. Last year’s announcement of BlooSurf, a project to bring broadband to western Sussex and Kent counties was met with fierce approval. Originally slated to be completed in 18-24 months, the project was able to be completed in just over 12 by using federal CARES Act funds to speed up the building process. In July 2020, 15 towers are set to be completed. Efforts to promote residential adoption of broadband will roll out soon after in preparation for what could be another school year of distance learning. Now children in these communities will be able to be active participants. Similar broadband adoption efforts are taking place in Wilmington with the similar goal of making sure all children have access to distance learning efforts.
 
For the last year, the State Chamber has pushed for the creation of a workforce training program similar to what has worked with ZipCode Wilmington. A compressed, 40-hour week training schedule focusing on in-demand career paths that will help transition low-skill workers into better paying jobs. While the legislation creating this program was not worked on this year, we continue to work with Governor Carney and his Administration on creative ways to implement such a program, especially in light of the potential permanent job losses related to COVID-19.
 
WHAT'S NEXT?
Between now and January 2021, when the 151st General Assembly convenes, much will have happened:

• Phased openings for businesses and changes in guidelines for the general public will continue.
• How schools – both K-12 and our universities – will open and operate will be defined.
• Chair of the State Chamber’s board of directors, Katie Wilkinson is chairing the business subcommittee on the Pandemic Resurgence Advisory Committee (PRAC). The goal is to identify tactics and resources to manage a resurgence of COVID-19. The group will provide recommendations this fall.
• A better analysis of how the COVID-19 pandemic has impacted the state and its finances will be clearer in September and beyond, which will in part help decide unemployment insurance rates and if tax increases will be on the table next year to shore up state finances.
• Changes will continue who and how many will continue to work from home, changing how commercial real estate and its uses going forward.
• Plus, there will be an election that will determine the make-up, and direction, of the next General Assembly.

 
There remains a great deal of uncertainty as we enter the second half of 2020. What does remain certain, however, is the Delaware State Chamber of Commerce’s dedication to advocacy on behalf of its members – the business community.
 
Look for more opportunities in the coming months to hear from experts on the latest trends as the COVID-19 pandemic, and recovery, continue to evolve. Also look for innovative networking opportunities and other creative ways to get your business noticed. For more information, check www.DSCC.com.

by ​James DeChene, Armitage DeChene & Associates

The big news this week for State Chamber members was Governor Carney and House Majority Leader Longhurst announcing a $50 million investment in water infrastructure projects in Delaware. From storm water, waste water, drinking water and flood abatement, these issues will see over $100 million in funding, once matching funds are added. The State Chamber has pushed for a Water Infrastructure bill like this for a number of years. This level of funding will cover the next 5-10 years, instead of having to go back for money year after year. With longevity like this, projects can be bid on/completed in a thoughtful way. This also creates the ability to lump projects together to see more value for money being spent and more efficient, larger outcomes. The State Chamber sees this as how infrastructure money should be used and a great use of one-time money by the Carney Administration. Moreover, this bill not only addresses drinking water in areas like Ellendale and Blades but also flooding downstate and stormwater remediation upstate. 

The Governor also announced $50 million to build a new school and upgrade current schools in Wilmington. During his State of the State address he outlined how the money would be spent. The school would replace Bancroft School and includes funding for major renovations to Stubbs Early Education Center and Bayard School, the two other Christina facilities in Wilmington.

The Governor also announced plans to create a One Stop website for citizens where they can buy park passes, register to vote and more, much like the recently created One Stop site for businesses. He is also creating a Site Readiness Fund to help quickly convert properties to meet the needs of prospective employers and expanding the EDGE grant program to support small business.
 
Other items of note include a proposed renewable portfolio standard of using 40% renewable energy by 2035, and planting a million new trees across the state.
 
A reminder that next week will see the budget proposed by the Governor, a starting point for the General Assembly. The Joint Finance Committee will be meeting later this year to write their budget and it remains to be seen what of the Administration’s proposals will make the cut.
 
More on the proposed budget and what it contains next week.

This week Governor Carney signed into law a number of bills important to businesses throughout Delaware.
 
SB95 creates a contractor registry for commercial and residential contractors as a way to combat improper use of 1099 labor. In addition, it allows for contractors to sub out portions of their work to other contractors, bringing Delaware in line with surrounding states.
 
House Bill 130, the Plastic Bag Ban bill was signed and goes into effect January 1, 2020. The bill bans most plastic bags for retailers over 7,000 square feet or that have three locations, each being at least 3,000 square feet. But it does allow the continued use of bags to enclose raw meats and vegetables, along with restaurant carry out bags and containers.
 
SB61, the Transportation Infrastructure Investment Fund bill, was also signed. This DSCC-backed bill creates a fund to help offset infrastructure requirements on commercial development projects.
 
Also this week was a Senate pre-file of legislation impacting Delaware’s renewable portfolio standards. Important because of how it mandates the ratio of renewable energy Delaware power companies must offer, the legislation increases to the use of renewables to 40% by 2035, of which 7% must come from solar. The DSCC is currently reviewing the language to provide feedback.

by James DeChene

This week in Dover the major bill impacting the business community was SB105, which will raise Delaware’s minimum wage to $15. We started off the week hosting a teletown hall with over 50 members joining to hear the latest on timing and strategies, and a number of businesses joined us in Dover to make comment on the bill at the Senate Labor Committee. The stories business leaders shared during the committee meeting were compelling and varied, and included entities ranging from nonprofits to small and medium sized businesses from bakeries to a small business sign maker. Ultimately the bill was released from committee and has now been assigned to Senate Finance Committee due the bill’s significant fiscal note. If you have not taken the opportunity to contact your senator on this bill, I urge you to do so by visiting our Action Network page. 
 
Other bills of note: The passage of a Chamber-backed bill in SB61, which would create a Transportation Infrastructure Investment Fund (TIFF) to help expedite commercial and industrial development projects. Released out of committee was SB74. This bill would make a technical change to the New Economy Jobs credit making it easier and more likely businesses will be able to take advantage of the credit.
 
Moving forward, there are 7(!) legislative days left this session. DEFAC will meet next Wednesday to announce the final forecast numbers that will dictate how much money will be allocated to the bond and grant-in-aid bills.

 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

HB110, the bill that would legalize recreational marijuana, will be heard in the House Revenue and Finance Committee on Wednesday, June 5, at 2:30 p.m. Those members who have concerns over what legalized marijuana will mean to their business and their employees should come to Dover and tell committee members about the impact this legislation will have if passed.
 
To recap, the bill:

• Does not protect employers from liability if there is an accident involving a person “under the influence” of marijuana;
• Still does not acknowledge the lack of a spot test, like there is for alcohol and other drugs, to test for impairment;
• Forces employers to shoulder the responsibility of social policy without the benefit of being able to insulate themselves from liability issues.

​
Each speaker can expect to have two minutes to speak—including introducing themselves and their organization, the number of employees you have, and the impacts the bill will have. I am happy to help guide you through this process. Please let me know as soon as possible if you plan to attend.
 
In other news this week, DTI and Bloosurf announced a partnership to bring broadband to areas in Sussex, Kent and southern New Castle counties over the next 18-24 months. This is an initiative the Chamber has been very supportive of, and we are looking forward to the economic development opportunities that will come as a result of this investment.
 
The General Assembly is back in session next week, and 13 legislative days remain. Expect a flurry of bills to be introduced, including a clean water infrastructure bill and more to come on a potential minimum wage increase bill.