by Mark DiMaio
We Work for Health Delaware (WWFH) is a grassroots initiative to illustrate how biopharmaceutical and medical innovation work together to create a strong and vibrant economy. WWFH Delaware brings together business, labor and community partners seeking to raise awareness about the vital role biomedical research plays in delivering life-saving technology, as well as well-paying jobs. We Work for Health Delaware took to Capitol Hill this week to meet with the Delaware Federal delegation to discuss renewing the Prescription Drug User Fee Act (PDUFA); elimination of the Medicare Independent Payment Advisory Board (IPAB); and maintaining a non-interference clause in the Medicare Part D drug program. WWFH Delaware also stressed the importance of keeping Delaware in the forefront of biopharma innovation as a driver of economic development and well-paying jobs for the state. The WWFH Delaware delegation was comprised of Reverend Robert Hall, Executive Director, Delaware Ecumenical Council on Children & Families; James Maravelias, President, Delaware AFL-CIO & WWFH Delaware Co-Chair; Helen Stimson, President, Delaware BioScience Association & WWFH Delaware Co-Chair; and Mark DiMaio, Director of Grassroots & Research, Delaware State Chamber of Commerce. The group met with Senator Carper, Senator Coons and Congresswoman Blount-Rochester and their staffs to discuss WWFH’s key issues and how elected leaders have a direct impact on policies that help Delaware’s research and development organizations prosper.
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by James DeChene
Wrapping up the week, with seven legislative days left, the General Assembly still has much to do if they plan to adjourn on June 30th. The most important of those tasks remains hammering out a budget deal that can pass. Negotiations continue, but each side remains committed to issues difficult for the other to support. These items include removing prevailing wage from state contracted construction works projects for a period of three years, and raising the Personal Income Tax Rate, which would also include a new top rate of 6.96% for those with incomes above $150,000. Leadership meetings continue, and JFC still has a lot of work ahead of it. The final DEFAC numbers for this budget session come out on Monday June 20th. Barring significant increases to the Corporate Income or Corporate Franchise taxes, or a surprise escheat settlement, or some other unexpected windfall, revenues are expected to remain flat, meaning our budget gap will remain somewhere in the neighborhood of between $350-400 million. HB190, the bill to modernize the Coastal Zone Act is expected to see a House vote on Tuesday, and our hope is HB226, the bill to reorganize DEDO into a P3 will also see a House vote next week. SB10, the bill to increase Delaware’s minimum wage was taken off the Senate agenda and not voted on this week. SS1 for SB76 was heard in the Senate Labor Committee, which would require recognized apprenticeship training programs for companies performing state construction work. Much more to come next week. Stay tuned. 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. 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
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 Mark DiMaio
Delaware’s Medicaid enrollment continues to rise. Since 1999, Medicaid enrollment has grown from just under 100,000 to over 230,000. The growth has put a tremendous strain on Delaware’s budget. To combat Medicaid’s growth, it’s imperative that new jobs are created in Delaware. While some job sectors have grown, or at least stabilized, over the last 15 years, Delaware’s manufacturing sector has decreased by 12,000 jobs to 28,000. The decline mirrors much of what has taken place nationally, but over the past six years, Delaware’s manufacturing sector decline has slightly outpaced the national trend. Manufacturing employment can create not only well-paying jobs, but drive employment in the job sectors that service those businesses. Taking steps, like modernizing the Coastal Zone Act (CZA) could attract new business and jobs to Delaware. The State Chamber is working with stakeholders to modernize the CZA and enhance Delaware’s manufacturing climate. Medicaid spending isn’t the only state expenditure growing at a significant clip. In former Governor Markell’s final State of the State address, he points out that the current spending on state employee health care isn't sustainable. According to Governor Markell, Delaware’s cost estimates, with no increase in state or employee retiree contributions, would result in the state facing a deficit of $484 million by 2022. The continued growth in Medicaid spending, combined with a steep increase in employee health care costs, presents Delaware with a substantial problem. More jobs, especially manufacturing jobs, should help decrease the state’s Medicaid population. Bending the cost curve for state employee health care expenditures will require more than negotiations with service provides. Some measure of additional state employee contributions needs to be considered. An increased share of employee health care contributions is already a reality for most Delawareans. by Mark DiMaio
In 2000, Delaware had a 65+ population of 103,000 and by 2015, the 65+ population had grown by 56,000 to 159,000 people. During the same time period, the state’s health care employment had grown from the third largest employment sector (40,000) to the largest sector with 70,000 jobs. The growth of health care employment is keeping pace with not only our 65+ population growth, but with the state’s overall population growth. Delaware’s growing aging population is likely to spur continued growth in the health care job sector. Over the past 15 years, Delaware's finance job sector has hovered around 48,000 jobs, but our manufacturing sector has decreased by 12,000 to 28,000 jobs. Delaware’s manufacturing job sector decline mirrors much of what has taken place nationally. But over the past six years, Delaware’s manufacturing sector decline has slightly outpaced the national trend. It’s wonderful that our health care job sector continues to grow, but Delaware needs to keep a diverse employment environment, and manufacturing jobs need to play a key role. A study by Ed Ratledge, Director of the Center for Applied Demography & Survey Research at the University of Delaware, points out that Delaware’s General fund expenditures will outpace the state’s revenue collection, and forecasts a gap to continue beyond 2020. While Delaware’s employment picture has greatly improved since 2008, manufacturing jobs have been slow to return. Growth in the manufacturing sector is critical to a prosperous Delaware. Manufacturing employment can create not only well-paying jobs, but drive employment in the job sectors that service those businesses. The Delaware State Chamber of Commerce is committed to working with stakeholders to revitalize Delaware’s manufacturing sector and drive economic growth. Diversified economic growth is essential to building a thriving Delaware economy. 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
A reminder for residents of the 10th Senate District, as if you needed one with all the mailers, ads, door knockers and other campaign activities blanketing the area, that the special election is Saturday, February 25th. The Chamber’s Board of Directors message on what we feel voters should focus on can be best summed up as:
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