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.
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by James DeChene
The General Assembly entered its last week of the 2017 session with over 130 bills on the ready list, and with more bills being prepped and ready to go. Included in the mix are:
In addition to all of these bills, a budget has yet to be finalized as of this writing, and it remains unclear as to whether there will be a budget in place in time to avoid some sort of continuing resolution to keep the government operational through July. More info to come next week in the aftermath of the end of session. by James DeChene
This week saw the passage of two Chamber legislative priorities in the House—modernizing the Coastal Zone Act and enabling language to create a public-private partnership to replace DEDO’s current structure. Both measures now move to the Senate for consideration, and votes, next week. Many thanks to those of you who wrote letters supporting HB190 (Coastal Zone). If you haven’t yet written to your Senator, you can do so here: www.dscc.com/takeaction. Also this week, a series of tax bills were released from the House Revenue and Finance Committee. These bills raise the Personal Income Tax levels; remove itemized deductions (replaced with a higher standard deduction); gradually raise the age someone has to reach before they are eligible for the $12,500 exclusion of income for pensions and other retirement income; raise the excise tax on beer, wine and spirits; increase the tax on tobacco products; and increase the LLC tax. These bills will become part of the discussion on how to balance a roughly $350 million budget shortfall, and discussions continue on what expenditure offsets will be made to balance a 50-50 split to cover the gap. Next week is the last week of session for 2017. Hope remains that a budget deal can be reached prior to June 30th to stave off coming up with a plan to continue budget negotiations into July. 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
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 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
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
Two stories mentioned in this week’s Legislative Report bear some additional coverage. The first, from the News Journal editorial “Hard Economic Lessons For Delaware” pinpoints what the State Chamber has been talking about for the last few years, specifically on what appears to be a lackluster recovery from the Great Recession. With metrics and rankings all over the map, the picture of how Delaware’s economy has fared over the last few years remains murky at best. What remains, regardless of economic rankings is that public education, and other quality of life issues such as public safety, remain areas where much work needs to be done regardless of how Delaware compares economically to other states across the country and within our region. The other story comes from the Wall Street Journal outlining how factories are struggling to find workers. This is a story that rings true here in Delaware. For local manufacturers, a third of their collective workforce could retire within the next few years, leaving a major vacuum in employment. Add to that the profound difficulty manufacturers are having in finding suitable replacements, not just for engineering or management positions, but, most problematically, for entry level workers not requiring an advanced degree. Working together with the Delaware Manufactures Association, DelTech and the Governor’s office, we have started a successful program to help prepare high school students for these jobs. But and the range and scope of the education issues Delaware faces has become stark. This is becoming a constant, and repeated, refrain, from the State Chamber of Commerce and our members—Delaware’s education system requires a revamp if we want to have a workforce competitive to those around us– regionally, nationally and internationally. We are currently the 5th highest spend per student for the end result of 33% of Delaware 8th graders are proficient in math and English, with 60% of high school graduates who enroll at DelTech requiring remedial classes. These results do nothing to push Delaware forward, and will soon have even more of an impact on Delaware’s economic rankings when businesses choose not to come to Delaware because they don’t have access to a strong and vibrant (and educated) workforce. The News Journal has it right that education reform is a key component in securing Delaware’s future. State Senator Karen Peterson announced her retirement this week, to be effective immediately after the end of the 148th General Assembly, July 1st. With a candidate filing deadline of July 12th, those wishing to run face a tight time frame to announce, file and mount an effective campaign.
This week several bills of interest to the business community were acted on. HB 327, the Crowdsourcing Bill, passed the Senate and now awaits Governor Markell’s signature. The bill would allow for Delawareans to invest in startup companies, and these companies can raise up to $1 million. State Chamber supported legislation (HB 418) to correct a funding calculation issue for the Workforce Investment Board training fund was released from the House Labor Committee. It will go to a House floor vote soon. Legislation involving hospitals and care givers was released from the House Health Committee still containing a Chamber opposed amendment stripping liability protections for hospitals where upon discharge the lay caregiver of the discharged patient makes a mistake in care resulting in patient injury. With 6 days remaining this legislative session, and one more DEFAC meeting left to firm up the budget, expect much more legislation to be worked. |
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