By James DeChene, Armitage DeChene & Associates
The Delaware State Chamber of Commerce respectfully offered a number of policies to the 151st General Assembly that, if enacted, would assist the business community in rebounding from the impact of the COVID-19 pandemic, while at the same time help Delaware workers find new opportunities.
TAX CREDIT FOR RAPID WORKFORCE TRAINING & REDEPLOYMENT INITIATIVE HIRES
This past summer, Governor Carney issued Executive Order #43, which established the Rapid Workforce Training and Redeployment Initiative, a time compressed curriculum to be focused on in-demand industry sectors and/or occupations. The program will make available certificate programs, certification programs and access to the Today’s Reinvestment Around Industry Needs (“TRAIN”) program to help prepare Delaware workers who may have been displaced by the impact of COVID-19 find a new career path. The State Chamber recommends a refundable tax credit be made available to employers who hire graduates from these programs much the same as the credit for hiring veterans and those with disabilities.
ENGAGE IN CREATING PROCESS-RELATED EFFICIENCES IN OVERSIGHT AGENCIES
In recent years the State Chamber has focused on the process log jams that serve as impediments to development in Delaware. By working with agencies like DelDOT, the Chamber worked to streamline plan review process, resulting in simple project submission documents for a number of common projects, like curb cut-outs and driveway access. The Chamber has commitments from DelDOT to continue to find ways to streamline these processes, and now will be working with DNREC to do the same. These partnerships serve to find innovative solutions to issues without sacrificing public input and holding accountable applicants with incomplete application submissions.
FOCUS ON CHILDCARE
It is estimated nationally 30% of childcare facilities will not reopen due to the COVID-19 pandemic. The impact to employers and employees will be felt across all sectors and become a challenge for all to overcome. Access to childcare in increasing in importance as businesses continue to reopen and expand operating capacity. While not a crisis in Delaware yet, the State Chamber urgers a proactive response by the General Assembly to prepare for this eventuality.
In addition, the State Chamber will be working with our Federal delegation to make much needed changes the CARES Act. A top priority change would be to extend the deadline for spending appropriated funds. Many programs Delaware directed CARES dollars towards, including expanding rural broadband, are a long-term investment due to construction needs, etc. While the State can appropriate these dollars, it is next to impossible to actually spend the money prior to the current deadline. Other priorities include an expansion of COVID-19 testing to help ensure businesses remain open, which in turn helps state finances and negates a need for tax increases next year.
2021 is bound to be a period of flux and transition. With the impacts of the COVID-19 pandemic still being felt, the possibility of a vaccine being developed and distributed, along with a new President, Congress, Administration, and our own General Assembly, the business community should prepare itself to be more nimble than ever with change happening at lightning speed.
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.
by James DeChene
The CZA Regulatory Advisory Committee met earlier this week for the fifth time. During the meeting, reports were given from the various working groups focusing on individual components of the legislation’s requirements, including how to account for sea level rise, providing financial assurance, and how to monitor bulk product transfer. Of the reports, an agreement of sorts was reached on definitions related to bulk product transfer, while the other topics will be revisited in future meetings based on the amount of material needed to review. Regulations are to be finalized by 10/1/19, and with a little less than a year left, there remains quite a bit of work to be completed.
The State Chamber’s Healthcare & Employer Advocacy and Education Committees hosted a joint event focused on the legal and human resources issues of opioids, drugs and alcohol in the workplace. Attendees were presented with three case studies involving small, medium and large businesses, with a variety of circumstances surrounding employee behavior, benefits and worst-case scenarios.
Next week is the State Chamber’s “Developing Delaware” event taking place in Dover at the Modern Maturity center. Focused on how Delaware compares with surrounding states when reviewed by site selectors, looking at Delaware “By the Numbers” and hearing success stories from around the state, this is a great opportunity to learn about economic development activity happening in Delaware. With over 200 attendees already registered, it will be a great networking event, too. To register, visit: http://web.dscc.com/events/Developing-Delaware-Conversation-Collaboration-Innovation-2175/details
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 Mark DiMaio
Over 250 people attended the State Chamber’s annual Spring Legislative Conference & Manufacturing Brunch. This year’s conference, called “The Future Is Now: Reinventing Manufacturing in Delaware,” highlighted Delaware’s commitment to energizing its manufacturing base.
"Manufacturing makes Delaware stronger," said Congresswoman Lisa Blunt Rochester during her opening remarks highlighting the importance of manufacturing in Delaware. The conference keynote speaker was lean manufacturing expert Gary Convis, formerly with the Toyota Motor Corporation and now a senior advisor at Bloom Energy. Mr. Convis brought the “Toyota Way,” a management and manufacturing approach that offered streamlined processes and leadership that is committed to continuous employment for its workforce. He spoke to the importance of developing leaders that create an environment that empowers their employees to stop a manufacturing production line if they detect a problem.
Governor John Carney provided the brunch keynote speech focusing on working together in a bipartisan manner, like the creation of the public-private Delaware Prosperity Partnership to enhance Delaware’s high quality workforce. The Governor also highlighted the importance of a regulatory and tax environment that encourages manufacturers to grow and locate in Delaware. A special thank you to Dr. Mark Brainard for hosting the conference at Delaware Tech’s Del-One Conference Center.
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
by James DeChene
In Matthew Albright’s recent op-ed for the News Journal, which was well written and with which I largely agree, he made the argument that it’s time for Delaware to answer the question of how much government it is willing to have its citizens pay for. Albright’s article echoes a sentiment I’ve made with elected officials—there needs to be an audit of what government should be, what services it wants to provide, and then, how to pay for them.
Delaware has done an excellent job of outsourcing its tax and revenue liability onto entities outside the state. From the $1.1 billion it collects from the Corporate Franchise Tax, $400 million in escheat, and about $100 million combined from the Corporate Income Tax and Bank Franchise Tax, that represents an easy-to-calculate roughly 40% of the state’s annual budget. That number doesn’t take into account tourism, other items visitors cross the border for – tax free shopping and low(ish)-taxed cigarettes – or tolls on I-95 and RT1, which pushes our percentage even higher.
As Albright outlines in his article, Delaware is one of the top five per capita spenders on government, based on studies from the Brookings Institution and the Kaiser Family Fund. This fact, in spite of Delaware having one of the lowest tax liabilities in the country, has allowed state spending to rise without its citizens feeling the pain. Or so the story goes. The business community, however, has seen its share of costs mount each year, from double digit increases in health care costs, increases in the costs of doing business from additional regulatory burdens imposed by the state, as well as increases in other operating costs such as utilities.
The answer to the question of whether an increase in taxes is necessary to cover increases in state government is, in our view, going after the solution the wrong way. Focusing first on what Delaware’s government should look like, and on making government more efficient, should be the answer. Simply saying more money is needed, without combined efforts to eliminate duplicate or wasteful spending is a recipe for the continued trend of businesses relocating, and residents moving across state lines.
by James DeChene
A recent article highlighted 2 dozen businesses leaving California in the wake of the passage of Prop 30, which amounted to a $6 billion increase in taxes in the Golden State. A recruitment drive by neighboring Arizona, which boasts lower taxes, a streamlined permitting process, and a reduction in other business regulations, has led to an influx of 50,000 people moving into Phoenix in the last year, while California has seen a net migration of 100,000 leaving the state. Other contrasts include California considering another paid holiday for state employees, while Arizona has placed a moratorium on new business regulations. While California ranks dead last by the Small Business & Entrepreneurship Council, Arizona is ranked 8th, and Delaware is 34th.
There are important takeaways applicable to Delaware from the linked-to article and study. Namely that as the General Assembly focuses its attention on expanding regulations on businesses and expanding benefits to state employees, instead of focusing on how to make Delaware more attractive for businesses not just to incorporate but to relocate here, other states are going to continue to eat our lunch.
Delaware State Chamber of Commerce Applauds “Delaware Growth Agenda” Released by Delaware Business Roundtable
Delaware State Chamber of Commerce President & CEO Richard Heffron released the following statement applauding the Delaware Business Roundtable releasing their Delaware Growth Agenda, which outlines steps Delaware should take to secure its economic future.
“Today’s release of the Delaware Business Roundtable’s Delaware Growth Agendareinforces what the Delaware State Chamber of Commerce, and other business groups, have been saying—that in order for Delaware to have sustained and successful long-term economic growth there needs to be a commitment by elected leaders to make difficult decisions.”
“The industries that have long defined Delaware are changing, and Delaware must adapt and change to remain relevant to business on decisions to expand or relocate here. A renewed commitment to education and workforce development, developing an entrepreneurship climate, continuing a nimble approach to economic development and focusing on pro-business legislation and regulations all must be a part of a successful Delaware.”
The Delaware State Chamber of Commerce is dedicated to promoting an economic climate that strengthens the competitiveness of Delaware businesses and benefits citizens of the state. Founded in 1837 as the Wilmington Board of Trade, the Delaware State Chamber of Commerce has a long history as the largest, most influential business organization in the state. Learn more at www.dscc.com.
Contributed by Scott Malfitano and Michael Houghton
The Pete du Pont Freedom Award is named after one of Delaware’s most distinguished leaders. As Governor of Delaware, Presidential candidate, founder of GOPAC, scholar at the Hudson Institute and the Council for National Policy and as a spokesman and writer, Pete du Pont has been a national leader in the cause of preserving and enhancing individual freedoms.
As Governor, Pete du Pont led the effort to dramatically reduce tax rates because he trusted individuals, rather than the government, to do a better job of spending their own money. He led the effort to de-regulate the financial services industry in Delaware, because he trusted free markets – more than governmental controls – to bring more opportunity, more jobs and a higher standard of living to all citizens. With the lower tax rates and government de-regulation during Pete du Pont’s tenure as Governor, Delaware shot to the forefront among states in economic growth.
Also as Governor, Pete du Pont was an effective bi-partisan leader in the State house in Dover. After significant disagreements and budget battles with his democratic colleagues in the first year of his first term, he and they learned how to work collaboratively for the benefit of all Delawareans. It was this bi-partisan effectiveness, in addition to the aforementioned reduced taxes and de-regulation that prepared the State for the arrival of the Financial Services Development Act of 1981.
As a Presidential candidate, Pete du Pont was a leader before his time preaching the gospel of individual freedom. He boldly – and at considerable political cost – espoused the causes of education vouchers giving parents rather than government the ultimate control over the education of their children; private alternatives to the Social Security system; and free market alternatives to our national healthcare system.
Following his political career, Pete du Pont continued to work, speak and write on many causes for individual freedom; lower taxes, de-regulation, education reform and individual healthcare and retirement accounts – just to name a few. In his own words:
“Democratic capitalism is strengthened by encouraging individual as opposed to collective choice. America has not prospered over 225 years through collective action; it has prospered because people have been allowed to seize their own opportunities.”
The Pete du Pont Freedom Award Reception takes place on Thursday, October 1, 2015 at 6 p.m. at the Hotel du Pont. This year’s award recipient and keynote speaker is Ellen Kullman.
Register online today.