by James DeChene
In case you missed it, the News Journal, WDDE, and DE State News all had articles on a proposal by Governor Carney and Treasurer Simpler to create a budget smoothing process. Efforts would help avoid budget boom and bust cycles like last year where nonprofits and other agencies saw funding cuts. It helps the business community by providing certainty and avoiding knee jerk funding needs resulting in higher taxes and fees.
Here is a roundup of recent coverage on this issue:
by James DeChene
This week the General Assembly passed the Angel Investor tax credit bill, and it is on its way to Governor Carney for his signature. You may recall that the bill provides a tax incentive for investors to fund Delaware startups. The Chamber is supportive of the legislation and is looking forward to hearing success stories in the future.
SB170, which would raise the minimum wage in Delaware in increments topping out at $10.25, was heard in committee this week and is currently awaiting further action. The Chamber, other business groups, and business owners testified against the legislation. It is unclear on the timing of when it will reach the Senate floor for a full vote. The Committee also released SS1 for SB76, which mandates employers working on certain public works projects have Department of Labor certified apprenticeship training programs in place. The bill, opposed by the Chamber, would disproportionally hurt small businesses and companies that are open shop.
The General Assembly is in next week, and will then break for three weeks, returning June 5. The Chamber’s Small Business Day in Dover is next Thursday, May 10. Click here to register.
by James DeChene
This week, the Senate passed an amended version of the Angel Investor tax credit legislation, and it’s on its way back to the House for a vote. The bill would provide a refundable tax credit for qualified investors investing in qualified Delaware companies, and is meant to encourage investment in startups. The State Chamber has been supportive of the bill and is looking forward to House passage.
In the House Labor Committee, the vote was deferred on legislation mandating employee sexual harassment training. Concerns were raised on proposed length of training time, how training would take place, liability protections for employers, as well as how independent contractors would be trained and protocol for their would-be-new ability to bring a complaint against a contract holder. The bill sponsor is working on an amendment, and the Chamber will continue to provide feedback through this process.
Next week Senate Labor committee will hear SB170, the latest version of a minimum wage increase.
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
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 James DeChene
This was another week where the primary focus was firearm legislation, but a few bills of note related to business have been either acted on or introduced.
Of note, a new minimum wage bill was introduced this week, SB170. This would raise the minimum wage $.50 a year, starting in 2018, for 4 years, bringing the wage to $10.25 in 2021. Also, rumor has it a bill raising the rate to $15 will be introduced later in session.
A bill offering a tax credit to businesses that supply a defibrillator in the workplace made it through the Senate and out of House Committee. It sits on the House ready list awaiting action. The bill offers a one-time $100 tax credit for companies that purchase a machine.
The General Assembly is on Easter Break for two weeks and will return on April 17.
by James DeChene
This week’s legislative work was cut short a day to due weather. Bills that were to be heard in committee will be heard in the coming weeks. Of note, on Tuesday the Senate defeated SB10, which, as amended, would have raised the minimum wage by $1.00 over two years. It is expected that after work is completed providing casinos tax relief, the minimum wage bill will be reintroduced and voted on. Stay tuned.
In other news, DEFAC met earlier in the week and added $101 million in additional revenues for FY2018 and projected 2019. It is rumored that in the next meetings that number could grow even larger. This means a new round of budget fights this year—only this time on how to spend this windfall.
It is worth noting, however, that the two primary increases came from personal income tax (PIT), and fewer claims on abandoned property. The abandoned property money is already earmarked for returns, no matter the pace, and is not what you base a budget around. As PIT has increased from the federal GOP tax plan, corporate taxes (CIT) have declined. One bright side is that Delaware may be due a onetime windfall as companies bring back money parked overseas to take advantage of the lowered US corporate tax rate. The IRS is still working to publish guidelines on how this tax money will reach the states. More to come.
by James DeChene
This week, the last before the General Assembly returns post-Joint Finance Committee break, saw two meetings of interest to the Chamber. The first, was the Joint Sunset Committee hearing on Hazardous Substance Cleanup Act (HSCA) funding, which is used, in part, to incentivize the clean-up of brownfield sites. The Chamber has been supportive of this program due to its usefulness in helping to remediate and bring back into use dirty sites across Delaware, as well as the proven return on investment the program provides. According the University of Delaware, for every dollar spent in HSCA, there are over $17 dollars brought back in economic development. Funded by a tax on gasoline wholesalers, the program funding is generally spent as soon as appropriated in July. As gas prices remain down, there is a direct negative impact on the amount of funding the program receives. There is talk of working to create a mechanism that would include a floor and a ceiling for the tax rate, depending on the price of gas, in order to provide sustainable funding for HSCA. More to come on that.
Also this week, the taskforce created to explore the legalization of marijuana in Delaware met, and there was some confusion during the meeting on how a vote for the release of the taskforce report would take place, and what, in fact, the vote would mean. Due to that confusion, the vote to release failed. There is another meeting next week, March 7, where there may be another vote held, but that remains to be seen.
Next week, the General Assembly returns. There may be a Senate vote on SB10, the minimum wage bill. As of now, the latest amended version calls for a $.50 raise in October 2018, with another $.50 raise to take place in October 2019. Right now, the minimum wage stands at $8.25. The bill is expected to pass the Senate, and there will be the opportunity for businesses to be heard when it reaches committee in the House. More to come on that, too.
by James DeChene
This week saw the confirmation of former DEDO director Cerron Cade to fill the vacant Secretary of Labor position. The Chamber looks forward to working with Secretary Cade in this new position on issues important to the business community.
Also this week, HB106 was released from committee, which would add two additional personal income tax brackets at $125,000, with a rate of 7.10%, and an additional bracket of $250,000, with a rate of 7.85%. The State Chamber spoke against the bill, noting that it would add volatility to Delaware’s revenue collection at a time when efforts are being made to make Delaware less reliant on volatile sources of revenue. This reliance has an increasing deleterious impact on the State’s long-term sustainability.
Governor Carney released his recommended budget, an increase of 3.49% over last year, which calls for increased spending on education, public safety and making investments in economic development and workforce development. It also includes an increase in the bond bill, along with $100 million in cash as one-time money for projects. Door openers, including class room growth, employee pensions, child care and transportation, were about $60 million in increases.
It also includes:
$12.5 MM — strategic fund
$2 MM — Prosperity Partnership
$9.6 MM — research collaboration
$19.5 MM — high education capital construction
$391.1 MM -- DELDOT road systems
$6 MM — clean water/drinking water
The Chamber will be monitoring ongoing budget discussions and will update you with pertinent info.
The General Assembly returns next Tuesday with a full plate. Work will commence stemming from taskforces that met over the summer and fall, which include school district redistricting and changes in funding models, and the legalization of recreational marijuana. Thrown into the mix will be legislation to raise money to invest in clean water infrastructure, incentivize angel investors to provide capital to small startups in Delaware, and the fight on minimum wage legislation will no doubt continue. These bills, and ones to come, will be the focus of the Chamber this legislative session, along with continuing to implement legislation passed last year—namely the Delaware Prosperity Partnership and the regulations surrounding modernizing the Coastal Zone Act.
In addition, the Chamber will be involved in ongoing budget discussions as the Administration and General Assembly continue to search for ways to address Delaware’s long term economic growth and sustainability. What will be interesting to see this year, is how the Federal tax plan will impact Delaware. Much of what was contained at the Federal level was proposed at the end of last year’s session to help fill a $350 million budget gap, including increasing the standard deduction, reducing itemized deductions, and modifying personal income tax bracket levels. If the projections the state Department of Finance provided last year hold true, that could mean big money for Delaware coffers, and reduce the chances for last minute budget battles this year.
All this, and more, to come. Stay tuned.