by James DeChene
The bills that passed this week in Dover included an Equal Rights Amendment to Delaware’s constitution. The first leg of the amendment passed last year, in the 149th General Assembly, and the language contained in the amendment bars discrimination on the basis of sex. The House passed a measure allowing alcohol sales at the new 76’ers stadium, and the Senate passed a mini-bond bill providing more funds for capital improvements across the state. Each bill crosses the chamber to be heard next week. Also of note this week was Governor Carney’s State of the State address. The speech is used to review policies and initiatives this administration has put in place, and also serves as a blueprint for what will be this session’s priorities. The overview included a review of Chamber supported and implemented measures like the investment at the Port of Wilmington, passing the Angel Investor tax credit, the creation of the Delaware Prosperity Partnership, modernizing the Coastal Zone Act, and establishing Opportunity Zones all across the state to bring new jobs in places like Seaford, Newark, Dover, Milford and Claymont. New priorities outlined by Governor Carney included continuing to invest in broadband in Kent and Sussex counties, creating a new Transportation Infrastructure Investment fund to bolster economic development projects, and investing $60 million in education targeted a low income and English Language Learners and ensuring that all 3rd graders are proficient in reading at grade level. More to come as Governor Carney will release his recommended budget next week.
0 Comments
by James DeChene This week the State Chamber’s Transportation & Infrastructure Committee heard from representatives from DELDOT and Whitman, Requardt & Associates, updating the committee on the status of the 301 Project (on time and on budget so far), as well as a major renovation project for I-95 starting in 2020. Save periodic repavings, the highway between the I-95 and 495 split to above the Brandywine Bridge has remained virtually untouched for the last 60 years. The 2020 renovation project for I-95 will include a major structural and paving upgrade that will also include rehabilitation work for over 19 bridges and exit ramps, and will include other traffic flow improvements in the surrounding areas. Scheduled to take place over two years, this project will have a large impact on travelers both local and passing through Delaware. The purpose of the briefing was to alert the business community for potential planning purposes, including offsite or off-normal working hours for employees, as well as other logistics planning. More information will be forthcoming to the State Chamber membership, so stay tuned. 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
Congratulations are due to the winners of primary races in Delaware this past Tuesday. Special congratulations go to Chamber PAC supported candidates House Speaker Pete Schwartzkopf, House Majority Leader Valerie Longhurst, Representative Bryon Short, and Representative David Wilson. Closer to election day, we will be getting you a list of general election candidates, along with a notice of who the Chamber PAC has supported. Next year, as we’ve said before, is shaping up to be an active one from a legislative and regulatory perspective. It bears repeating that the issues important to your businesses—from employment law and health care provisions, to tax policy, to transportation and environmental regulations and all points in between, those you send to Dover will be making decisions that impact you and your employees directly. It is important to vote in November. Of particular note, on Monday, September 19, DEFAC will be meeting to make their forecast on Delaware’s revenue for next year and for projections on what the FY18 budget may look like. This is an important belle weather of how Delaware’s economy is faring, and there have been signs that several key areas of funding may be in jeopardy. Monday will give us a glimpse of how big a fight over the budget we can expect next year, so stay tuned for more. One other item to keep your eyes on is the upcoming change in overtime rules for employees. Following is a link to the most recent guidance on the issue if you haven’t been following it closely: https://www.dol.gov/whd/overtime/final2016/. by Mark DiMaio
The Chamber’s Committees are in full swing, with the Transportation and Infrastructure Committee meeting to discuss the Coastal Zone Act (CZA) and recommendations from the Clean Water Task Force and the proposed DNREC regulations regarding storm water management. The committee continues to discuss the modernization of the CZA and how to best stimulate economic growth in the zone. The Delaware Clean Water Task Force is looking at a new draft bill related to water fees that focuses on a fixed fee per each Delaware business versus a fee for every business tax parcel. Concerns remain with the recently proposed DNREC storm water regulations. The committee will work with member companies to find a workable solution to the proposed regulations. The Chamber’s Economic Development Committee (EDC) held its kick-off meeting last week. The Committee discussion focused on Delaware’s current development climate and ways in which the committee could engage on issues. Much of the committee dialogue centered on the importance of keeping pace with the rapid economic changes both locally and nationally. The EDC will concentrate its efforts on both short and long-term topics and issues that will best advance Delaware’s existing business climate and foster an innovative environment for future development. In coordination with other State Chamber Committees, The Delaware Manufacturing Association and the Delaware Public Policy Institute, the EDC will work with stakeholders to advance policies to strengthen Delaware’s economy. by James DeChene
Chamber Committee meetings have already started in 2016. With the General Assembly set to convene on January 12th, the Chamber’s policy committees are poised for action. Topics include the Healthcare Committee working to educate employers about the increase in narcotics/heroin addiction in Delaware, reducing the stigma of addiction, what signs to look for in employees and various treatment options available. Look for a spring event panel discussion to learn more. The Tax Committee will be looking at ways in which to help make Delaware more attractive for businesses to relocate to and expand in Delaware, and will be reviewing tax related legislation and regulations as they are drafted to provide feedback. The Transportation and Infrastructure Committee will be looking at the drafted Water Usage Fee bill that was created as the result of a Clean Water Taskforce. Chamber members have been participants on that taskforce and have provided industry knowledge to help craft the bill. The Employer Advocacy and Education Committee is expected to meet soon to discuss various labor legislation including an expected bill to increase the minimum wage in Delaware to $15 by 2023. The Environmental Committee will be having their spring event with a speaker TBD, and with potential changes to the Coastal Zone Act this year, they will undoubtedly have feedback to offer as well. For more information on how to participate on a committee, contact James DeChene at jdechene@dscc.com. At the suggestion of the Chamber’s Young Professionals Group, the State Chamber will reconvene its Economic Development Committee early 2016. In the early 2000s, the committee was mothballed due to a quickly expanding Delaware economy. After the housing bust, the State Chamber’s policy efforts went into supporting policies to stabilize Delaware’s economy. Much has changed over the past few years and the time is right to put additional emphasis on economic development issues.
Mike Vanderslice, VP of Sales and Marketing for Environmental Alliance, will chair the committee and is part of the next generation of State Chamber leadership. The Committee membership will include younger executives as well as more seasoned leaders covering a diverse number of industries throughout the state. The Committee’s mission will focus on expanding economic opportunity, an issue that’s important to all Delawareans. Internally, the Committee will engage other DSCC Committees such as Tax, Transportation & Infrastructure, Environmental and Employee Relations along with Board of Governors in developing and advancing the State Chamber’s economic development policy. As part of the mission, the Committee will partner with DEDO, County and City Economic Development Offices, as well as local chambers to promote policies that support existing industries and foster a business climate that attracts new and innovative companies to Delaware. by Mark DiMaio
Back by Popular Demand….. (hint – it’s not the album by Rapper Kurtis Blow) At the suggestion of the Chamber’s Young Professionals Group, the State Chamber will reconvene its Economic Development Committee later this fall. In the early 2000s, the committee was mothballed due to a quickly expanding Delaware economy. After the housing bust, the State Chamber’s policy efforts went into supporting policies to stabilize Delaware’s economy. Much has changed over the past few years and the time is right to put additional emphasis on economic development issues. Mike Vanderslice, VP of Sales and Marketing for Environmental Alliance, will chair the committee and is part of the next generation of State Chamber leadership. The Committee membership will include younger executives as well as more seasoned leaders covering a diverse number of industries throughout the state. The Committee’s mission will focus on expanding economic opportunity, an issue that’s important to all Delawareans. Internally, the Committee will engage other DSCC Committees such as Tax, Transportation & Infrastructure, Environmental and Employee Relations along with Board of Governors in developing and advancing the State Chamber’s economic development policy. As part of the mission, the Committee will partner with DEDO, County and City Economic Development Offices, as well as local chambers to promote policies that support existing industries and foster a business climate that attracts new and innovative companies to Delaware. by James DeChene
According to the Des Moines Register a recent 10-cent-per-gallon gasoline tax hike is boosting Iowa road construction funds and hasn’t dampened motorists’ enthusiasm for driving, state records show. Reports filed between April and July show that motor fuel tax collections totaled about $225 million, an increase of about $76 million over the same period last year, according to the Iowa Department of Revenue. Although the higher tax took effect March 1, reporting of the data lags by one month. On Saturday, the statewide average cost of gasoline in Iowa was $2.46 per gallon for mid-grade fuel, which was 83 cents a gallon less than the $3.29 per gallon for the same date a year ago, according to the AAA Daily Fuel Gauge Report, and the increased fuel tax revenue has enabled the Iowa DOT to add about $500 million worth of road projects to its five-year highway construction plan. Delaware faces a $780 million funding shortfall over the next 6 years for planned DELDOT projects, and with gas prices currently low, and expected to stay low for the foreseeable future, the discussion should be started on what a gas tax increase would look like for Delaware. The Chamber position has been supportive of a gas tax as long as the proceeds are solely used for transportation infrastructure and if there are spending offsets to cover any additional revenues required. By James DeChene
Transportation Infrastructure Funding In the aftermath of last year’s failed measure to raise the gas tax to help fund infrastructure projects, the goal this year was for the General Assembly to find $50 million to dedicate to infrastructure funding, with Governor Markell pledging to borrow another $50 million. After spending months negotiating on how to come up with the required money, the General Assembly passed legislation that will raise just under $24 million by increasing a number of DMV fees as well as the document fee associated with new car sales. In addition, $5 million of DOT operating expenses was transferred out of the Transportation Trust Fund responsible for funding infrastructure projects. As part of the negotiated deal, the money will be placed into a “lock box” dedicated for spending on transportation, the threshold for prevailing wage projects was raised, and prevailing wage will not be applied to the $20 million allocated to municipal street aid and the Community Transportation Fund, both of which fund local transportation improvements, such as filling potholes. The State Chamber expressed early support for all three add-ons, and lobbied diligently in support of a larger overall package that would have raised the goal of $50 million, and we hope that further action is taken in 2016 to help overcome the expected $780 million in anticipated shortfall over the next six years in much needed infrastructure projects. Beginning to Transfer DOT Operating Expenses from Transportation Trust Fund In 1991, due to the recession, the General Assembly moved a portion of DELDOT operating expenses out of the General Fund and into the Transportation Trust Fund in order to balance the budget without resorting to a tax increase. Over the intervening years, with increases in salaries, retirements, health care expenses and other costs continually rising, the ratio of operating expenses to actual money used to fund projects has increased dramatically, resulting in an estimated $780 million shortfall over the next 6 years for transportation projects. The General Assembly took the first step of transferring $5 million of operating expenses back into the General Fund, and has indicated the goal of both continuing the process, and increasing the amount transferred, in future years. Abandoned property Two bills were passed related to how Delaware collects abandoned property, also known as escheat. Currently representing 14% of the state’s operating budget, this $500+ million revenue stream has come under fire from the business community at large over the last few years, resulting in a taskforce that met over the summer and came up with many of the proposals that were contained in these bills. They include limiting the total number of audits any one outside contractor can be assigned and requires all contracts with such contract auditors to assure that they will not employ or compensate senior officials from the Department of Finance involved with their work for two years after such officials leave state employment. It also directs the Secretary of Finance to prepare and promulgate a detailed manual containing procedural guidelines for the conduct of Delaware unclaimed property examinations and to update its regulations accordingly. The second bill shortens significantly the “look back” period from 1981 to 1991, and going forward will be a rolling 22 year “look back” starting in 2017. The bill also changes how companies can be audited, specifying they must first be offered the opportunity to enter a Voluntary Disclosure Agreement program. The State Chamber was involved in the process from the outset, and is pleased to see sustentative modifications made to the program. Studies on Revenues and Spending The Delaware Economic and Financial Advisory Council (DEFAC) was directed by Executive Order to create a taskforce charged with reviewing Delaware’s revenue streams and how to plan for the future. The taskforce issued a lengthy report outlining ways in which to increase revenues to keep up with state spending. During the process, it was lamented that no similar taskforce was created to review state expenditures, and a concession was made by budget writers this year to have Pew Charitable Trusts study how and what the state spends money on in an effort to make government more efficient. That study should be completed in time for next year’s budget process. Budget As mentioned above the budget this year was a difficult process for the General Assembly to undertake, and ultimately did little to plan for the next fiscal year. The State Chamber was disappointed that one-time monies stemming from bank mortgage settlements were used to fill budget gaps, that there was no requirement that state employees contribute more to their health insurance costs, and that no serious review of overall state spending was undertaken this year. The State Chamber will continue to review areas in which the state can be more effective and efficient when creating its budget. No change to the Estate Tax The Chamber has called for the elimination of the Estate Tax, but no action was taken this year. A disincentive to retirees, as well as a costly and inefficient program, the state has not seen the tax perform as a revenue stream in any meaningful way, and it puts Delaware at a competitive disadvantage to states like Florida. Minimum Wage A bill expected to be introduced next year will call for an increase in the minimum wage. This comes on the heels of a taskforce created to study low wage workers and the impact an increase in the minimum wage would have on the economy, on workers and on businesses. With impacts being felt in cities like Seattle and Los Angeles, both of which saw dramatic increases in minimum wages—up to $15 an hour, the General Assembly should look to those examples as a cautionary tale before considering a mandated wage hike, and instead look to how businesses like Walmart and Target have already raised their minimum wages to above the Federal level as the economy has improved. Adjustments to PIT, Corporate Franchise Tax and Gross Receipts Tax Already on the table is a proposal to add two top tiers of personal income tax levels as well as a proposal to increase corporate franchise tax thresholds. These come on top of earlier proposals to cut corporate income tax rates, and increase the Gross receipts tax. The State Chamber is on record urging the General Assembly not to simply raise taxes to close budget holes, but to focus first and foremost on areas in state government that can be trimmed or eliminated. |
Archives
April 2024
Categories
All
|