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Legislators Call On Governor To End State of Emergency Citing Alarming Problems

From First State Update

A group of Delaware legislators is calling on Governor Carney to reopen the state.

In a letter dated April 30, 2020, the group said they can no longer remain silent and are urging him to end the State of Emergency.

Read the letter below:

Governor John Carney
Tatnall Building
150 Martin Luther King Jr. Blvd.
Dover, DE 19901
Dear Governor Carney,On March 12, you used your authority under the Delaware Code (Title 20, Chapter 31) to declare a State of Emergency in reaction to the perceived threat posed by the
COVID-19 pandemic. 

Since that time, you have renewed the State of Emergency and issued 13 modifications of the declaration.

We were supportive of the initial actions you took. Given the dire projections and the opinions of health experts at the time, we too believed these actions were prudent and necessary. Even when we have had differing opinions regarding the state’s response, our members have worked with your administration behind the scenes to present a united front during one of our state’s most difficult periods.

Today is the 49th day Delawareans are living under the restrictions imposed by your State of Emergency declaration. With the lives and livelihoods of our citizens under threat, we can no longer remain silent.

While COVID-19 poses a significant public health concern, the efforts to curtail its spread have created their own problems that are just as alarming…

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Delaware poultry worker files federal charges against local union, claiming violations

From The News Journal

An employee at a southern Delaware chicken plant has filed federal charges against the workers’ union representative, claiming “union officials are violating his and his coworkers’ rights by seizing union fees.”

Oscar Cruz Sosa, an employee at Mountaire Farms’ poultry processing plant in Selbyville, has filed federal charges with the National Labor Relations Board against the United Food and Commercial Workers (UFCW) Local 27 union for threats and other violations of federal law, according to a press release issued Tuesday by the National Right to Work Foundation.

Sosa said the union seized union fees “under an unlawful forced dues provision in the union contract,” according to the release.

Sosa’s charges also allege that a union official visited Sosa at his home in March and threatened him for submitting a petition seeking a vote to remove the union from his workplace.

The charges come after a debate over decertification of the union, which union officials previously said represents about 800 employees at Allen Harim’s processing plant in Harbeson and 1,000 at Mountaire Farms’ processing plant in Selbyville. The local union also represents workers in other industries throughout the state.

Union spokesman Jonathan Williams said Mountaire Farms and the anti-union National Right to Work Foundation are behind that effort, but that the union’s current focus is on the safety of its members inside the facility.

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Delaware’s Labor Secretary warns unemployment taxes after COVID-19 could hinder recovery

From WDEL

Delaware Department of Labor Secretary Cerron Cade said Delaware could be providing over $50 million a week in benefits soon, and the bill that will be due afterwards could hurt economic recovery.

Speaking during a Facebook Live Listening Session on Monday, Cade said Delaware has handed out around $30 million in unemployment benefits in each of the past two weeks, and that number could rise as more groups become eligible to file for unemployment during the pandemic.

Cade said they’ve applied for a loan from the federal government to help and also are getting relief from the federal CARES Act.

“The [total] number could be $850 million over the next three months alone. But more realistically, the state’s share of that will probably be a little bit less, in terms of what we’re going to have to figure out and handle, but it’s going to be a big number.”

Whatever the final cost to the state ends up being, Sec. Cade said one issue is going to be refreshing that fund, which could come in the form of higher unemployment taxes as businesses will be trying to land on their feet after some have been hindered or closed for weeks and months.

“If the state and federal government don’t figure out how to address that number across the states–not just in Delaware–you’re going to see a lot of businesses and non-profit organizations struggle to pay unemployment taxes and struggle to hire people as we try to dig out of this hole.”

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University of Delaware faces multimillion-dollar budget shortfall as coronavirus slashes revenue

From The News Journal

Unexpected costs from the switch to online learning, along with revenue losses from closing campus and canceling events, have the University of Delaware figuring out how to overcome a $65 million budget shortfall, UD President Dennis Assanis said in an email Monday.

The economic downturn that has accompanied the coronavirus pandemic has affected universities across the country.

Since closing campus in early March, the school has seen a significant revenue loss after having to refund prorated housing, dining and parking fees. Early in the semester, travel restrictions reduced tuition revenue from international students. Canceled events and athletic programs have cut off expected revenue streams as well.

Federal stimulus funds, as well as cost-saving measures like closing dorms and academic buildings, have helped push the loss from $65 million to $50 million, said university spokesperson Andrea Boyle.

But in an effort to “tighten our belts,” she said, the university has also rolled out a number of other budgetary measures — namely, a hiring freeze that could impact the university’s approximately 850 adjunct faculty members.

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Will Delaware raise taxes by $200M again?

The Delaware Economic and Financial Advisory Council (DEFAC) released the updated revenue forecast for fiscal year 2020 this week, and the outlook is dim. DEFAC estimates show Delaware’s revenues for FY 2020 down by $416M and FY 2021 revenues down by $273.3M, creating a deficit of about $748.7M, but that may not be the final impact.

The sentiment was clear in Monday’s DEFAC meeting: there are many factors in play impacting financial futures. The shape of the recovery curve, process of reopening, unemployment numbers, business closures, use of federal funds, and endless more items can impact the ability to recover from COVID-19. Governor Carney expects as much as $500M to $1B in lost revenues.

For Delaware, the worries don’t stop there. A Federal Reserve Bank of Philadelphia index report predicted Delaware to be one of 9 states with an economy predicted to shrink in the first half of 2020. Delaware also ranks 45thin the nation for short-term fiscal stability, which is bad news for budgeting legislators and struggling businesses and residents.

Before the pandemic, Delaware saw unemployment rise for six months straight and above the national average and was 34thfor employment. Now, more than 71,000 Delawareans have filed for unemployment since the pandemic began, as businesses shut down or laid off workers.

Unfortunately, instead of meeting to make difficult decisions to cut current spending or tap into reserves, our leaders decided to wait for a Hail Mary from federal funding. These funds cannot be used to offset lost revenue, and Delaware’s leaders are scrambling.

Lawmakers faced a similar struggle in 2017, when Delaware’s deficit was close to $400M. Later, in 2018, Governor Carney said:

“We are presenting a balanced, long-term solution to Delaware’s structural budget challenges that will keep Delaware economically competitive. This proposal requires shared sacrifice – and that starts with a commitment by state government to operate more efficiently and spend taxpayer dollars wisely…”

Despite this claim, spending cuts and sacrifices were temporary. The real sacrifice came from Delawareans who saw new and higher taxes totaling $200M in new annual revenue.

When Delaware recovered, the taxes remained and the new “surplus” became an excuse to continue spending.

Now that Delaware faces a deficit that is double what we saw in 2017, Office of Management and Budget Director Mike Jackson says that postponing planned capital projects and accessing reserves may be part of the answer, however, “All options are going to be on the table.”

This signals that the response may resemble 2017, and Delawareans could foot the bill through higher taxes.

In 2017, it was only the state government in crisis. Now, it is every Delawarean.

Taxes should not have been the answer in 2017, and cannot be the answer in 2020. We cannot ask more from those who have already been forced to close their businesses, who have been laid off work, and who cannot afford to answer for the consequences of poor financial planning and action from state officials.

Cutting the $233M in recently proposed one-time capital expenditures, utilizing the $252.4M in Rainy Day Funds and $126.3M in Budget Stabilization Funds, reallocating the tens of millions in the Strategic Fund, freezing agency budgets, suspending budget increases, and a critical look at our spending habits are the key to our recovery.

We have the ability to afford this pandemic without increasing taxes.

The question is: will we?

How will local leaders across Delaware respond to big budget gaps in wake of coronavirus?

From The News Journal

The effects of a coronavirus-driven economic crisis that is causing more than a half-billion-dollar hit to the state’s revenues will surely soon be felt in the pocketbooks of cities across Delaware, local officials said.

From lost parking revenue at Rehoboth Beach to utility payments that will never come from now-empty Newark college apartments, city, county and town leaders will face the possibility of cutting services or even the salaries of city workers.

Some, like New Castle County Executive Matt Meyer, say now is the time to keep people employed and even hire more, whether that means taking on debt or draining rainy day funds.

But others, like Wilmington Mayor Mike Purzycki, aren’t ready to make that jump.

Already in Wilmington, officials are combing through their proposed budgets for the fiscal year that starts July, looking to cut expenses as the likelihood of layoffs looms.

Among the first items on the chopping block are uniforms and equipment for next year’s Fire Department recruits, a chunk of the Police Department’s 20 planned new security cameras, college scholarships awarded by the Mayor’s Office and the grants of a few thousand dollars that it gives annually to sustain community nonprofits, officials said during ongoing budget hearings before the City Council this month.

“There’s a possibility that it’s going to impact everybody,” Purzycki said.

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Carney outlines criteria Delaware needs to meet to reopen economy

From Delaware State News

DOVER – Widespread testing, along with a decline in the number of new coronavirus cases, will be needed for Delaware’s economy to gradually reopen.

Delaware Gov. John Carney said Tuesday that the state is following the guidance of the White House task force document “Opening Up America Again.”

That guidance has three phases, along with gating criteria to meet before beginning each phase.

The first check box is a decline in cases.

Delaware’s number of new cases, by day, had been dropping. However, there is some flaws in the timeliness of test returns that has to be considered.

“You can see on this bar chart that we are on a downward decline,” said the governor during his Tuesday press briefing.

The chart showed 248 cases on Friday, 215 on Saturday, 207 on Sunday and 186 on Monday.

The Delaware Division of Public Health reported 269 new cases for Tuesday. How the state will apply the case numbers in a trend is problematic because of the way results are reported.

“To get to the starting line, you need 14 days of declining cases,” said Gov. Carney. “We do have to factor in the fact that the test results we get back kind of aren’t even and consistent. So we might have to correct for that in our day-to-day analysis.”

Test results have taken anywhere from a few days to two weeks to come back, he said. The exception is that the state lab results arrive in 24 hours.

Another important part of the criteria is hospital capacity, and so far Delaware’s hospitals have been able to handle the demands of the coronavirus.

Additionally, Delaware will need widespread testing that allows public health to have a “rigorous contact tracking system,” the governor said.

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Revenue losses could mean budget cuts, Delaware seeks more leeway from federal government

From The News Journal

Delaware’s state revenue forecast continues to plummet, and officials warn that they could have to make cuts to government programs if they can’t more freely spend the federal aid they received from Congress to fight the pandemic.

The state expects a $784.5 million decline in revenue over the next two fiscal years, based on the latest estimates reported on Monday by the Delaware Economic and Financial Advisory Council.

Much of that money had already been squared away in the governor’s spending plan for next fiscal year, which officials now expect to drastically rework.

The latest forecast could get more or less grim before the state finishes out this fiscal year. Lawmakers, who postponed the legislative session indefinitely in mid-March, have to pass a budget for the next fiscal year by June 30.

The forecast includes a $150 million hole in the budget that officials will have to find a way to fill before the end of this fiscal year, said Office of Management and Budget Director Mike Jackson. The state could dip into its reserves or postpone capital projects that haven’t started yet, he said.

“But if it gets worse, our measures will be stronger,” Jackson said, without offering specifics.

In Pennsylvania, about 9,000 state workers stopped getting paychecks earlier this month after their offices were closed amid the pandemic.

“All options are going to be on the table,” said Jackson, adding that Delaware is in a better financial position than other states because of its reserves. “What they (other states) may employ as a strategy to cope with fiscal challenges, we may not employ.”

When asked about potential pay cuts in Delaware, Carney said during a Tuesday press conference, “Our focus will be on protecting our state employees. … But we’re going to have to take whatever measures are necessary, obviously, to close the gap.”

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Delaware FY 2020 revenue downgraded by $400M amid crisis

From Delaware Business Times

DOVER – State fiscal analysts released their first look at the coronavirus’s economic impact on Delaware on Monday, when they estimated that the current fiscal year has taken a $416 million hit so far, now leaving a deficit of about $784.5 million in the governor’s nfe

With estimated general fund revenue of about $4.32 billion, the state would face a deficit of $150 million heading into next fiscal year – a stark turn from December when the Delaware Economic and Financial Advisory Council (DEFAC) estimated that the state would enjoy a $246 million surplus at the end of the year.

How that deficit is closed isn’t something that DEFAC, a non-partisan group of business and community leaders, academics, and government professionals that sets the state’s official revenue estimates, is tasked to consider, but the state does have reserve funds in tow for such an emergency. The larger question will be how the state contends with an expected downturn in revenues through next fiscal year, which runs July 1, 2020, to June 30, 2021.

Read more:

https://delawarebusinesstimes.com/news/budget-downgrade/

State House, Senate leaders seek flexibility in using $1.2 billion in federal coronavirus funds

From Delaware Business Now

Delaware State House and Senate leaders from both parties are asking the state’s Congressional Delegation for help in getting more flexibility in using more than $1 billion in federal  coronavirus aid.

The authors of the letter noted that money from the  Coronavirus Aid, Relief and Economic Security (CARES) Act provides $150 billion directly to states, territories, tribes and localities to combat the public health and economic effects of the COVID-19 pandemic.

Delaware is expected to receive approximately $1.25 billion under the omnibus measure. The funds will be transferred to states during the next two weeks.

“The CARES Act provides vital funding, but it restricts the money to unbudgeted expenses related to COVID-19. It cannot be used to address states’ revenue losses. This is far too restrictive for states like Delaware to effectively apply the federal funds. Being able to use these dollars to shore up Delaware’s operating budget is critical to maintaining services and recovering from this unprecedented crisis,” the letter stated.

Read more:

https://delawarebusinessnow.com/2020/04/state-house-senate-leaders-seek-flexibility-in-using-1-2-billion-in-federal-coronavirus-funds/