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Up to $136 million will support statewide programs addressing COVID-19 impacts

From Delaware State News

NEW CASTLE  – Up to $136 million from the New Castle County’s federal CARES Act allocation will support six state-wide programs targeting unemployment insurance, childcare, coronavirus testing and more, New Castle County Executive Matt Meyer announced this week.

This funding will supplement the $927 million of CARES Act funding the state received directly from the federal government.

Mr. Meyer and the state developed a three-step approach for the funding agreement.

They determined the total cost of all six statewide programs, then determined the percentage of the cost of those six statewide programs for the benefit of county residents and businesses, and finally, determined the cost share between the state and New Castle County.

“We always work collaboratively with our federal, state and municipal governments but particularly in times of crisis,” Mr. Meyer said in a prepared statement. “My thanks to County Council, to the Governor’s office and to Delaware’s Office of Management and Budget to reach this agreement to help keep our community healthy and sustain our economy during this crisis.”

Statewide programs that New Castle County CARES Act funding will support the Unemployment Insurance Trust Fund, the essential childcare program, statewide testing, statewide contact tracing, an enhanced rent and utility program and a hospitality emergency loan program.

Based on actual unemployment claims through mid-September and estimates through the rest of the year, the total statewide amount of COVID-19 unemployment claims paid for the forty-two-week period, March 15 to Dec. 30, will be $273 million. Approximately 55% of the statewide claims are from residents in New Castle County. A county contribution up to $67.5 million will be made.

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Bayhealth to build $35M ER center, hybrid office near Milton

From Delaware Business Times

MILTON — One year after withdrawing an application for a freestanding emergency department 2 miles east of Harbeson, Bayhealth will be moving forward with opening an emergency room and walk-in care center within the next two years.

The $35 million facility will bring primary care physicians, specialists, diagnostic services and emergency care to southern Delaware on 18 acres near the intersection of Lewes-Georgetown Highway (Route 9) and Hudson Road. Early plans show a building measuring between 30,000 to 40,000 square feet and Bayhealth officials anticipate creating between 50 and 75 jobs. The walk-in center and emergency department approved by the Delaware Health Resources Board is estimated at $10.2 million.

Bayhealth’s Milton facility represents the health care system’s growing reach in southern Delaware and the announcement more than a year after opening a new $315 million facility in Milford. Bayhealth also partnered up with Nemours Children’s Health System on a new facility there, and Nemours will open primary care and senior care in November.

“Sussex County is growing at an exponential rate. The area directly surrounding the location of our new center, along Hudson Road and Route 9, is growing especially fast,” Bayhealth President and CEO Terry Murphy told Delaware Business Times. “There are also very few health care providers located in close proximity to our new site. This new location will provide our southern Delaware community with much-needed health care services all located in one convenient center.”

The land around Route 9 has one of the fastest  growing populations in Delaware, increasing 21% from 35,295 residents in 2010 to 42,729 in 2019, according to a study done by the marketing firm Claritas Company. The 65 and older population is particularly booming, growing nearly 60% in the same span to 10,135 residents. In the next four years, the overall population is projected to grow 8.2%, including an 18% growth in senior residents.

Beebe Healthcare, based in Lewes, has also been striving to meet the surge in people in the last decade. This spring, Beebe opened a freestanding emergency department and a cancer center at the Beebe South Coastal Health Campus near Millville. Construction work is also underway at Beebe’s $124 million surgical hospital on Route 24 near Rehoboth Beach with a target opening in 2022. Recent plans for a Milton campus recently were withdrawn.

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Killing jobs and cutting wages does not help workers

If Delaware wants to understand the ramifications of various employer mandates featured on many platforms this election season, they can look north to Connecticut. Connecticut’s proposed bills in 2018 included family and medical leave, expanded paid sick leave, and minimum wage hikes. The implementation and compliance costs of these mandates to taxpayers and businesses were estimated to be up to $530 million.

Connecticut Business and Industry Association President and CEO Joe Brennan expressed concern that long term talks about the difficulty of having one-size-fits-all mandates on employers applied to these bills as well. Added costs and administrative burdens expected to accompany these and similar measures are bad news for an economy as businesses will be forced to lower wages or cut jobs entirely.

You hear people ask, “Why not mandate that employers can’t do these harmful things?” Unfortunately, these things cost money that has to come from somewhere. Businesses are experts in finding ways to be able to stay afloat and keep their doors open and will have no option but to make cuts if saddled with these costs.

Connecticut’s paid leave benefits were set to be funded by mandatory deductions from employee wages, exchanging income for benefits. On top of this, taxpayers would fork over $18.6 million annually to administer these plans. The costs impact more than just the employees and tax payers: businesses’ bottom lines will be impacted, especially for companies that are operating on very small profit margins, like small businesses.

So what can businesses do?

The easy answer is to cut wages or cut jobs to make up the additional costs. Automation is rapidly expanding in the business world, and is a cheaper option in the long term to having increasingly expensive, and often unreliable, human labor. Robots could occupy 38% of jobs in the U.S. economy by 2030, and boost productivity, manage labor costs and improve operational predictability for large and small businesses. Small businesses like transportation and storage, manufacturing, retail and other industries, are the most likely to adopt these changes in the near-term. They’re also the ones who will be hardest hit by the proposed employer mandates.

In addition to or to avoid layoffs or automation, businesses could also raise prices to pass the cost onto the consumer. In this instance, the business still faces higher costs, but now the tax payer is paying twice to fund these mandates. If the costs become too high and sales suffer, layoffs are back on the table.

You can’t force a company to hire associates but you can certainly force them out of a burdensome state or country they can no longer afford to operate in—and they’ll take their jobs with them.

When our workers, small businesses, and overall economy are already struggling to get back on their feet after COVID, anything that could provide such widespread damage should be off the table. The 2021 Legislative Session should focus on helping Delaware workers and businesses, not forcing them into unemployment and bankruptcy. This election will determine if our workers and businesses can recover, or if costly and burdensome mandates will cause more job loss and small business struggle. Delawareans must make the best choice for the future this November.

As Delaware’s bioscience sector grows, space is in short supply

From Delaware Business Times

From the earliest scientific advancements made at DuPont more than two centuries ago to the brand-new cancer therapies being developed by Incyte, Delaware has a long history of laboratory-based research and development.

As the competition for those future-billion-dollar companies heats up, however, the First State is often at a disadvantage when it comes to retaining such startups. The state has fostered an environment of innovation, often connected through the University of Delaware, but it is now watching expanding companies seek out-of-state spaces to further their growth due to a lack of resources here.

According to a recent survey of 60 companies that utilize labs by the Delaware Prosperity Partnership (DPP), the state’s economic development agency, 12 anticipate needing more lab space within the next three years, totaling about 150,000 square feet. Only half of those companies said that they could accommodate that growth currently though, meaning tens of thousands of square feet of lab space need to be developed.

It’s not just about meeting the needs of Delaware’s current companies, however, but also attracting new prospects. DPP officials reported that over the past two and a half years, it has worked with 30 companies that were seeking lab space. It currently has 12 such companies in the pipeline, the majority of which need “graduated” lab space, or facilities containing more advanced features, measuring between 10,000 and 30,000 square feet. If able to be located, they could create upward of 400 well-paying jobs.

The challenge now is to continue to grow the innovative ecosystem for research in Delaware while also investing in new lab development to support their scaled growth. Neighboring competitors Maryland and Pennsylvania, which are home to hundreds of bioscience companies and have decades of financial backing and resources at their disposal, are ready and willing to poach those companies if progress isn’t made.

Bill Provine, president and CEO of the Delaware Innovation Space, a nonprofit incubator and accelerator that is home to 18 companies at the DuPont Experimental Station, agreed that more labs were needed in the state and that government aid may be needed to spur it.

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Policies will allow outdoor dining options in Rehoboth

From Delaware State News

REHOBOTH BEACH — As the weather starts to cool, Rehoboth Beach restaurants will be able to use outdoor space with heaters for dining options.

The Rehoboth commissioners approved a policy regarding the use of outdoor space Tuesday.

Restaurants must have a straight and continuous minimum of 5 feet of sidewalk in front of any outdoor seating that must be maintained at all times. Space allows pedestrians to move up and down the sidewalks without adjusting their path because of the outdoor seating.

The approved policy also requires that outdoor tables be set 8 feet apart from each other. A barrier is needed between the tables and the pedestrian path if a restaurant is serving alcohol. Commissioners also approved tents and canopies without sides to be used in outdoor dining areas.

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University of Delaware employees to take 5% pay cut for remainder of fiscal year

From Delaware Online

University of Delaware’s non-union employees will all take a 5% pay cut for the remainder of the fiscal year, the latest in a string of efforts to shore up the school’s projected $250 million financial deficit brought on by the COVID-19 pandemic.

The pay cut will come in the form of nine furloughed days: three days before Thanksgiving, three before Christmas, and three at employees’ discretion.

The salary reduction will be evenly spread through paychecks, starting Nov. 1 until the end of June 2021.

Two weeks ago, the university announced that it was facing a budget deficit of about $250 million, as significant revenue loss and increased expenses from the pandemic strained finances.

At the time, employees were offered a voluntary retirement option. Since then, 138 employees have expressed interest in early retirement, and will receive final approval tomorrow.

Over the summer, senior administrators at the university took a 10% pay cut. Thursday’s cut will be in addition to that.

Some units may face a salary reduction greater than 5%, the university said in a message to faculty and staff on Thursday. Future workforce reductions, restructuring and other cost-saving measures could be announced down the line.

The pay cut does not apply to student employees, postdoctoral fellows or anyone on an H-1B visa. The university continues to negotiate with faculty and other unions.

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Medical facility takes shape: Commercial development booming along Del. 1 in Milford

From Delaware State News

MILFORD — There’s a lot of commercial development happening in Milford, and that growth may be clearest to those passing by the town’s Silicato Parkway exit off Del. 1.

That’s where Silicato Development is nearing completion on a medical building near Grotto Pizza and Royal Farms.

“It’s projected that the building will be completed at the end of 2020, so we will be starting a few of the tenant build-outs soon,” said Nicole Silicato Miller, the vice president of Silicato Development.

She hopes the facility will bring 50 to 60 new jobs to the area and said the building is already 25% leased out.

“I’m not releasing the tenant names yet, but we do have local family practitioners who are leasing in the building, and a boutique pharmacy … about to sign a lease, which is something I really wanted to do on the first floor,” Ms. Silicato Miller said.

A Dolce café will be located in the lobby, supplementing its main location in downtown Milford.

“I wanted to have a boutique pharmacy with the coffee shop so you can do that one-stop shopping in the building,” Ms. Silicato Miller said. “You can go to your family practice, you can go to pharmacy and you can grab a sandwich, and it’ll be a nice, pleasant experience.”

She thought a local coffee shop with a good reputation in the community would suit her vision best.

“I reached out to Stephenie and Dean Tatman,” Dolce’s owners, Ms. Silicato Miller said, “and they were extremely interested. They signed an intent to be in the building a year and a half ago, before the plans were even done.”

Ms. Tatman hopes the new location will attract beach traffic.

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Employer mandates: mandating job and income loss

Paid leave and similar employer mandate policies have risen in popularity over the past few years, and really came to the forefront during the coronavirus pandemic. On the surface, these measures will help workers (especially low and middle class) provide for and tend to their families. In reality, they will hurt businesses, cost jobs, and lead to lower wages.

An alternative option would be to allow the private sector to come together to either establish insurance plans that would cover short-term disability or paid family leave plans or allowing lower-income hourly workers to choose if they would want to convert overtime pay to paid leave. If we want to help workers, we should do so in a way that actually helps them.

Especially now, as businesses are struggling to recover from the economic crisis that accompanied the COVID-19 pandemic, employers cannot afford this burden. Losing your job is worse for a worker than losing a paycheck from not having paid sick leave or a paid family leave mandate.

Unfortunately, these platforms leave out a very important part of these types of mandates: the costs that will be placed on employers will end up hurting the very people they are seeking to help. Economic analysis and economists—both liberal and conservative—agree that the main people who pay for employer mandates are employees.

The cost of the health care provided to the employee does not result in more productivity or value of that employee at their firm. By adding this cost, it is more likely that incomes will be lowered in order for the total value of the employee to remain the same, even with additional costly mandates. Sometimes, the cost of these mandates results in layoffs so that the company can afford to provide them to the remaining employees.

So why do politicians who claim to advocate for workers support ideas that will hurt them? Well, it’s easy to support something that sounds good and has hidden consequences and costs.

For low income workers, employer mandates like health insurance mean far higher costs for the employer and a higher likelihood of layoffs. Since people cannot be paid less than minimum wage, the higher costs are forced onto employers who will have to adjust for these costs by laying off workers or cutting hours.

In a 2019 New Hampshire bill to implement a government-administered paid family leave program, a new tax was included to help cover the costs of the mandate. However, the tax that would cost the average worker an extra $267 per year only covered one fifth of the cost of the mandate. In this instance, employees would lose earning from both the tax and whatever cost-cutting measures their employer would be forced to take.

The costs aren’t just monetary.

If an employer has two applicants for a job and one appears more likely to take advantage of a mandate like parental leave (young, female), it might reduce the employer’s willingness to hire that person. Hiring a young woman then becomes a cost burden that an employer may not be willing to take on. In turn, this mandate intended to provide a benefit ends up leading to discriminatory hiring practices and higher unemployment in a new group.

When making decisions that impact businesses, lets allow businesses to contribute ideas for better solutions that benefit employers and employees alike. The government is not the answer to every question.