December’s jobs report showed a slowdown in growth. The economy gained 223,000 nonfarm payroll jobs, down from 256,000 the previous month. In December, there were notable gains in sectors including leisure and hospitality, health care, construction and social assistance.
Now, the U.S. unemployment rate sits at 3.5%. We have come a long way from the nearly historic high of 14.7% in April 2020, due to a combination of vaccinations and states removing restrictions. However, inflation and the potential of a recession threaten to push the unemployment rate higher again if Federal Reserve rate increases are not able to stave them off.
In order to take stock of how unemployment rates are changing throughout the U.S., WalletHub compared the 50 states and the District of Columbia based on six key metrics that compare unemployment rate statistics from the latest month for which data is available (December 2022) to key dates in 2022, 2021, 2020 and 2019.
Change in Unemployment (2022 December vs 2022 November)
Biggest Decrease
1. Maryland
2. Colorado
3. Montana
4. New Mexico
5. Florida
Smallest Decrease
47. New Hampshire
48. Nevada
49. Louisiana
50. Vermont
51. Minnesota
Change in Unemployment (2022 December vs 2021 December)
Biggest Decrease
1. New Mexico
2. New Jersey
3. Missouri
4. California
5. Massachusetts
Smallest Decrease
47. Oregon
48. Nebraska
49. Arkansas
50. Indiana
51. Oklahoma
Change in Unemployment (2022 December vs 2020 December)
Biggest Decrease
1. Hawaii
2. Florida
3. Massachusetts
4. California
5. North Dakota
Smallest Decrease
47. Idaho
48. Delaware
49. Kentucky
50. Maine
51. Nebraska
Change in Unemployment (2022 December vs 2019 December)
Biggest Decrease
1. Minnesota
2. Louisiana
3. Mississippi
4. New Mexico
5. Montana
Smallest Decrease
47. Illinois
48. Colorado
49. Nevada
50. Oregon
51. Hawaii
Unemployment Rate (December 2022)
Lowest Rate
1. Utah
T-2. North Dakota
T-2. South Dakota
T-4. Florida
T-4. Minnesota
Highest Rate
47. Delaware
48. Oregon
T-49. District of Columbia
T-49. Illinois
51. Nevada
In order to examine changes in unemployment rates throughout the U.S., WalletHub compared the 50 states and the District of Columbia across two categories. In the first category, we compared the change in unemployment for the latest month for which we had data (December 2022) to November 2022, December 2021, December 2020 and December 2019, in order to show the impact since the beginning of the pandemic and the recent changes in the job market amid high inflation. We also compared not seasonally adjusted continued claims in December 2022 to November 2022. In the second category, we looked at the state’s overall unemployment rate. We then used the average of those categories to rank-order the states.
– Illinois’ minimum wage increased to $13 at the beginning of the year and businesses are feeling it.
In 2019, after no increases in the minimum wage since 2010, the legislature agreed to a gradual increase that will top off at $15 an hour in 2025.
The passage fulfilled a campaign pledge from Gov. J.B. Pritzker. In step with the ramp-up, the Illinois minimum wage will increase to $14 an hour on Jan. 1, 2024, and on Jan. 1, 2025, the minimum wage will reach $15.
Todd Maisch, president and CEO of the Illinois Chamber of Commerce said the increase is “particularly painful” for retailers, restaurants and employers in the service industry.
“Employers are trying to decide whether they will trim hours or trim jobs. In some instances, if they think they can get away with it, they will have to raise prices,” Maisch told The Center Square.
Maisch said that for businesses that are struggling with inflation, paying a higher minimum wage is more pain for the bottom line.
“Governments cannot create demand; they cannot create revenue,” he said. “So that means that small businesses must decide how to cut costs. Way too few members of the legislature understand that basic fact.”
Lawmakers act as if all businesses have a secret vault of cash that they can tap to pay higher wages, Maisch said.
“We all know that that is not the case,” he said.
Keeping wages artificially high makes it harder for inflation to go down, Maisch said, and raising prices is not an option for many businesses.
“Coming off of very aggressive inflation, that is the last thing that small businesses want to do,” he said. “Over time, inflation impacts consumer behavior more and more. Consumers are spending less and less at restaurants and other places.”
Maisch thinks most employers will opt to trim jobs and cut hiring rather than raise prices.
The service industry, including retail, is on the frontline when it comes to the minimum wage hike, Maisch said. He expects businesses to opt for more automation in response.
“Whether it will be self-serve sodas or having customers tap screens to put in their own food orders, more businesses will decide that they have to go that route,” Maisch said.
Raising the minimum wage will have a ripple effect, he said.
“For a manufacturer, the fact that somebody can come in and on the first day on the shop floor make $13 an hour, that means that everybody that’s been there for six months or a year or two is going to pressure the employer for higher wages,” Maisch said.
High-performing employees will get the wage increase, Maisch said, but employers will become even more hesitant to bring on new employees that they would have to train.
State Rep. Bryan Shupe (R-Milford) is promoting a proposed change to House rules that would scale back House leadership’s ability to leave bills in limbo.
According to data from the 150th General Assembly – covering the 2020 and 2021 legislative sessions – bills sponsored by Democrats were roughly twice as likely to receive a hearing when assigned to the House Administration Committee compared to bills sponsored by Republicans.
The same disparities do not appear in other powerful committees, including the House education committee.
Shupe attributes the disparity in the House administration committee to the powers of the chair, the House Majority Leader – a position currently held by State Rep. Valerie Longhurst. The chair is responsible for setting the committee’s agenda, and while House rules dictate all bills receive a committee hearing within 12 days of their introduction, that isn’t easily enforced. The House Speaker exercises similar control over the floor agenda.
Shupe says he plans to introduce a proposal giving a committee hearing automatically to any bill that hasn’t been heard within 12 days of its introduction. He also proposes amending House rules to put any bill on the House floor if it is released from committee and not added to the agenda within 12 days.
He says the rule changes would limit the control of House leadership enough to give every bill an equal opportunity for consideration.
“If a bipartisan committee – Democrats and Republicans – have voted for a bill to be heard on the House floor, then it deserves a spot on the House floor,” he said. “That should not be up to one person – the Speaker of the House – regardless of who it is.”
Though Shupe has detailed his proposal to constituents, he hasn’t yet introduced it for a vote.
From: Caesar Rodney Institute In 1925, Delaware’s government anointed a state song, “Our Delaware,” by an act of the General Assembly. According to Wikipedia, “Our Delaware” is derived from a 1904 poem by George Beswick Hynson, comprising three verses, each honoring one of Delaware’s three counties.
After listening to Delaware’s state song, it seems to be very dated and lethargic-just like Delaware. You don’t have to take my word for it; CLICK HERE and listen for yourself!
Perhaps it is time for a refresh by adding a “state anthem” to go along with the “state song” and choosing a tune that better reflects Delaware today.
Below are my seven recommendations for consideration for a “state anthem” from a few existing songs created by four Delaware-related artists! I hope you will give them a listen.
Delaware-born artist George Thorogood’s “Delaware Slide“captures precisely what has been happening in Delaware – it is sliding down. Delaware’s economy has been suffering 1970’s era stagflation over the last 18 months. Furthermore, Delaware’s smaller businesses have been strangled by government regulations and seriously harmed by Delaware’s painful Gross Receipts Tax. It is the “Delaware Slide” in real time.
George Thorogood’s “House Rent Blues” presents a realistic description of life faced by many Delawareans. Delaware has a serious affordable housing crisis along with lower employment today than before COVID-19 (See Chart nearby). As an added benefit, the last half of the song describes the protagonist’s efforts at self-medication through drinking. Sadly, Delaware’s problem is not so much alcohol as it is drug overdoses. See below graph: 463,600 Non-farm jobs as of October 2022 versus 469,500 as of March 2020, according to the Delaware Dept of Labor.
Bob Marley’s “Three Little Birds.” Bob Marley’s mother was a long time Delaware resident, although I’m not sure he spent much time here. His music maintains universal and global appeal – something Delaware clearly lacks. In “Three Little Birds,” each bird could be a substitute for one of our three Counties; however, the song is probably rightly considered Jamaican property. Rats!
Bob Marley’s “Exodus“ might be a great secondary option because, between 2010 and 2020, Delaware’s 18 to 24 year old population declined by 9.0%. Quite an exodus!
Cab Calloway’s “Minnie the Moocher.” The great Cab Calloway spent the last years of his life in Delaware. This hit song reflects the growth in government transfer payments in Delaware, which have grown by almost 400% from 2002 to 2020 – 20% faster than the national average. In addition, as shown in the graph below, Delaware’s workforce participation is lower today than at any other time since the federal government began tracking the statistic (with one COVID-19 related exception). Too many Delawareans are forced to mooch off the State rather than participate in the workforce and economy.
Cab Calloway’s “The Hi-De-Ho Man (That’s Me).“ This song is one of the greatest call-and-response songs ever performed. Given that New Castle County’s (NCC) economy is smaller todaythan it was 20 years ago. Maybe the NCC government could respond to the call of success of Sussex County’s economic growth. Comparison of County, State, and National economic growth in constant dollars for Delaware (Source: Bureau of Economic Analysis).
David Bromberg’s “Sharon.” Any potential list of artists would be incomplete without David Bromberg, who performs/tours often and has a luthier shop in Wilmington. The song “Sharon” can be interpreted as an allegory about the seduction of power. The audience members depicted in the song could be seen as Delaware’s elected officials losing themselves in their backroom deals. Delaware needs transparency in public education and needs an update to the antiquated 1970s FOIA process.
Conclusion
No list would be complete without these four artists and the seven specific songs. I hope these selections will generate some thoughts and laughs. However, I am sure I have missed some other obvious choices, and I hope that CRI readers might come up with their own examples and share them on social media.
Delaware’s future “state anthem” should reflect Delaware as it is today while connecting to artists who have a connection to the State.
Three bills that would raise real estate tax credits are on the docket for the Delaware House of Representatives Education Committee.
With the state now projected to have a surplus of nearly $1 billion – the third year in a row for such extraordinary income – a Democrat and a Republic representative are moving to give older residents a bigger tax break.
The committee will meet Wednesday at 3 p.m., its first convening of the 152nd Delaware General Assembly. Livestream it here.
In Delaware, residents who are 65 and older are eligible to receive this tax credit on the amount they pay in school taxes.
The state reimburses local school districts for any loss of income resulting from the credit.
Up until 2017, this tax credit was $500 annually. To fill a significant budget hole that year, the tax credit was reduced by $100, according to Stephanie Becker, communications officer for the Delaware House of Representatives.
Three bills related to the credits have been filed by Rep. Bill Bush, D-Dover, and Rep. Kevin Hensley, R-Odessa.
Sponsored by Hensley, this bill would increase the Senior Real Property Tax credit to $750 from $400.
Becker said Hensley and many of his colleagues believed the 2017 cut would be only a temporary fix.
“Once revenue projections rebounded and the state’s financial situation improved, one of the first things we would make good on was restoring the tax credit to its original amount,” she said.
Because of their life-long contributions, no group of citizens has collectively paid more taxes than Delaware’s seniors, Hensley said in a statement.
A member of the legislature’s Joint Finance Committee, which writes the state budget, Hensley pointed out that Delaware appears to once again be in a position of getting a hefty surplus.
He is among the Republicans who believe that the state’s windfall should mean a break for those who pay taxes instead of all being plowed into state projects.
“With that in mind, we should make the effort to permanently provide modest tax relief to our older population, many of whom are now living on fixed incomes,” he said. “When it comes to my senior tax credit bill, I believe most Delawareans would agree that it is among the most well-intentioned funding expenses our state can make.”
Sponsored by Bush, this bill would increase the Senior Real Property Tax credit from $400 to $500 for seniors who have resided in Delaware for 10 years.
“Rep. Hensely’s bill goes a bit further in raising the credit from $400 to $750,” Becker said. “Both bills will be debated this legislative session and a determination will be made on how much – if any – of a tax credit should be given to Delaware senior citizens.”
For seniors who have held residency in Delaware for more than three years but less than 10 years, the maximum credit authorized, via local school board vote, will be either a 50% of the tax collected or $400, whichever is a lesser amount.
Residents who are 65 and older and have lived in the First State for at least a decade will receive a 50% credit, or $500, again the lesser amount.
Introduced by Bush, this bill would remove the three-year residency requirement to qualify for the Disabled Veteran Tax credit.
The exemption would mean that the First State’s disabled veterans receive a full tax credit of their non-vocational school district property tax.
The bill defines disabled veterans as someone who receives 100% disability compensation from the United States Department of Veterans Affairs or its successor agency due to a service-connected, permanent and total disability based on unemployability, or a 100% disability rating.
Under the new bill, those who have permanent residence in Delaware would automatically qualify, rather than needing three years of residence.
Those who have seasonal or temporary residence, or who are out of the state for a period of at least a year would not qualify for the tax credit.
A bill filed Friday would raise weekly Delaware unemployment payments from $400 to $450 and, for one year only, save state companies $50 million in 2023 by using state funds to pay unemployment tax increases.
House Bill 49 filed by Rep. Ed Osienski, D-Newark, said Delaware already is paying less in unemployment than neighboring states and that the maximum amount of the payments has not been changed since 2019.
Rep. Mike Ramone, R-Pike Creek, said he hadn’t seen the bill, but he found it interesting that the idea is being floated now.
“At this time, many businesses are significantly understaffed,” said the House Minority leader. “Why would we motivate people more to stay out of a work force? There are plenty of jobs.”
The Delaware State Chamber of Commerce is opposed to the bill and will testify against it at Tuesday’s hearing, said Tyler Micik, director of Public Policy and Government Relations for the chamber.
The bill said it would make sure that employer payments don’t change by using funds from the Unemployment Trust Fund.
That fund was depleted by the surge of pandemic related unemployment claims, but Gov. John Carney used federal pandemic funds to replace them, the bill summary said.
There is enough money in the trust fund to offer unemployment tax relief measures to Delaware employers by reducing new employer tax rates, reducing or holding constant overall employer tax rates, and reducing the maximum earned rate during the calendar year 2023, the bill says.
The bill will also temporarily simplify the tax rate schedules that are used to calculate unemployment assessments paid by employers.
The state Department of Labor has estimated that the tax assessment changes will reduce the tax obligation of employers an estimated $50 million in 2023, the bill summary said.
If the bill passes and is signed into law by Carney, it will be in effect retroactively to Jan. 1, 2023, and expire Dec. 31. 2023, the bill says.
Medicaid enrollment in the United States is expected to top 100 million in the coming months, a new study shows.
The Foundation for Government Accountability says more than 98 million Americans are enrolled in the federal health care program. Delaware accounts for 307,756 of that figure, as of Oct. 31.
Medicaid, according to the release, provides health care coverage to low-income residents, including adults, children, pregnant women, elderly adults, and people with disabilities.
“For years, FGA has been warning about the rising number of people on government welfare programs,” Hayden Dublois, the organization’s Data and Analytics director, said in a release. “Now, we’re nearing a grim milestone – nearly one-third of the country will be on Medicaid.”
The group’s research shows that as welfare enrollment increases workforce participation decreases and is urging the federal government to take action.
“We’re in the midst of a nationwide workforce crisis, yet the Biden administration is pushing policies to entice people into government dependency at record levels while limiting opportunities to achieve the American Dream,” Dublois said in a release.
According to the release, the organization points to rising enrollment in the program primarily due to the federal government extending the public health emergency related to COVID-19.
The group said that while those emergency measures are in place states will receive additional funding for the program with the caveat that those enrolled remain in the program.
Under the emergency, the group said, 21 million Americans are enrolled in the program who would not have qualified under nonpandemic conditions due to earning too much income or are ineligible.
“The pandemic-era policy keeping more than 21 million ineligible enrollees on Medicaid is costing taxpayers more than $16 billion per month,” Dublois said in the release. “Despite the recently enacted legislation allowing states to redetermine eligibility beginning in April, the Biden administration is slow walking the process and hoping states will be sluggish to act.”
Meanwhile, the dashboard shows, Maryland has 1,749,423 residents enrolled in Medicaid as of Oct. 31; Pennsylvania has 3,625,047 enrolled as of Nov. 30; and New Jersey has 2,206,895 enrolled as of Nov. 30.
DOVER, Del.– The Honorable William L. Witham, Jr. has joined as an Advisory Board member at A Better Delaware, a non-partisan public policy and political advocacy organization that supports pro-growth, pro-jobs policies and greater transparency and accountability in state government.
Chris Kenny, Chairman and Founder of A Better Delaware welcomed Judge Witham to the Board saying, “As a former leader in the US Army Reserve and National Guard. with 34 years of service, “Judge Witham is an exemplary jurist who has served our state with distinction. “He brings a wealth of experience in administrative leadership which will provide ABD clarity in assessing efficiency in state executive departments.”
“As a life-long advocate and advisor in veterans’ affairs, I look forward to being instrumental in advising ABD how best to improve the quality of life for Delaware’s 70,000 active-duty military and veterans,” said Witham.
Witham will serve with Advisory Board member Sam Waltz, founding publisher of the Delaware Business Times and an award-winning respected business and civic leader active in strategic C-level business and change counsel. “Judge Bill Witham is an extraordinary addition to A Better Delaware. Not only is he a man of great personal principles and ethics, as one would expect of a Delaware judge, but he and I together share a passion for the importance of national character and committed, as embodied in service in the US military. Bill and I each are veterans who remain committed to the principles of Citizenship with Service,” said Waltz.
Recently retired, Witham has served over 40 years in Delaware’s justice system. He first joined the bench as an associate judge of the Delaware Superior Court in 1999. In 2005, he was appointed Kent County Resident Judge by Governor Ruth Ann Minner and re-appointed in 2017 by Governor John Carney.
Utilizing 34 years of service in the Delaware National Guard including Deputy Commander of the Delaware Army National Guard and his experience on the bench he instituted Delaware’s first Veterans Treatment Court in 2011. This court provides a therapeutic approach to criminal prosecution of veterans with mental illness who are charged with nonviolent felonies and misdemeanor crimes away from jail and into rehabilitative programs. He is also a frequent speaker on the issues of veterans involved in the criminal justice system on a state and national level.
“Judge Witham brings to A Better Delaware a wealth of knowledge in veteran’s affairs which will be an invaluable resource as we advocate for the elimination of income tax for active military retired during this legislative session.”- Kathleen Rutherford, Executive Director of A Better Delaware.
Over the past decade — during which University of Delaware officials have requested more than a billion dollars in taxpayer funds from the General Assembly to support in-state scholarships, construction projects, and even general operations — the state’s flagship university has quietly shifted hundreds of millions of dollars to investments overseas, according to a review of the university’s tax returns and other financial documents by Delaware Call.
With the university’s offshore investments growing from $14 million in 2010 to a peak of $413 million in 2016, according to UD’s tax records, the university is likely avoided paying millions of dollars in federal taxes using an accounting scheme The New York Times described as “tax wizardry” and which is often out of reach for all but the largest nonprofits. The majority of those investments were and continue to be located in one or more Central American and Caribbean nations.
Since 2016, UD’s offshore investments have slowly declined to $334 million in 2018 and $266 million by June 2020, the most current year for which the university’s tax information is available.
While UD invested hundreds of millions of dollars overseas, it also increased tuition every year between 2009 and 2019, according to reports in the Newark Post, sometimes by 7% or more, resulting in the price of annual in-state undergraduate tuition rising more than 50% — from approximately $9,000 to $14,000 — over the course of a decade.
In an attempt to discern the origins of the dollars that UD has invested overseas, Delaware Call filed a Freedom of Information Act request asking university officials for more details regarding the school’s overseas investments. UD denied the FOIA request, claiming that it is not obligated to share any documentation regarding its offshore investments because these investments do not include state-allocated funds.
“Pursuant to Delaware’s FOIA, only university documents that relate to the expenditure of public funds are public records subject to disclosure under the Act,” wrote UD Deputy General Counsel Jennifer Becnel-Guzzo, “Your request does not relate to the expenditure of public funds. The University, therefore, has no public records responsive to your request.”
When asked by Delaware Call if any federal funds in the form of Pell grants or student loans were diverted to offshore investments, UD initially declined to comment. After multiple follow-up emails, UD’s media relations manager, Peter Bothum, replied, “No state or federally funded resources are applied to offshore investments,” but provided no evidence that substantiated the claim.
When shown UD’s tax returns, outgoing state Rep. John Kowalko (Newark) said that he was unaware of the university’s offshore holdings but not surprised, calling it “outrageous behavior” for a public institution and slammed the university’s special exemption from open records requests that shield information about these investments from public scrutiny.
“You can’t call yourself a public institution on Thursday when you want taxpayer money and a private institution on Friday when we want to look at your books,” Kowalko said, adding that even state legislators don’t have special access to UD’s finances. “I don’t think for one minute that UD has been a proper steward of taxpayer money. I think they’ve been manipulative.”
How offshore investments help universities avoid tax liability
UD first reported offshore investments on Schedule F of its 2010 tax returns under former president Patrick T. Harker and chief investment officer Mark Stalnecker. Over the following decade, UD’s offshore investments skyrocketed in an apparent attempt to supercharge capital gains through investments that would otherwise carry a tax penalty if traded by a nonprofit inside the United States.
By 2013, UD’s offshore investments had swelled to $136 million while the university’s total investment income grew to nearly $100 million annually and tuition increased by 4%. The next year, UD’s offshore investments ballooned yet again to $398 million while investment income reported on UD’s federal tax form topped $220 million.
The investment returns were a windfall for the university, which was in the middle of a construction boom that included the purchase and demolition of a former Chrysler assembly plant and its transformation into an entirely new campus with manufacturing facilities, modern glass towers, and a $165 million biopharmaceutical center.
In 2016, UD explained that its asset allocations had shifted “dramatically” since 2000 to reduce “the endowment’s investments in domestic stocks and bonds by reallocating to international and nontraditional asset classes.” At the turn of the millennium, UD invested the majority of its assets in US stocks and bonds and virtually none in hedge funds and private equity. By 2016, domestic investments had fallen to 40% of the university’s asset allocations while hedge funds and private equity swelled to 19% and 21%, respectively, according to archived versions of the university’s website.“These funds have been redeployed into the international equity markets and alternative assets such as hedge funds and private equity funds which should not only provide higher returns in a greater variety of investment environments but also help to control overall risk,” reads the current version of UD’s asset allocation page.
Figure 1: UD Endowment Asset Allocations vs Target Allocations as of 6/30/22 (Source: University of Delaware)
Among the nation’s most prestigious colleges and universities, it is not unusual to keep hundreds of millions, or even billions of dollars invested outside the United States. Just last year, Swarthmore College and Villanova University reported $375 million and $249 million, respectively, in offshore investments, and University of Pennsylvania reported more than $5.3 billion, almost entirely in Central America and the Caribbean. It’s all perfectly legal.
Why have UD and so many other major universities diversified their investments to include significant offshore holdings?
The reason likely lies in a section of the tax code known as the Unrelated Business Income Tax, or UBIT, which is basically a special tax on nonprofit revenue derived from sources unrelated to any tax-exempt purpose. For example, if a nonprofit decided to start a business that generated a profit, then profit from that company would qualify as unrelated business income because it’s not a charitable activity, according to Zac Kester, CEO and managing attorney at Charitable Allies. Nonprofits do this all the time to bolster their impact on a community, like an organization that supports formerly incarcerated people re-entering society and wants to start a landscaping company to help its clients find work.
“The overall concept is that when a nonprofit organization has passive income — things like dividends, interest, rent — it’s not taxed,” says Kester. “But if revenue is not related to the exempt purpose of the organization, then that is taxable under the UBIT rules.”
Unrelated business income also includes many kinds of debt-financed and high-risk investments.
What does this mean? If a university were to profit from certain types of investments traded inside the United States — such as hedge funds, leveraged securities, or many types of private equity — then that university would be obligated to pay the 21% flat federal corporate income tax rate stipulated by UBIT. However, according to The New York Times, by establishing overseas companies known as “blocker corporations,” which often take the form of limited partnerships or limited liability corporations in offshore tax havens, universities can avoid paying federal taxes on leveraged and risky — but also potentially lucrative — investments.
In other words, rather than a university buying and selling investments and paying a flat tax, a company located outside the United States executes those trades in the supposed best interest of the university and pays out a dividend over time, which is untaxed when transferred back inside the country because the school did not, legally speaking, trade any securities, and dividends are treated as passive income, a tax-exempt form of revenue for nonprofits.
How risky are UD’s offshore investments? Because of UD’s exemption from FOIA, there’s almost no way to know for sure. Even state legislators do not have access to that information.
“I’ve made requests that have been declined,” Kowalko said. “We can’t verify anything they say, and I think UD has acted unethically in its refusals to allow a more open accounting of its finances.”
What little we do know can be found in UD’s annual financial audits. UD’s eye-popping returns came crashing down during the first three months of the coronavirus pandemic, with hedge funds being one of the worst-performing asset types, losing tens of millions of dollars in value between June 2019 and June 2020. The following year, UD appears to have almost entirely divested from certain types of hedge funds.
Where are these offshore investments located? That too is unclear. UD’s tax returns only report investment activity by region along with the corresponding amount of investments held in that region. However, according to the Offshore Leaks database managed by the International Consortium of Investigative Journalists, as of 2016 the University of Delaware was apparently connected to at least one apparent blocker corporation, Bermuda-based Dover Street Blocker LP, which itself was connected to Dover Street V Limited Partnership, which was connected to other higher ed institutions, including the University of Vermont and Texas Christian University, both of which report extensive offshore investments in “Central America and the Caribbean,” just like UD.
Another offshore corporation, University of Delaware Dover Inc., was incorporated in the British Virgin Islands in January 2007 by Portcullis TrustNet in the town of Tortola. Both Bermuda and the British Virgin Islands are among the world’s most popular and secretive tax havens, according to the Corporate Tax Haven Index developed by the Tax Justice Network.
During his time in the General Assembly, outgoing Rep. John Kowalko filed numerous bills designed to increase transparency at the University of Delaware. Back in 2014, he sponsored House Bill 331, the first of three consecutive bills to amend the Delaware Code relating to the Freedom of Information Act. That bill added language expanding the university’s FOIA obligations to competitive bids and passed unanimously in both the state House and Senate and signed into law by Gov. John Carney.
“When you’re putting an enormous amount of money into a public institution — and it is a public institution — as Delaware taxpayers are, then there is no right to a FOIA exemption,” Kowalko said in an interview with Delaware Call.
UD’s exemption from the state’s sunshine laws is unusual. Delaware and Pennsylvania are the only states that shield their public universities from most freedom of information requests. Delaware State University also enjoys a FOIA exemption, although Delaware Technical & Community College, which also receives state funds, is not exempt.
Kowalko’s two transparency bills, however, did not draw as much support. In 2015, Kowalko introduced House Bill 42, which removed the state’s FOIA exemption for UD and DSU; however, the bill languished in the House Administration Committee over concerns there should be exemptions for the intellectual property and proprietary information of faculty and students. Kowalko attempted to address those concerns in 2017 with House Bill 72, but that too died in committee.
Blaming the “Delaware Way,” Kowalko said, “Leadership never allowed my bills out of committee.”
Now, on his way out of office, Kowalko says repealing UD’s “rigged FOIA exemption,” as he put it, would be “good public policy,” and he hopes that his efforts to increase transparency and oversight at UD will be carried on by the rising generation of progressive lawmakers in the General Assembly.
Eleven states will reduce their individual income tax rates on Jan. 1.
Arizona, Idaho, Indiana, Iowa, Kentucky, Mississippi, Missouri, Nebraska, New Hampshire, New York, and North Carolina will cut the individual income tax rate on New Year’s Day, according to the Tax Foundation. Over the past two years, more than 20 states have cut individual income tax rates.
Three of these states – Arizona, Idaho, and Mississippi –will also move away from a graduated-rate income tax to a flat tax where all income is taxed at the same rate regardless of income level, the Tax Foundation reported.
Only one state, Massachusetts, is increasing its individual income tax, according to the Tax Foundation. The state will change from a flat to a graduated-rate tax of 9% on any household income over $1 million.
Two states, Hawaii and Illinois, expanded their tax credit programs, which reduce the final dollar amount on the tax bill rather than reducing taxable income, according to the Tax Foundation.
States with low or no personal income tax rates are among the fastest-growing populations in the country, according to data from the U.S. Census. Among those states are Florida, Idaho, and North Carolina.
Florida has no income tax, while both Idaho and North Carolina have a flat tax on income, according to data from the Tax Foundation.
Alabama, Delaware, Iowa, Rhode Island, and Nebraska enacted exemptions for a portion to all of retirement income or military pension, according to the Tax Foundation.
Hillsdale College Professor of Economics Gary Wolfram told The Center Square that states with lower income taxes often attract more businesses and economic activity to their economies.
“States with lower income taxes attract economic activity,” Wolfram said. “The latest census data on state population growth is evidence of the fact. This results in job opportunities and increases in property values that particularly benefit the median income earners.”
States like New York, Hawaii, California, and Oregon with high income taxes have shrinking populations, data from the U.S. Census shows. These states are also among the top ten states with the highest income tax with California having the highest tax rate in the country at 13.3%.
