Pathways to Success: Careers in Delaware’s Construction Industry

By: Guest Contributor, Edward Capodanno, President, Associated Builders and Contractors, Delaware

Associated Builders and Contractors, Delaware Chapter is an organization that represents the Construction Industry – a lifeblood of Delaware’s economy and one that for years has driven economic growth in the state and nationally. The industry provides a direct pathway to personal prosperity and the ability to earn a high-quality living without the burden of excessive college debt.

This is a message our association and our members try to communicate daily.  We feel that, when effectively communicated, it inspires individuals and their families to be even more focused on their opportunities for future success.

Nationally, the average age of a construction worker is 47 and for every five people leaving our industry, just one is entering.  At this rate, and over the next three years, the shortage of new workers could stall Delaware’s economic engine that is now restarting.

As an improving economy, supported a renewed focus on thoughtful economic development creates new opportunities in Delaware, the need for well-trained, certified, skilled workers become more important.

The opportunities that are available to new workers entering the industry is immense.  The following careers and numbers shown below are average annual salaries and do not include overtime, company incentives or benefits:

Boilermakers – $58,856

Carpenter – $54,157

Electrician – $57,741

Heavy Equipment Operator – $61,091

HVAC Technician- $42,026

Plumber – $51,830

Mason – $54,860

Pipefitter – $59,558

All of these opportunities and more are available to Delawareans who are willing to make a career commitment to the industry. This is truly a pathway to a good life and the opportunity to begin a career without the burden of debt.

A quick look at industry statistics, updated quarterly, shows that in Delaware alone there are over 10,000 positions awaiting workers representing more than 20 skilled trades. While antiquated regulations and land use restrictions are factors in the shortage of affordable housing in Delaware, this lack of capable and skilled trades workers has more of an impact than other causes. And, as the crisis grows, affordable housing is an issue that is getting more attention by policymakers.

ABC Delaware stands committed to developing the construction workforce of tomorrow.  In fact, we, along with a broader group of interested leaders, are meeting regularly with Delaware educational leadership to help shape a new direction, redefine curriculum, and build a digital campaign designed to help Delaware students and their parents better understand the multitude of opportunities provided by the construction industry.

Edward J. Capodanno has served as President of Associated Builders and Contractors, Delaware Chapter and the Construction Education Foundation of Delaware since 1993. Ed also serves on a number of governmental task forces, including the Delaware Workforce Investment Board, and Governor’s Workers’ Compensation Oversight Panel. He previously served on the Governor’s Procurement Council, the Governor’s Prevailing Wage task force, the Department of Education School Construction Committee, Delaware Blue Collar Jobs task force and the New Castle County Vocational School District mentoring program. He has received numerous community and civic awards and recognition for his service.

Unlocking Delaware’s Potential: The Case for Tax Reform

By: Jane Brady, Chair, A Better Delaware

The Governor recently signed a number of bills passed by the Delaware General Assembly to help, in their view, with increasing the rate of home ownership in our state. Included in the package were an incentive program to create and expand workforce housing, elimination of the expiration of the mortgage mediation and foreclosure prevention programs and excuse from certain, limited purchases from a particular state transfer tax for contractors.  General home buyers and sellers are still required to pay the most expensive realty transfer tax in the nation, however, 4%. That means that for every hundred dollars you pay for a home, $4 is taken for the transfer tax. While it is often split between seller and buyer, as negotiated, that translates to a tax of $12,000 for a house costing $300,000.  We would have been well served if the General Assembly had reduced that tax. It stifles the economy. It discourages people who would like to relocate or seniors who would like to downsize, from doing so, as they are required to pay twice – once to sell, and then again to buy.

But transfer taxes are not the only way government reaching into the till is affecting Delaware.

We have written here on many occasions that our General Assembly should repeal our gross receipts tax. Perhaps some explanation of why we are so adamant would be helpful. Gross receipts taxes are an archaic idea that started, according to reports, in the 13^th century.  Delaware remains one of only seven states to retain a state gross receipts tax.  Most states have abandoned them for good reason. These taxes are on the money businesses receive from sales, before accounting for any of their costs for staff, materials, rent and other business expenses. They take money away that might be spent on expanding a business or adding a new product or service. For businesses with narrow profit margins, such as the mom-and-pop stores, or the new entrepreneur, it can eliminate most or in some instances, all of the profit, even jeopardizing the owners’ own compensation.  And, of course, these taxes add to the costs of products and services to you, the customer.  Delaware should repeal the gross receipts tax.

Delaware has seen an outmigration of talent over many years now. Bringing new business and keeping businesses that provide high paying, technical and manufacturing jobs should be a priority. It has not been. Whether in the bioscience area, the manufacture of alternative energy source components or chip and computer manufacturing and development, we should expand options in Delaware. We need to keep our citizens with skilled and bright young minds here in Delaware and attract new and competitive skilled workers to our state.  Corporate income taxes impact our ability to do so.  Research continuously shows that taxes are a factor in a state’s ability to attract and keep business.  Our corporate tax rate is one of the highest in the country (we are ranked No. 7 by the Tax Foundation).  Studies demonstrate that high taxes reduce investment in new and improved technology, impact efficiency, and result in lower wages, or fewer increases in wages, for employees. Freedom from a high tax burden allows businesses the freedom to grow, innovate and thrive.  We should reduce our corporate tax rate.

The American Legislative Exchange Council ranks Delaware 30^th of the states in economic outlook. Our tax rates are a component of that rating. Lack of innovation and imagination of what Delaware could be, what opportunities we could offer, what exciting challenges we could give to the talent and skill we have right now in our schools and universities, is holding us back.  Let’s unleash that talent and turn potential into production.

Jane Brady serves as Chair of A Better Delaware. She previously served as Attorney General of Delaware and as a Judge of the Delaware Superior Court.

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Why Does the State Energy Plan Sound So Familiar?

By: Dr. David R. Legates, Advisory Board Member, A Better Delaware

Recently, the State’s new five-year energy plan has been made available for a second round of feedback. A new energy plan is due this year; after all, it has been five years since the last one was implemented.

Five-year plans will sound familiar to those of you that remember the old Soviet “five-year plans for the development of the national economy of the Union of Soviet Socialist Republics.”  Other communist nations such as the People’s Republic of China also adopted five-year plans.

The proposed five-year plan for the development of the state economy of Delaware focuses heavily on a transition to so-called renewable energy.  This requirement was legislated by HB99 through its goal of achieving zero greenhouse gas emissions by 2050.  The five-year plan also establishes an offshore wind procurement program to facilitate this net-zero transition.  This plan will extend through 2029, just in time to see the state achieve its preliminary goal of reducing its greenhouse gas emissions by one-half by 2030.

While the plan calls for a myriad of things to address climate change, none of them are new concepts.  For example, the plan pushes for getting the public to adopt electric vehicles and to restrict the purchase of vehicles that run on fossil fuels.  Transportation is the largest sector that uses energy (more than one-third) and thus converting transportation to batteries is essential to meeting the 2030 goal set by HB99.

Moreover, this transition will necessarily reduce funds to the state arising from motor fuel taxes.  Consequently, the state’s five-year plan calls for the development of a revised fee structure to extract taxes from owners of zero-emission vehicles.  After all, state revenue cannot be sacrificed at the altar of green energy.

Other objectives established by the five-year plan include the transition to biodiesel and other sources of energy that will limit our food supply and make it even more expensive to feed our families.  Taxpayer funds also will be earmarked to facilitate the transition to so-called renewable energy sources.  After all, this transition will not come cheaply.

The plan also puts environmental justice and energy equity front and center.  Note that wind and solar are neither ‘clean’ nor ‘green’ as the mining and production of the components required to manufacture the wind turbines, solar panels, and batteries necessary to facilitate this transition is associated with child exploitation, slavery, land destruction, and the creation of toxic lakes.  Consequently, the transition to wind and solar energy necessarily harms people and children in developing and under-developed countries.  If one is truly concerned about environmental justice, why does the plan favor energy sources that harm poor countries through the creation of hazardous waste, the extraction of the requisite rare-earth minerals, and degradation of land uses from which they, and especially their children, clearly do not benefit?

Of course, the plan will achieve energy equity by making energy so expensive, few will be able to afford it.  The legislature set this process in motion and the administration, through DNREC, are all too willing to implement it.  This plan must be derailed if Delaware is to remain a great place to live.

Dr. David R. Legates is an Emeritus Professor at the University of Delaware and is the Director of Research and Education at the Cornwall Alliance for the Stewardship of Creation.  He also is an Advisory Board Member of A Better Delaware.

The True Price of Delaware’s Tax Policies: Impact on Residents and Businesses

By: Jane Brady, Chair, A Better Delaware

 This is the next in a series of articles that will take a look at how the policy principles and legislative priorities of A Better Delaware fared in the last legislative session, which ended on June 30.  We have written over several years now about our perspective on healthcare, education, energy, the economy and workforce in Delaware, as well as the need for more accountability and better transparency in the way government works in Delaware. 

In this series, we will look at how the action the legislature took promotes or inhibits achievement of those policy objectives we feel are important to make Delaware a better place for families, workers, businesses and the community at large.

Fiscal and Tax Policy

Many Delawareans are feeling the pinch in their pocketbook. “Luxuries”, like dining out, are falling by the wayside as people struggle to find the money to buy necessities.  Many of you might blame inflation, and that is certainly a significant reason, but in Delaware, it is also our taxes, and the burden our state’s tax policy puts on individuals and businesses.

The American Legislative and Exchange Council (ALRC) conducted a review to evaluate the tax burden on individuals and businesses in all 50 states. Delaware ranked #1, of course, when it came to sales taxes, because we don’t have one. And we did fairly well with regard to the property tax burden (we will have to wait to see how we fare after assessment, which is now occurring pursuant to court order).  Our top personal income tax and corporate income tax rates were ranked at 47, so, high as compared to other states.  But the real kicker? We ranked 50^th, yes, last (worst) for “remaining tax burden”. What is “remaining tax burden”?  Mostly state and Local taxes.  That could mean the tax you pay to transfer title to your car, boat or mobile home, property transfer taxes, gross receipts taxes, and the many other hidden taxes you pay to do business with the state or local government.

Many states have acted to relieve their citizens of tax burdens. Since the pandemic, more than 30 states have enacted reductions in their individual income tax rates, six of them just this year. Others have reduced their franchise taxes or capped property taxes.  We have argued that Delaware needs to reduce or eliminate property transfer taxes, gross receipts taxes and personal and corporate income taxes – taxes that take real money from hardworking moms, pops and students in our state. Sadly, Delaware’s General Assembly and Governor have failed to act, and despite our reputation as a tax-free state, we are anything but.  These reforms remain among our priorities.

Why should the high corporate tax rates or the gross receipts tax matter to you, an individual taxpayer in Delaware? Well, the gross receipts tax makes everything cost more – nearly everything you buy. It is a tax on the total the owner of the business takes in, and then, when they make money after expenses, the amount they take home from their business is taxed again. So, it is, literally, a sales tax by another name.

As for the corporate tax rates, the market is much more competitive today than it used to be, to attract businesses to incorporate and do business in a state.  Tax rates are a significant consideration in making that decision.  Delaware receives more than $1 billion each year from businesses that choose to incorporate here, reflecting filing fees, formation fees and franchise taxes.  The loss of that income would present a difficult challenge to those managing our state budget.  We are ranked just three states from the bottom on this metric. The legislature and Governor should act to reduce these taxes.

But taxes aren’t the only factor that can discourage companies from locating in Delaware.  The legal climate can be a factor as well. In this regard, the legislature enacted two bills that will affect corporate decision making.

The first established a government appointed panel that will oversee the finances and decision making of private and non-profit businesses.  The immediate focus was on hospitals and the intent was to reduce the amount the state pays for healthcare for its employees and retirees.  Based on comments from legislators, that is only the first category of businesses and non-profits to be targeted. We have previously opined that this step could further reduce the desirability of incorporating in Delaware and jeopardize our revenue stream.  An update on that legislation: although the hospitals negotiated some changes and stood back as the bill passed, Christiana Care has now filed to have the bill invalidated.  We will keep our readers informed as that case progresses.

The second is a bill that changes the extent to which restrictions may be placed on the decision-making of a corporate board of directors by a shareholder without a vote of the other shareholders. The bill was in response to a decision of the Court of Chancery upholding a challenge by a minority shareholder to specific veto and approval authority a shareholder/founder wanted to retain and reverses the Court’s ruling.  While the impact remains to be seen, that is precisely the issue. Our legal climate, always held to be the best in providing certainty for business ventures, is now being challenged by an activist General Assembly. That, coupled with the response by at least one high profile business (think Elon Musk) to relocate from Delaware, also in response to a court decision, could lead to hesitancy by other businesses to incorporate here. Again, we will monitor the legal landscape and bring updates as appropriate to our readers.

You may be aware that the Unemployment Insurance Fund recently reported that significant funds were embezzled and that the systems used in processing claims were so corrupted that a proper audit of the agency’s handling of funds could not be completed.  This session, the legislature did two things to help begin improvements at that agency.  First, they approved a change in the “benefits wage ratio methodology” that will ease determinations of benefits.  Second, they authorized a recurring and ongoing review of criminal arrests by staff with both the state and federal law enforcement databases. Previously a criminal background check was done only at hiring.  Such a system would have alerted the agency that the staff member allegedly involved in the embezzlement was arrested for theft outside of work while employed there.  Remarkably, the legislation does not apply to all state agencies.  It should.  A previous situation involving Delaware State University’s police department revealed that several members had adverse law enforcement contact while employed there. While that situation was resolved internally and by policy, every state agency should ensure all staff are in compliance with criminal laws.

In sum, the actions by the General Assembly have an impact on our economy. They should consider the big picture, enact laws that ensure continued dominance in the corporate world, create economic incentives for businesses to locate here and implement tax structures for them to thrive here. They should relieve our citizens of their tax burden.  And they should always remember whose money it is that they are spending – yours and mine!

Jane Brady serves as Chair of A Better Delaware. She previously served as Attorney General of Delaware and as a Judge of the Delaware Superior Court.