Is Delaware Losing Its Business Edge?

By: Kathleen Rutherford, Guest Contributor

For decades, Delaware has built its reputation as one of America’s most business-friendly states, thanks to its respected Court of Chancery, predictable corporate laws, and business climate that has attracted more than two-thirds of Fortune 500 companies. Corporate franchise taxes and related fees generate roughly one-third of the state’s operating revenue, helping fund essential services. However, maintaining that competitive edge requires constant attention. As states aggressively compete for jobs and investment, CNBC’s 2026 America’s Top States for Business rankings placed Delaware 32nd overall, behind Pennsylvania (13th), New York (18th), Connecticut (23rd), and New Jersey (31st), raising important questions about whether Delaware is losing ground.

That ranking should be a wake-up call.

Taxes Matter

Delaware imposes an 8.7% corporate income tax, one of the highest state corporate income tax rates in the nation. In addition, Delaware is one of the few states that also levies a gross receipts tax on business revenue rather than profits, meaning companies can owe taxes even when they are operating at a loss. Combined with franchise taxes and other business fees, Delaware’s overall tax structure can make it a more expensive place to do business than many competing states that are actively courting employers with lower taxes and fewer costs.

Affordable Housing Is an Economic Issue

Housing affordability isn’t just about helping families—it directly impacts Delaware’s economy. Delaware has the highest real estate transfer tax in the nation, increasing the cost of buying and selling homes, while renters face some of the highest housing costs in the country, with Delaware ranking 16th nationally for average rent. When teachers, nurses, police officers, tradespeople, and young professionals cannot afford to live near where they work, employers struggle to recruit and retain workers. Businesses face higher turnover, longer hiring times, and increased labor costs. The National League of Cities calls housing affordability an “invisible tax” on workforce development because it makes it harder for employers to build and maintain a reliable workforce. If Delaware wants businesses to grow and attract new investment, it must also ensure that the people who power those businesses can afford to live here.

Workforce Readiness Matters

Businesses also need confidence that today’s students will become tomorrow’s workforce.

According to Delaware Department of Education data, only 41% of students in grades 3 through 8 met English Language Arts proficiency standards during the most recent assessment cycle. Math proficiency rates remain below pre-pandemic levels as well.

No state can attract long-term investment without developing a skilled workforce. Companies considering expansion don’t just ask about tax rates, they ask whether qualified workers will be available five and ten years from now.

Delaware’s Greatest Strength Is Being Tested

Perhaps Delaware’s greatest competitive advantage has always been its corporate legal system. For decades, companies incorporated here because Delaware offered predictability, stability, and legal certainty.

That advantage is now being tested. A growing number of major companies have moved—or announced plans to move—their incorporations to states like Texas and Nevada, citing changes in Delaware corporate law, increased shareholder litigation, and a more favorable business climate elsewhere. Even Exxon Mobil considered Delaware before unanimously choosing Texas.

This matters because Delaware collects approximately $2.2 billion annually from corporate franchise taxes and related revenues. If more companies continue leaving or choosing other states to incorporate, the financial consequences won’t just affect corporations—they could affect every Delaware taxpayer.

The Bottom Line

Delaware still has tremendous strengths, including its world-renowned Court of Chancery, strategic East Coast location, and long history as the nation’s corporate capital. But history alone won’t keep us competitive. To regain our state’s position as a top business destination, Delaware must improve tax competitiveness, address housing and workforce challenges, and preserve the stability of its corporate legal system. A stronger business climate means more jobs, greater opportunity, and the revenue needed to support essential public services.

Kathleen Rutherford is a government relations and advocacy professional with experience in lobbying, public policy, and strategic communications in Delaware and Washington, D.C. Rutherford Consulting, Inc. provides policy analysis, advocacy strategy, and communications support that connects legislative decisions to real-world economic and community impacts.

BEYOND THE BUDGET: DELAWARE EDUCATION NEEDS RESULTS, ACCOUNTABILITY, AND MORE CHOICES

By: Kathleen Rutherford, Guest Contributor

Each year, Delaware makes significant investments in educating our children. The state budget grows, new programs are announced, and policymakers reaffirm their commitment to improving schools.

Those investments matter.

Teachers need support. Schools need resources. Students need opportunities.

But families deserve an answer to a basic question:

Are those investments producing the results Delaware students need?

The data suggests there is still significant work to do. In 2025, only 41% of Delaware students in grades 3-8 were proficient in English language arts, and just 34% were proficient in math. Among high school juniors, 47% met proficiency in SAT reading, while only 18% were proficient in math. Even with modest year-over-year gains, fewer than half of Delaware students are meeting grade-level expectations in reading, and barely one-third are proficient in mathematics.

Literacy Must Be the Starting Point

One of the most encouraging developments in Delaware education policy is the renewed focus on early literacy.

The Delaware Department of Education’s Early Literacy Plan focuses on evidence-based reading instruction, stronger teacher preparation, coaching, and measurable goals for improving student outcomes. The state has set a goal of increasing third grade reading proficiency while ensuring that educators receive training aligned with the Science of Reading. (State of Delaware News⁠)

Delaware has also committed more than $8 million toward strengthening literacy instruction statewide, including investments supporting districts and charter schools as they implement evidence-based reading practices in classrooms. Delaware accelerates statewide early literacy strategy with more than $8M to strengthen classroom reading instruction⁠

These are positive steps.

But funding alone will not solve the literacy challenge.

Delaware must continue focusing on measurable outcomes: identifying struggling readers early, providing effective interventions quickly, supporting teachers with proven instructional methods, and tracking whether those efforts are actually improving student performance.

The state has also moved toward stronger literacy accountability by requiring better reporting on students identified with potential reading deficiencies and the interventions being provided. Early identification matters because students who struggle with reading cannot afford to wait years for help.

Delaware Can Learn From Other States

Delaware is not the only state that has faced persistent academic challenges. Other states have taken different approaches that provide lessons worth considering.

Mississippi is one example. After years of struggling academically, Mississippi gained national attention for improving early literacy through a combination of evidence-based reading instruction, teacher training, early screening, and intervention strategies. Recent reporting shows that the state continues working to extend literacy gains beyond elementary grades by expanding support for older students. Mississippi focuses on boosting middle school students’ reading scores⁠ (Mississippi Today⁠)

The lesson for Delaware is not that one state’s system should simply be copied. It is that improvement requires focus. Students need to be identified when they struggle, teachers need the right tools, and schools need reliable ways to measure progress.

Tennessee provides another example of targeted literacy efforts. The state has continued evaluating literacy programs and strengthening early reading strategies through partnerships focused on improving instruction and measuring which approaches are most effective. Tennessee literacy evaluation partnership⁠

Florida provides another policy lesson through its expansion of educational options for families. Florida has continued to broaden scholarship programs and other education choices designed to give parents greater flexibility in selecting the learning environment that best meets their child’s needs. Florida education choice expansion coverage⁠

Delaware should not simply copy another state’s policies. But we should be willing to learn from approaches that have produced results elsewhere.

Accountability and Transparency Matter

Parents deserve clear information about how schools are performing.

Taxpayers deserve to know whether education dollars are being used effectively.

Teachers deserve a system that identifies successful strategies and provides support where improvement is needed.

Transparency is not about criticizing schools. It is about building trust and ensuring that families and communities have the information necessary to make informed decisions.

Delaware has continued efforts to improve access to education budget information, school performance data, and accountability reporting. Those efforts should continue.

Parents should not have to search through complicated reports or wait years to understand whether their child’s school is meeting expectations.

Families Need Meaningful Educational Options

Accountability and transparency are essential, but Delaware must also recognize another important part of the education conversation: opportunity.

Delaware’s School Choice program already allows families to apply for placement in public schools outside their assigned attendance area, including traditional public schools, charter schools, and vocational-technical programs.

That flexibility has helped many families.

But for students attending schools that have struggled year after year, we must ask whether families have enough meaningful options.

Parents should not have to wait indefinitely while their child falls further behind.

The discussion about educational choice should not be framed as public schools versus alternatives. Many Delaware public schools are doing excellent work because of dedicated teachers, strong leadership, and engaged communities. Those schools should be supported and celebrated.

At the same time, every child deserves access to a school where they can succeed.

That means continuing to strengthen traditional public schools while also considering whether charter schools, career and technical education programs, tutoring opportunities, and other educational options can provide better opportunities for students who are not thriving in their current placement.

The standard should be simple:

Does the policy improve educational opportunities and outcomes for children?

If the answer is yes, Delaware should be willing to consider it.

Moving From Investment to Impact

Delaware does not lack commitment to education.

What we need is a stronger commitment to results.

That means:

• Setting clear academic goals.
• Expanding evidence-based literacy instruction.
• Identifying struggling students earlier.
• Providing targeted tutoring and intervention.
• Giving parents meaningful information and options.
• Learning from successful approaches in other states.

Our educators work hard. Our families care deeply. Our students are capable of achieving far more.

More funding can be part of the answer—but it cannot be the only answer.

Delaware’s children deserve an education system that measures success not by what we promise, but by what students are able to achieve.

Kathleen Rutherford is a government relations and advocacy professional with experience in lobbying, public policy, and strategic communications in Delaware and Washington, D.C. Rutherford Consulting, Inc. provides policy analysis, advocacy strategy, and communications support that connects legislative decisions to real-world economic and community impacts.

Delaware Gives up its Electric Grid Authority*

By John Nichols, Guest Contributor**

Every Delawarean who flips a light switch depends on interconnection rules — the procedures that govern how solar panels, batteries and other devices connect to the electric grid. Get those rules right, and the grid stays safe, and costs stay reasonable. Get them wrong, and Delaware families and businesses can pay the price, sometimes for years.

On May 21, Gov. Matt Meyer signed House Bill 269 into law. The bill was presented as a modernization of Delaware’s interconnection rules. Its actual effect reaches much further: It makes the Interstate Renewable Energy Council — a private advocacy organization headquartered in Washington, D.C. — the default standard setter for Delaware’s interconnection rules, in place of the Delaware Public Service Commission, a state agency accountable to Delawareans.

This new law amends Title 26 of the Delaware Code to require that every Delaware electric supplier adopt the Interstate Renewable Energy Council’s Model Interconnection Procedures within 12 months of each new edition published by the council. The council updates those procedures on its own schedule, for its own purposes, with no obligation to weigh Delaware’s specific grid conditions, reliability requirements or ratepayer costs. Under this law, electric suppliers in Delaware must align with each newly published edition within 12 months.

Prior to being signed into law, the bill was amended and passed by voice vote, with no individual legislator on record. The original bill required that interconnection rules be “aligned with” the council’s procedures — language that, while mandatory, left some room for regulatory adaptation. The amendment replaced that flexibility with an absolute mandate: “Any deviation from the Procedures must be affirmatively approved by the utility’s regulatory body in a formal proceeding.” The law substantially shifts the default standard-setting role from the Delaware Public Service Commission to the Interstate Renewable Energy Council.

No other state has chosen to cede its authority

To our knowledge, no other state has enacted a law requiring its electric suppliers to automatically adopt future editions of a private organization’s model interconnection procedures as the binding legal standards. Across the nation, states have modernized their interconnection rules by directing their own commissions to conduct proceedings — open to the public, subject to evidentiary standards, with interveners representing ratepayer interests — to evaluate the council’s model procedures and incorporate what makes sense for their specific circumstances. New Mexico and New Jersey recently did exactly that. They used the council’s model as a reference. They did not hand the council a pen and ask it to write their laws.

Delaware appears to be the first.

House Bill 269 applies not only to Delmarva Power, which the commission regulates, but to all of the Delaware Municipal Electric Corp.’s nine member utilities, governed by their individual municipal councils, and to the Delaware Electric Cooperative, whose members voted under authority granted by the General Assembly to remove themselves from commission oversight entirely — authority established in Title 26. If those providers conclude that the council’s latest procedures are wrong for their customers and seek approval to deviate, the law provides no clear forum in which to do so. Who, exactly, has the authority to approve such a deviation for the Delaware Electric Cooperative?

An advocacy organization, not a regulatory body

The Interstate Renewable Energy Council describes its own mission as building “the foundation for rapid adoption of clean energy.” Its accreditation covers certifying the quality of solar installation training programs and instructors. That accreditation has nothing to do with writing interconnection standards for public utilities. The council’s own model interconnection procedures describe themselves as a “complimentary resource” intended to “guide and inform state utility regulators” — not to govern them. Delaware law now elevates those procedures from guidance into a regulatory framework utility must follow. The procedures themselves are not engineering standards. They govern policy and process, including application review timelines, approval tracks for different system sizes and dispute resolution steps. The actual engineering standard governing how equipment must behave on the grid is IEEE Standard 1547-2018, which was developed through an accredited consensus process involving engineers, utilities, manufacturers and regulators. The council’s procedures reference that standard, then add policy requirements on top of it. Delaware law now makes those policy choices mandatory.

Who controls Delaware’s electric grid?

Supporters argue that the measure will accelerate renewable energy deployment and reduce interconnection delays. The question, however, is whether Delaware should permanently delegate evolving grid policy standards to a private advocacy organization, rather than retain direct state oversight.

By enacting this law, the General Assembly has handed ongoing standard-setting authority over Delaware’s electric grid to a private organization with no connection to Delaware government, no obligation to weigh Delaware ratepayers’ interests and no accountability to the people of Delaware. Whether that is something the state of Delaware may lawfully do is a question the General Assembly did not answer.

The question the General Assembly did not answer is now Delaware law.

John Nichols is a Fellow at the Center for Energy & Environmental Policy at the Caesar Rodney Institute.

* Originally published Monday, June 29, 2026, in the Daily State News.

**Reprinted with the author’s permission.