A $2.5 Billion Question: Are Delaware Schools Delivering?

By: Kathleen Rutherford, Guest Contributor

Delaware will spend $2.518 billion in state taxpayer dollars on public education in FY2027 — 36% of the state’s entire $6.996 billion operating budget. Education is the largest category of state spending, and the state covers roughly 70% of school operating expenses. The state’s FY2027 Operating Budget⁠ puts the scale of that investment into perspective.

With an investment that significant, parents, taxpayers, teachers, and most importantly, students deserve to know: Are we getting results?

Right now, the numbers tell us we can do better.

Delaware’s latest state assessment results⁠ showed third grade reading proficiency increasing from 39% to 40% — just a one-point improvement. With Delaware’s goal set at 53% by 2028, the state remains 13 percentage points away.

That means six out of ten Delaware third graders are still not reading proficiently.

This isn’t simply another education statistic. Early literacy provides the foundation students need as coursework becomes increasingly complex.

The question Delaware should be asking is not simply, “How much more should we spend?”

It should be: “Are we investing in strategies that have demonstrated results?”

Look at What Is Working

Delaware doesn’t need to reinvent the wheel. Other states offer lessons worth examining — and Mississippi has become one of the most closely watched examples in the country.

Mississippi has pursued a comprehensive literacy strategy centered on evidence-based reading instruction, early identification of struggling readers, targeted intervention, teacher training and literacy coaching.

The results have attracted national attention and prompted other states to look at elements of Mississippi’s approach⁠ when developing their own literacy reforms.

Delaware’s own 2024 NAEP results⁠ underscore why examining successful approaches elsewhere matters. Only 26% of Delaware fourth graders scored at or above NAEP’s proficient level in reading.

The lesson isn’t that Delaware should automatically copy every policy adopted somewhere else.

It is much simpler: Find what works. Invest in it. Measure the results.

That is responsible investment.

Accountability Must Mean Something

Delaware education leaders are also putting increased emphasis on data and measurable results.

The state’s Delaware School Success Framework⁠ measures areas including academic achievement, academic progress and student growth, school quality and student success, graduation rates and multilingual learner progress.

Those reports should be more than numbers posted on a government website.

They should be tools for accountability.

Where are students improving? Where are they falling behind? Which schools and programs are producing strong outcomes? Which investments are failing to deliver?

When taxpayers are investing $2.518 billion, they should be able to see the connection between education spending and student outcomes.

Give Families More Opportunity

Accountability should also include empowering parents.

Delaware has an opportunity to participate in the new federal scholarship tax credit program⁠. Beginning in 2027, individual taxpayers may receive a federal tax credit of up to $1,700 for qualifying cash contributions to scholarship-granting organizations that provide scholarships for elementary and secondary education expenses.

As CoastTV recently reported⁠, 30 states had elected to participate in the program for 2027 as of July 24. Delaware can expand educational opportunities for families without creating another state-funded education program.

Why shouldn’t Delaware families have that opportunity?

Education policy should not be about protecting one particular system. It should be about helping children access the education and resources they need to succeed.

More choices mean more opportunities for students — while encouraging every part of Delaware’s education system to demonstrate results.

Put Results at the Center

Delaware’s education debate too often becomes a choice between spending more money or spending less.

That misses the point.

The real question is whether Delaware is spending wisely.

A one-point increase in third grade reading proficiency is better than moving backward, but it is nowhere near enough. We can acknowledge progress without lowering expectations.

Delaware can study states that are getting better results. We can invest in evidence-based literacy strategies. We can expand opportunities for families. We can demand transparent reporting and hold programs accountable for outcomes.

And when the data show something isn’t working, we should have the courage to change it.

Delaware taxpayers are making a $2.518 billion investment in public education this year.

Our students deserve more than good intentions and bigger budgets.

They deserve an education system that invests in what works — and measures the results.

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’s Energy Crossroads: A Practical Path to Reliable Power

By: Kenneth J Reuter JR, Guest Contributor

Delaware faces a growing energy challenge: electricity demand is increasing while in-state generation remains inadequate. The result is greater dependence on imported electricity, pressure on residential and commercial electric bills, and increasing concern about long-term grid reliability.

The state needs an energy strategy centered on one fundamental objective: reliable, affordable, 24/7 electricity.

I offer this perspective based on more than 40 years of experience in the electric power generation, transmission and distribution industries. My background includes U.S. Navy training in electrical and nuclear technologies, a degree in Economics and Business from the University of Delaware, and an Executive MBA from Northeastern University. I have also served in senior executive roles with global energy equipment manufacturers supporting nuclear, fossil, offshore wind and solar generation.

I participated in Delaware’s Nuclear Energy Task Force (NETF), and that experience reinforced my concern that Delaware is moving too slowly to address a problem requiring immediate action.

Where the Nuclear Energy Task Force Fell Short

The NETF began its work in October 2025 but did not release its summary until August 4, 2026—after the General Assembly had adjourned. Its conclusion that small modular reactors (SMRs) could not contribute to Delaware’s electricity needs until the late 2030s effectively pushes meaningful nuclear action well into the future.

For an issue this technical and consequential, the task force should have been organized around specific areas of expertise: nuclear technology and manufacturers, potential sites, environmental and safety considerations, permitting, federal-state coordination and public communications.

That did not happen.

Most concerning, nuclear equipment manufacturers were not brought before the full task force to discuss available technologies, production capacity, project timelines and siting requirements. Westinghouse and another leading nuclear company were identified as willing to present, yet neither was invited. An opportunity to tour the nearby Salem/Hope Creek nuclear facilities was also not pursued.

Delaware cannot make informed decisions about nuclear power without directly engaging the companies designing and building nuclear plants and evaluating potential sites within the state.

Delaware Needs Reliable Generation

Delaware imports a substantial share of the electricity it consumes, while demand continues to grow. Sussex County, in particular, is experiencing rapid population and housing growth while conventional generation has declined following the retirement of generating units at Indian River.

Wind and solar can be components of Delaware’s energy portfolio, but they do not independently provide the dispatchable, around-the-clock generation needed to meet baseload demand.

At the same time, Delaware’s participation in the Regional Greenhouse Gas Initiative (RGGI) should be reassessed to determine whether current policies unnecessarily constrain the ability of existing natural-gas generators to increase production when Delaware needs it most.

Energy and environmental policies must be balanced against reliability, affordability and economic growth.

A Practical Path Forward

Delaware should pursue a two-track strategy: address the immediate generation shortage while simultaneously building the infrastructure needed for long-term energy security.

First, establish a cabinet-level energy office. Delaware needs dedicated leadership staffed by professionals with direct experience designing, building, operating and servicing power-generation systems. Energy policy is too important to remain fragmented across agencies.

Second, revisit RGGI. Delaware should evaluate whether modifications could allow existing generators to increase output while maintaining reasonable environmental protections.

Third, expand combined-cycle natural gas generation. Modern combined-cycle plants provide efficient, relatively low-emission, dispatchable electricity and can be deployed faster than nuclear facilities. Additional capacity could help bridge Delaware’s generation gap.

Fourth, begin nuclear planning now. Delaware should evaluate both SMRs and larger proven reactor technologies such as the AP1000. That means engaging manufacturers, identifying potential sites, addressing permitting requirements and coordinating with federal agencies today—not years from now.

Finally, Delaware should evaluate offshore wind, solar and every other generation source based on reliability, cost and its contribution to the overall grid—not political preference.

There is no single solution to Delaware’s energy problem. But there is a clear priority: Delaware must produce more reliable electricity.

The longer we wait to build dependable, dispatchable generation, the fewer options we will have—and the more Delaware families and businesses will ultimately pay.

Kenneth J. Reuter, Jr. is a veteran energy executive with 40 years of experience in electric generation, transmission and distribution and currently serves as an energy consultant through Resilience Energy, LLC.

Affordable Housing Is About More Than Homes—It’s About Delaware’s Future

By: Kathleen Rutherford, Guest Contributor

When people hear the phrase “affordable housing,” they often think about subsidized apartments or new developments. But Delaware’s housing challenges are about something much bigger. They are about whether working families can afford to stay in the communities they call home, whether young people can build a future here, and whether employers can find the workers they need.

Housing affordability is quickly becoming one of the defining economic issues facing our state.

For many Delaware families, the cost of homeownership has risen far beyond the price of a mortgage. Transfer taxes, insurance premiums, utility bills, and rising property taxes all add to the financial burden. These hidden costs make it increasingly difficult for first-time buyers to purchase a home and for longtime homeowners to remain in one. When government policies continue to add costs to housing, affordability suffers.

At the same time, Delaware is experiencing a severe shortage of housing that middle-income families can actually afford. Teachers, nurses, first responders, and skilled tradespeople, the people who keep our communities functioning—are increasingly priced out of the neighborhoods they serve.

That should concern everyone.

When essential workers cannot afford to live near their jobs, the consequences ripple throughout the economy. Longer commutes, increased traffic, staffing shortages, and reduced quality of life affect entire communities. Workforce housing is not simply a housing issue; it is an economic competitiveness issue.

Creating more attainable housing requires increasing supply. That means reducing unnecessary barriers that delay or discourage responsible residential development while maintaining reasonable health and safety standards. It also means encouraging a wider variety of housing options so young families, seniors, and working professionals have choices that fit both their needs and their budgets.

Unfortunately, recent state actions have also raised legitimate concerns about the balance between statewide mandates and local decision-making.

Land-use decisions have traditionally been made by local governments that best understand their communities’ infrastructure, schools, roads, and environmental needs. While expanding housing opportunities is an important goal, solutions are most effective when they respect local knowledge and allow communities to plan responsibly for future growth.

Affordable housing and local control are not competing priorities. Delaware can pursue both by encouraging responsible development while ensuring that local officials remain active partners in planning their communities’ future.

Property taxes represent another growing challenge.

Recent reassessments have left many homeowners facing significantly higher tax bills despite no change in their income. For retirees living on fixed incomes and families already struggling with inflation, these increases can make staying in their homes increasingly difficult.

Tax systems should be transparent, predictable, and fair. Homeownership should not become unaffordable simply because property values have risen dramatically. Policymakers should look for reforms that protect homeowners from being taxed out of their homes while ensuring local governments remain adequately funded.

Taken together, these issues point toward a broader truth: affordability cannot be addressed one policy at a time.

Delaware needs a comprehensive approach that recognizes the interconnected nature of housing costs. Expanding workforce housing, reducing unnecessary regulatory costs, respecting local planning, improving tax predictability, and encouraging responsible development are all pieces of the same puzzle.

The goal should not simply be building more housing. It should be making Delaware a place where working families can afford to put down roots, where young people can build careers without leaving the state, and where employers can attract the workforce, they need to grow.

Housing policy is ultimately about people—not buildings.

It is about whether a new teacher can afford to live near the school where she teaches. Whether a nurse finishing a twelve-hour shift has a reasonable commute home. Whether a retired couple can remain in the home they’ve owned for decades. And whether the next generation believes Delaware is still a place where the American dream of homeownership is within reach.

If we want a stronger economy and stronger communities, making housing more attainable must be part of the solution.

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’s Corporate Franchise Revenue No Longer Plugs The Gap

By: Charlie Copeland, Guest Contributor

Delaware doesn’t have a revenue problem—it has a spending problem. The state’s largest source of revenue, its corporate franchise, has stopped growing while government spending continues to climb. Rather than confronting that reality, lawmakers have turned to higher business taxes and fees to close the gap. Delaware’s own financial data tell the story and serve as a warning.

The State of Delaware’s role as the nation’s incorporation capital has been its biggest moneymaker. Taxes and fees paid by companies that register here make up about 30% of the state’s General Fund. That engine has now stalled. According to the revenue forecast issued by DEFAC, franchise tax collections are projected to remain flat through 2028. The only increase comes from HB 400, signed into law by Governor Meyer on May 21, 2026, which raised the annual tax on LLCs and partnerships. Remove that hike, and the underlying revenue isn’t just flat; after inflation, it is shrinking — even as state spending keeps climbing more than 5% a year.

What’s worrying is that Delaware isn’t losing companies — it’s gaining them. Delaware Division of Corporations statistics show a 25.4% increase in total business entities since 2021, while franchise tax revenues are about 6% lower. Per business entity, Delaware’s revenue is down to about $807, from a 2023 peak of $904. Delaware is signing up more customers while collecting less from each one.

 The DEFAC forecast shows corporate franchise tax revenue flattening.

The state’s own forecast tells the story. For decades, the corporate franchise tax has been the state’s dependable workhorse. It has stopped climbing. It slipped from just under $1.40 billion in 2023 to roughly $1.32 billion in 2024, and the state’s own forecasters at DEFAC expect it to remain nearly flat — near $1.34 billion — every year through 2028. A flat line can sound stable, but after inflation it is really a slow bleed: a real decline of close to 10%.

 The LP/LLC small-entity annual tax is the sole reason the combined franchise number shows any growth, and it points directly to HB 400.

The House Bill 400 tax increase saves the day, but only in the short term.

The FY26 jump isn’t a wave of new companies or a booming economy. It’s a price increase. HB 400 raised the annual tax on LLCs, LPs, and general partnerships from $300 to $400. That change aligns with the $137.6 million DEFAC added to its 2027 forecast.

Lawmakers were candid about why they raised the tax. As reported by WDEL News, Rep. Harris cited “a budget deficit,” and the Joint Finance Committee chair, Sen. Paradee, called the hike “a responsible way to raise the revenue we need to balance our budget.”

CRI sees it differently. Back in September 2024, we noted that nearly all of Delaware’s major revenue sources had already flatlined in chained dollars. The corporate franchise was the last to outpace inflation. We warned then that it, too, would stall. It has. What the state is really doing is leaning harder on its incorporation business to plug a spending gap — raising prices just as competition is heating up. Charging more for a product that other states are racing to copy isn’t a “responsible” long-term plan. It’s a short one.

The spending gap compounds as revenue stalls.

Even with the HB 400 rate hike, General Fund revenue still trails spending. DEFAC projects revenue to grow 4.1%, then 3.6%, then 2.0%, while Corporation Income Tax receipts fall by 24% through FY28. Only Personal Income Tax is forecast to grow 5% annually for the next three years, but against 5%+ appropriations growth the revenue/spending gap compounds. Strip out the additional revenue from HB 400, and the revenue/spending gap is even larger.

The solution: responding to growing competition.

Delaware’s real problem is spending, not revenue. Its biggest money-maker hasn’t collapsed — it has stopped growing. Trying to fix a spending problem by raising prices, gets the diagnosis backward. And the companies being asked to pay more can simply move to states where it is more attractive.

What does “attractive” look like? Texas has spent twenty years answering that question. It charges no personal income tax, keeps its business tax low, uses business-oriented regulatory and litigation environment, and lets a fast-growing private economy widen the tax base instead of taxing a fixed base more heavily. To meet its budget needs, Texas uses a 6.25% sales tax instead of an income tax. Delaware’s existing top income tax rate of 6.99% is comparable in level to the Texas sales tax.

The verdict is in the numbers: Texas was just named the best state for business and leads the nation in corporate relocations. And more worrisome for Delaware, Texas is now coming for the franchise itself — it has opened a Business Court to rival the Court of Chancery, launched a Texas Stock Exchange, and companies from Exxon to SpaceX to Dell have moved their legal home there. While Delaware raises prices, Texas is building the courthouse, the exchange, and the tax climate to welcome that same customer.

Delaware needs to attract customers, not send them to Texas.

 Charlie Copeland, MBA, is the Director of the Center for Economic & Fiscal Policy, at the Caesar Rodney Institute.