Money Is Not the Answer

 By: Jane Brady, Chair, A Better Delaware

There was a big meeting, actually a rally, this week, regarding funding Delaware’s schools. It was only one of many meetings lately about how we fund schools, where the dollars should go, what formulas to use to allocate the funds.

The ideas flow faster than the dollars – but most suggest that if we just spend more money, we will get better results.  Sadly, that approach has been advocated for about three decades now, and with little to show. Add money to the budgets of schools where students’ needs are most severe. Change from an allocation based on students assigned to a school to one based on need.  Pay teachers more money. Pay paraprofessionals more money. Add specialized trainers to the mix. Our spending on education now tops one third of our state budget, and our students perform worse than those in more than 40 of the states in the entire country.

But what are the numbers? What has been the result of all this increased spending? This year’s results are in. 42% of Delaware students between third and eighth grade are proficient in English. 35% of those same students are proficient in Math.  Math proficiency of high school students in Math was a dismal 18% for the third straight year.  A distinction without a difference. Moving the chairs on the Titanic. Ineffective. Unacceptable.

Remarkably, but in all fairness, these numbers do represent some modest improvements.  Very modest. Barely improvement. But why are the scores so low to begin with? Because our focus is not toward accountability and results.

It is no secret that Mississippi found the key to improving student performance – teach children to read by third grade. Wallowing last or nearly so for decades, when the state changed its perspective and priorities, their students rose to surpass Delaware students by a mile in performance. All they did was make it mandatory that students learn to read at third grade level before progressing to fourth grade.  Suddenly, every student in third grade had a plan, an objective, that everyone was aware of and worked to achieve -the teachers, the parents and the students themselves shared a common goal – learn to read before third grade year was over. And most of them achieved it. Because there were clear expectations, clear objectives and…no one wanted that student to fail.

Delaware leaders are aware of this – the current and former Governor, members of the General Assembly, the leaders in the teachers’ union. Yet, there has been no response to the call to implement the concept that Mississippi and other states have proven works.

In Delaware, we “teach students to read.” We always have in our schools. We just haven’t done a very job of it. To know that there is something we can do, and not do it, is unforgivable.  The lives of those students in Mississippi and other states who learned to read are changed forever. New possibilities for success – in business, nursing, technology and even teaching – are in their futures. But for students who cannot read, the future is dismal. Every person, parent, teacher, leader in Delaware should feel an obligation to make a difference in the lives of the youth in our state. When it is known what can make that difference happen, our obligation is to implement the changes that make happy, profitable and rewarding futures possible for Delaware students.

As I said to a school board one evening, “When was the last time your child brought home a 50% and you were happy?” Of course, none of them could relate to a student, their student, bringing home 50% on an assignment, But, if your school district is hovering at 42% proficiency in reading, more than 50% of the students are performing at less than 50% proficiency.

The recent numbers also reflected a significant difference by race and ethnicity in proficiency.  Sadly, African American and Hispanic students scored relatively equivalent to each other, but far lower than White and Asian students.  Similarly, low-income students performed lower than those from higher economic brackets. But, after Mississippi’s experience, there can be no more excuses from the establishment that would justify the failure to educate lower income, minority students well.  Mississippi is, unarguably, the poorest and brownest state in the country and their kids are beating the pants off ours. It is time for accountability. It is time to put the students first. And it is time to use our funds to create the real opportunity for success for Delaware’s students – teach them to read!

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.

What Economic Freedom Means for Delaware Families

By: Kathleen Rutherford, Guest Contributor

Economic freedom can sound like a subject for economists. For Delawareans, it connects to familiar concerns: how much of a paycheck is left after taxes, whether a business can afford to hire, and how quickly new homes can be built. These conditions help determine whether Delaware is an affordable place to live and an attractive place to do business.

The Cato Institute’s Freedom in the 50 States report, which measures economic freedom, estimates Delaware’s overall tax burden at about 12.7% of adjusted personal income—above the national average—and ranks the state 44th overall for economic freedom.

Taxes help pay for public services. They also affect how much money remains for groceries, housing, savings and business growth. Competitiveness involves both sides of that equation: what government collects and what residents receive in return.

The cost of waiting

Consider a business ready to expand or a builder planning new housing. Before work begins, approvals can take months. In announcing its February 2026 permitting reforms, Delaware’s administration acknowledged that state reviews had often taken 18–24 months or longer, raising costs and discouraging investment. For residents, those delays can mean waiting longer for housing and needed infrastructure.

The state’s Permitting Accelerator aims to coordinate reviews and provide clearer timelines while keeping safety and environmental protections. Its practical value will depend on whether projects move forward more predictably. Faster decisions can help businesses plan hiring and investment with greater confidence.

Rules also affect who can work here. On August 20, Governor Meyer ordered a review of at least five licensing boards to identify unnecessary employment barriers. Recommendations are due within 150 days. The order itself does not change requirements in state law. Removing duplicative requirements could help qualified professionals enter Delaware’s workforce and give residents more service options.

What the results show

Education and healthcare matter to competitiveness because families and employers depend on both and because they represent nearly two-thirds of Delaware’s operating budget. In FY2027, public education accounts for 36% of state operating spending, while the Department of Health and Social Services accounts for nearly 28%. With roughly 64% of the state’s operating budget committed to these priorities, the results matter.

Delaware’s 2026 results show 42% proficiency in English and 35% in math for grades 3–8, each up one percentage point. Eleventh-grade SAT math proficiency remained at 18% for the third consecutive year. The gains are real, but the gaps matter for students preparing for work or college.

In its May 2026 report, Delaware found that health-care spending grew 8.7% statewide in 2024, nearly three times the state’s 3% benchmark and 5.7 percentage points above it. The report also identified five significant quality measures: Delaware exceeded only two—commercial breast-cancer screening and Medicaid colorectal-cancer screening—while missing targets for adult obesity, statin-therapy adherence and commercial cervical-cancer screening. That means just two of five specifically highlighted quality benchmarks were achieved, even as spending across all payers—not just state appropriations—rose sharply.

Delaware had the third-longest ER visit times among states—fourth including Washington, D.C.—in CMS data for the year ending September 2025. The measure covers total visits, including treatment. Primary care shortages create another access problem. These pressures strengthen the case for repealing Delaware’s certificate-of-need laws, known locally as Certificate of Public Review requirements. They require state approval for covered facilities and expansions, adding a hurdle for new healthcare investment. Repeal would remove that approval barrier and could enable more care options.

Delaware can move forward by focusing every public dollar on measurable results and removing barriers that stand between people and opportunity. That means helping students build stronger skills, expanding access to timely and affordable care, and making it easier for businesses to invest and hire—so Delawareans can learn, work, earn and afford to live here. When those opportunities grow, Delaware becomes more competitive and families feel the difference.

Kathleen Rutherford is a government relations and advocacy professional with experience in lobbying, public policy and strategic communications in Delaware and Washington, D.C.

Is Delaware Working for Small Business?

By: Kathleen Rutherford, Guest Contributor

Small businesses are not a small part of Delaware’s economy. They are its backbone.

Nearly 29,000 small businesses operate in Delaware, employing more than 250,000 people—more than half of the state’s workforce, according to the Delaware Division of Small Business.

That makes the findings in the Delaware State Chamber of Commerce’s 2026 Competitiveness Bluebookparticularly important.

The Bluebook compares Delaware with other states across more than 60 measures of economic competitiveness. Delaware has important strengths, including its highly regarded judiciary, investment in research and development, and growing innovation economy. But several measures directly affecting small businesses should get policymakers’ attention.

The Cost of Doing Business Matters

Delaware ranks 43rd in the nation for business friendliness and 41st for the cost of doing business, according to the CNBC rankings highlighted in the Bluebook.

For a large corporation, additional costs or regulatory delays may be manageable. For a small business operating on tight margins, they can determine whether an owner hires another employee, expands, invests in new equipment—or decides not to grow at all.

That is why Delaware needs to continue asking a straightforward question: Are we making it easier or harder to start, operate and grow a business here?

Time Is a Cost, Too

Taxes aren’t the only expense businesses face. Time and uncertainty have a price.

Delaware’s permitting process is one clear example. In February, Governor Matt Meyer acknowledged that some state permitting processes can take 18 to 24 months or longer, increasing costs and putting Delaware at a competitive disadvantage.

The Governor’s creation of a Permitting Accelerator is an important recognition of the problem. Now Delaware needs measurable results.

How much have approval times declined? How many projects are moving faster? Are businesses experiencing greater predictability?

Streamlining government does not mean eliminating necessary safeguards. It means establishing clear requirements, coordinating agencies and reaching decisions within reasonable and predictable timelines.

Delaware Also Needs Workers

Small businesses cannot grow without people to fill the jobs they create.

Here, the Bluebook identifies another warning sign. Delaware’s labor-force participation rate declined from 62.27% in 2019 to 59.08% in August 2025—the lowest among neighboring Virginia, Maryland, New Jersey and Pennsylvania. The report also notes that Delaware is now the nation’s fourth-oldest state.

Workforce policy, therefore, cannot be separated from economic policy. Housing affordability, education and skills training, energy costs and quality of life all influence whether working-age people choose to build their careers and families here.

And when Delaware struggles to attract workers, small businesses feel it first.

Give Small Businesses Room to Grow

Delaware has considerable advantages. More than 2.28 million legal entities are incorporated or formed here, and more than two-thirds of Fortune 500 companies call Delaware their corporate home.

But being the legal home of American business should go hand-in-hand with being a great place to actually operate a business.

That means lowering unnecessary barriers, speeding up permitting, keeping the cost of doing business competitive and creating an environment where entrepreneurs have the confidence to invest and grow.

Delaware can do better.

The goal should not simply be improving a ranking. It should be creating a state where the person opening a restaurant, expanding a construction company, running a neighborhood retailer or launching the next Delaware startup has every opportunity to succeed.

Kathleen Rutherford is a government relations and advocacy professional with experience in lobbying, public policy and strategic communications in Delaware and Washington, D.C.

Delaware’s Housing Problem: Affordability Starts With Removing Barriers

By: Kathleen Rutherford, Guest Contributor

Housing affordability has become one of Delaware’s most pressing challenges. For renters and homeowners alike, the numbers tell the story: 50.3% of Delaware renter households and 22% of homeowner households were cost-burdened in 2024⁠, meaning they spent at least 30% of their household income on housing costs.

The question for policymakers should be straightforward: What is making housing so expensive — and what can government do to lower those costs rather than add to them?

The answer begins with supply.

Delaware Needs More Housing

When housing supply fails to keep pace with demand, affordability becomes increasingly difficult. But building new housing can be a lengthy and expensive process.

Delaware itself has acknowledged the problem. State permitting and regulatory reviews have often stretched 18 to 24 months or longer, increasing project costs, discouraging private investment and constraining housing supply⁠.

The state has begun addressing the problem through its Permitting Accelerator, designed to coordinate agency reviews and establish clearer timelines and accountability.

That is a promising direction. Delaware should continue looking for ways to make approvals faster, simpler and more predictable while maintaining appropriate health, safety and environmental protections.

Regulation Has a Price

Permitting delays are only part of the equation. Regulations imposed at every level of government can add significantly to the cost of producing housing.

A 2026 National Association of Home Builders study estimates that federal, state and local regulations add $131,734 to the price of an average new single-family home — 26.4% of its sales price⁠. That estimated regulatory cost has increased more than 40% since 2021.

A recent federal policy change offers another example. The U.S. Department of Housing and Urban Development revised guidance governing Fair Housing Act design-and-construction claims after reporting that the previous interpretation had resulted in more than $110 million in repair costs for building owners over the previous five years⁠.

The lesson for Delaware isn’t partisan. It’s economic.

Regulations can serve important purposes, but they also have costs. Policymakers should continually ask whether a regulation is achieving its intended purpose, whether that goal can be accomplished more efficiently, and how the rule ultimately affects the price and availability of housing.

Rent Control Doesn’t Build More Homes

When rents rise, limiting rent increases can sound like an immediate solution. But controlling prices does not itself create additional housing.

Takoma Park, Maryland, provides a useful case study. The city reports that 57% of its rental units are rent stabilized, while only 3% of its total housing stock was built after 2000⁠. A separate fiscal analysis prepared for the city reported no new multifamily housing developments in Takoma Park since the 1960s⁠.

That does not mean rent stabilization alone caused the lack of construction. Housing development is influenced by many factors. But it does demonstrate why Delaware should carefully examine how policies affect the incentive to build and invest before adopting them.

Long-term affordability requires increasing housing supply, not simply regulating its price.

Homeowners Need Predictability Too

Delaware’s affordability challenge isn’t limited to renters. More than one in five Delaware homeowner households are already considered housing cost-burdened⁠.

As Delaware continues navigating the effects of statewide property reassessment, transparency and predictability matter. Families making one of the largest financial commitments of their lives should have a reasonable ability to understand what owning that home will cost them in the years ahead.

A Better Path for Delaware

There is no single solution to Delaware’s housing affordability problem. But there is a clear direction: build more housing, streamline permitting, examine unnecessary regulatory costs, avoid policies that discourage new investment, and provide greater predictability for homeowners.

Every proposed housing policy should face a simple test:

Will this make it easier and less expensive to build, own or rent a home in Delaware — or will it make housing even more difficult to provide?

If Delaware wants housing to become more affordable, creating the conditions to build more of it is a good place to start.

 Housing policy should expand opportunity, encourage investment and make Delaware a more affordable place to call home.

Kathleen Rutherford is a government relations and advocacy professional with experience in lobbying, public policy and strategic communications in Delaware and Washington, D.C.

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.

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.