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A Better Delaware is a non-partisan public policy and political advocacy organization that supports pro-growth, pro-jobs policies and greater transparency and accountability in state government.
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Delaware Lawmakers Seek 169% Increase in Tip Wage

A proposed measure in Delaware would increase base wages for tipped workers (servers, bartenders, etc.) by 169.5% at the start, and as high as 573% if minimum wage reaches $15.

In reality, this is just another market manipulation tool and an example of state government micromanaging businesses.

Servers are averaging $25 an hour in areas like Sussex County, and are already guaranteed to earn at least the minimum wage. In fact, 69% of tipped workers said that they would favor keeping their tips over a “substantial increase” in their hourly wage.

This could push establishments to replace tipping with a mandatory service charge, actually putting less money in servers’ pockets at the end of the day, and resulting in less profit for restaurants that are not steadily popular.

When D.C. introduced similar legislation last year, over 100 local bar and restaurant owners spoke out against it, citing added labor costs, increased menu prices, and reduced employee hours as just a few of the associated consequences.

As if this wasn’t enough to deter such action, jobs are also at stake. A report from the University of Washington revealed a loss of over $100 per month for low waged workers and 5,000 fewer jobs from a similar bill.

Less pay, less profit, fewer jobs, and higher prices sound like more of an issue than the one Delaware lawmakers are trying to fix.

Why is this on the menu?

State’s jobless rate rises again

From the Delaware State News

DOVER — Delaware’s unemployment rate rose again in October, the fourth straight month it has increased.

Data released Friday by the Delaware Department of Labor estimates 3.7 percent of the state’s workforce was not employed last month, up .2 percent from September, Delaware’s unemployment level has surpassed the U.S. rate for the first time since December 2017.

The First State’s unemployment rate hit 3.2 percent in April, remaining there for three months before it began climbing again.
The national rate has fluctuated since then but now sits at 3.6 percent, an increase of .1 percent from the month before.

“Unpublished unemployment data from the Delaware Current Population Survey using 12-month averages show that the share of job losers has increased to 75 percent of the unemployed from just under 40 percent one year ago,” Tom Dougherty, the acting chief for the Office of Occupational and Labor Market Information in the Department of Labor, wrote in a commentary released with the numbers Friday.

“The share of job leavers and reentrants who voluntarily enter the pool of unemployed seeking better opportunities has fallen to under 20 percent from just over 50 percent one year ago. The increase in the number of job losers combined with a decrease in voluntary unemployment of job leavers and re-entrants seeking better opportunities could be a sign of labor market weakness in the months ahead.”

 

Read more:

https://delawarestatenews.net/news/states-jobless-rate-rises-again/

If Delaware stock exchange flops, NCCo would own a wrestler-founded tech company

From The News Journal 

If a floundering Wilmington stock exchange fails to repay a $3 million government loan next year, New Castle County residents would become partial owners of a cash-poor Chinese-American tech company founded a decade ago by a professional wrestler.

In what is the latest turn in the county’s most controversial attempt at economic development in recent memory, New Castle County Council voted Tuesday to swap out old collateral – a software license – on its loan to the Delaware Board of Trade for shares of the stock exchange’s new controlling owner, Ideanomics Inc.

It follows a chaotic year for DBOT, as it is known, in which its limited operations sputtered while churning through investors and clinging to hopes of becoming a trading platform for shares of small and foreign companies looking for American investors.

Led by an influential Chinese-American billionaire, Ideanomics bought out DBOT’s investors last spring with a share swap deal valued at $18 million.

Those included Delaware Rep. Mike Ramone, R-Pike Creek, and John Hynansky, who Joe Biden has called a friend.

While company spokesman Tony Sklar called DBOT a “distressed company,” he pointed to its technology partner, Shawn Sloves, as the culprit.

Sloves’ company, Fundamental Interactions, is suing DBOT, claiming it hasn’t been paid in months.

It started in 2015 with a promise of hundreds of new jobs for a stagnant downtown Wilmington. Convinced of the potential and with an eye on the next election, then-New Castle County Executive Thomas Gordon inked a deal with the startup for a 5-year, $3-million loan, using money from a public parks investment fund

While the company had no revenues at the time, Gordon’s hope rested on the resumes of its founders – a mixture of financial experience, tech smarts, and political gravitas. They included former-Philadelphia Stock Exchange CEO John Wallace, and longtime aide to Joe Biden, Dennis Toner.

 

Read more:

https://www.delawareonline.com/story/money/business/2019/11/14/if-delaware-stock-exchange-flops-ncco-would-own-wrestler-founded-tech-company/3896771002/

Want to know more about legislators’ financial reports? This News Journal database will tell you

From The News Journal

Every year in Delaware, state lawmakers have to disclose their personal financial interests to prove they are making decisions in the best interest of the public and not themselves.

Because those records aren’t easily available to the public, The News Journal has rounded them up and published the forms for all 62 members of the General Assembly. The disclosures, which were submitted in the spring, list officials’ investments, debts and sources of income in 2018.

The contents of those statements are available through our disclosure database. You can look up your representative and senator’s disclosures in the database by typing in either the lawmaker’s name or your address.

In the process of creating the database, The News Journal found that some lawmakers left off income sources, investments and board memberships in their initial statements, which are not independently audited or checked for accuracy once they are submitted.

“They (public officials) certify that it’s true when they submit it,” said Deborah Moreau, attorney for the state-funded Public Integrity Commission who collects the disclosures every year. “We take them at their word that whatever is on that form is true.”

After The News Journal alerted lawmakers that the contents of their disclosures would be published online, seven of them — Reps. Stephanie Bolden, D-Wilmington East; Melissa Minor-Brown, D-New Castle; David Bentz, D-Christiana; Paul Baumbach, D-Newark; Lyndon Yearick, R-Camden-Wyoming; Debra Heffernan, D-Bellefonte and House Majority Leader Valerie Longhurst, D-Bear — have amended and resubmitted their forms to the Public Integrity Commission.

 

Read more:

https://www.delawareonline.com/story/news/politics/2019/11/14/new-journal-database-tells-you-delaware-lawmakerss-finances/2517151001/

DOJ seeks $3 million increase in spending

From Delaware State News

DOVER — The Delaware Department of Justice is seeking about $3 million more, including 17 additional positions, for the upcoming fiscal year, Attorney General Kathy Jennings told budget officials Wednesday.

The Office of Management and Budget is currently in the midst of the annual fall budget hearings, where about 30 state agencies and organizations present their asks for the fiscal year beginning July 1.

Wednesday was only the third day of presentations, which are slated to continue for another two weeks.

After the hearings wrap up one week before Thanksgiving, Gov. John Carney will work with budget officials to craft his spending recommendations. Those will be presented in the second half of January, allowing the General Assembly five months to review those suggestions before voting on them in late June.

This year’s statewide operating budget totals $4.45 billion in general funds, which mostly consist of taxes and similar revenues.

The Department of Justice is receiving $38.6 million this year, up about $1.8 million from the prior year. A little more than $1.7 million of the requested $3 million increase would go to funding 17 positions: eight deputy attorneys general, six paralegals, one social worker, one criminal investigator and one administrative specialist.

Those added positions, Ms. Jennings said, would help the agency put more focus on prosecuting sex crimes, defending civil rights, protecting the elderly and the young alike, preventing data breaches, helping individuals with immigration issues and cracking down on instances of people trying to defraud the government.

 

Read more:

https://delawarestatenews.net/news/doj-seeks-3-million-increase-in-spending/

Prosperity Partnership, North East England counterpart sign cooperative agreement

From Delaware Business Now

The Delaware Prosperity Partnership and the North East Local Enterprise Partnership (LEP), a public, private and education sector partnership in North East England, UK, signed a cooperative agreement to support joint business development.

LEP works in partnership with the business community to grow the economy and create more and better jobs in the region. DPP is Delaware’s economic development agency.

Specifically, the two organizations will work together to support mutually beneficial international expansion for firms that work in:

  • Bioscience/Life Science and Wind Supply Chain
  • Advanced Engineering and FinTech
  • Innovation and Skills

North East England is one of nine official regions of England, which includes Northumberland, County Durham and Tyne and Wear. The North East LEP is responsible for promoting and developing economic growth in the local authority areas of County Durham, Gateshead, Newcastle, North Tyneside, Northumberland, South Tyneside and Sunderland.

Representing Delaware was Kurt Foreman, CEO of DPP and Rod Ward, CEO of CSC, a provider of business, legal, tax, and digital brand services. Ward is Co-Chair of the DPP Board of Directors.

Representing the UK was Andrew Hodgson, North East LEP Chair, and Helen Golightly, North East LEP Chief Executive.

Both economic development organizations will promote their partner area as a location for local firms looking for international business expansion opportunities. They will actively collaborate, support joint events, and encourage cross-education and training through the local universities, a release stated.

 

Read more:

https://delawarebusinessnow.com/2019/11/prosperity-partnership-north-east-england-counterpart-sign-cooperative-agreement/

Fairfield by Marriott coming to Middletown

From Delaware Business Now

LNW Hospitality and Axia Hotel Group have announced plans to build a Fairfield by Marriott Hotel in Middletown.

LNW announced on its website that the venture signed a franchise agreement with Marriott and is expected to break ground on a new Fairfield by Marriott in 2020, with an opening scheduled in 2021.

LNW Hospitality develops, owns, and manages hotel assets on the east coast, with three Marriott brands in its portfolio.

The company is best known for renovating and developing hotels on Jeykill Island on the coast of Georgia.

The blog post noted that parent company, Leon N. Weiner & Associates, Inc. has been in Delaware for more than 70 years. In Middletown itself, through its ownership of Middletown Trace Apartments and Fairfield Commons Apartments.

“We see tremendous opportunity in Middletown,” said Kevin Kelly, chairman of LNWA. “The town is thriving, Fairfield by Marriott is a great brand, and our partner, Axia, has a strong track record in town as well.”

Axia Hotel Group has been in the hotel business in Delaware since the 1960s and has developed eight hotels.

 

Read more:

https://delawarebusinessnow.com/2019/11/fairfield-by-marriott-coming-to-middletown/

Chief justice submits final budget request

From Delaware State News

DOVER — Chief Justice Leo Strine made his final scheduled appearance as the head of Delaware’s judiciary Monday. The chief justice, who plans to step down from the bench at the end of the month, presented his budget request to state officials, although he outlined it in writing earlier this month.

Budget hearings began early this year to allow Chief Justice Strine to stick to his planned departure date, with his post not set to be filled immediately.

These fall hearings represent the next step in the budget process, giving state departments a chance to present their spending requests for the fiscal year starting next July. From here, the governor works with the Office of Management and Budget to prepare his budget recommendations, which are officially unveiled and presented to lawmakers in January.

Although budget asks are submitted to OMB and the governor ahead of time, the presentations enable budget officials to get more information on certain things and hear from members of the public.

The chief justice’s letters, sent to OMB Director Mike Jackson Oct. 15, were an opportunity to deliver a final message, and the priorities as detailed in them should come as no surprise to anyone who has followed Chief Justice Strine’s tenure.

His asks in the letters are more general rather than specific dollar amounts, calling on the state to provide more legal support for the poor, fully fund a judicial technology fund, expand the court’s workforce, raise pay for state workers and partner with the private sector to fund new judicial facilities.

The total operating request is for $104.3 million. The judicial branch’s current year operating budget is $100.7 million.

 

Read more:

https://delawarestatenews.net/news/chief-justice-submits-final-budget-request/

Market Manipulation: The Good, the Bad, and the Ugly

While government incentives are typically touted as great tools for economic development and job creation, they tend to have a negative impact on the community.

Should government decide which businesses operate within a market?

Tax breaks for businesses eliminate revenue, while employment incentives create an additional burden on local services, schools, and health systems by bringing in more residents. The net loss to the community can be exacerbated by the taxpayer burden of monetary incentives.

In addition to offering little benefit to the local community, they don’t target what actually drives a business to select a location to establish or expand: talent, geographic location, and markets.

When Bloom Energy located in Delaware in exchange for subsidies amounting to hundreds of millions of dollars, the company promised thousands of jobs. Now, Bloom employs a fraction of what it promised and its officials do not expect the company “to be profitable for the foreseeable future.”

But Bloom isn’t the only example of wasted money from incentives to businesses. In 2010, Fisker was allotted more than $20 million in taxpayer dollars, but went bankrupt three years later and left the plant empty. The company continues to operate in California today because that is where the talent to develop Fisker electric cars resides.

Jeffrey Dorfman, a professor of economics at The University of Georgia and consultant on economic issues to a variety of corporations and local governments put it best:

“When politicians give away six-figure sums of taxpayer money to attract a new employer, don’t think of it as an investment in the local economy. It is better thought of as a vote-buying scheme funded not with campaign contributions but with taxpayer dollars.”

The new Delaware Prosperity Partnership (DPP) offers some hope, utilizing research and data analysis, as well as promotion of the state’s innovation, business, and economic development to encourage entrepreneurship in the First State. However, with the steady stream of bad business legislation out of Dover, it is unlikely that great companies will want to establish in Delaware, no matter the incentive.

To attract and retain businesses, we must improve our business climate, tax rates, regulations, and talent pool. It’s simple: great things require the right environment to grow.

Real Estate Transfer Tax: State’s Way of Transferring its Financial Burden

A 1% increase in Delaware’s real estate transfer tax in 2017 brought the rate to 4%, worrying realtors in the state. The increase placed a burden on both buyers and sellers, who equally split the tax at closing.

Sellers lost dually with this legislation, facing a harder sell and receiving less profit at closing by having to cover the other half of the transfer tax. Buyers lost too, now having to save thousands more to cover the tax alone. As if a down payment on a home wasn’t a big expense already.

So, who won with the 1% increase?

It should come as no surprise to most that Delaware State Government is the sole winner in the deal, with the extra revenue going directly into the General Fund. The measure was enacted to combat the 2017 budget shortfall, to the detriment of realtors and homebuyers.

Bruce Plummer, president of the Delaware Association of Realtors, said “We know for a fact that home ownership builds strong communities,” with “better school systems, better health, higher volunteerism rates and lower crime rates.”

The legislature disregarded Delawareans when making a decision that impacted their ability to move from renting to owning a home—a big step for many. Realtors, businesses, and communities all lost with legislation that halted more homeownership. Those looking to move to the state were given a reason to reconsider.

When it came to the concern over the increase, Plummer asserted, “We’re not just trying to protect the industry, we’re trying to protect the home owner and Delaware’s private property rights.”

So are we. The real issue boils down to when our legislators will fight for these protections as well.

Unfortunately, this is yet another example of the General Assembly putting itself above residents and businesses. Delaware cannot continue to push key industries aside in favor of funding its bloated spending.