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Delaware stays in middle of pack in Covid-19 jobless claim decline

From Delaware Business Now

Delaware continues to see a slower recovery than its neighbors from the coronavirus pandemic.

The WalletHub website reports that the state ranked 19th in the decline in unemployment claims stemming from the shutdown of schools, businesses, and nonprofits from Covid-19.

Source: WalletHub

Florida, which has been struggling with a surge in cases, ranked 51st. Two other states with a surge in cases, Texas and California, ranked 37th and 40th respectively.

Neighboring Pennsylvania ranked third in the decline of jobless claims, with Maryland seventh and New Jersey in the 10th spot.

Delaware saw a decline in its June unemployment rate, but ranked 10th from the bottom among the 50 states.

The hospitality industry has seen a sizable loss in jobs, even though the state was quicker to reopen than neighboring New Jersey and Philadelphia.

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State, New Castle County will offer $100 million in grants to small business, nonprofits

From Delaware Live

The state of Delaware and New Castle County have launched a new program that will offer $100 million in relief grants to small businesses and nonprofits across the state who have been affected by COVID-19.

The DE Relief Grants program will be funded by some of the state’s and county’s share of money from the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Delaware Division of Small Business director Damian DeStafano said during Gov. John Carney’s weekly press conference about COVID-19 Wednesday afternoon that the fund would be “at least” $100 million, but will be re-evaluated if the need is higher than anticipated.

The program is expected to reach more than 3,000 small businesses and nonprofit organizations with grants ranging from $30,000 to $100,000, a press release from Carney said.

The Division of Small Business will be taking applications in early September at delbiz.com/relief.  Funding rounds will follow in October and November.

The site is live now, he said, and the division will be hosting online webinars about how to apply. DeStafano recommended that business owners and nonprofits sign up now in order to be alerted by the webinars.

The program is designed to reimburse people for changes required by COVID-19 or who want to make changes because of it, DeStafano said.

The grants can be used for:

  • Purchasing equipment to make a workplace suitable for COVID-19 safety (such as PPE, plexiglass, air purifiers, etc.)
  • Refinancing of debt incurred due to COVID-19 (including State of Delaware HELP loans)
  • Advertising efforts undertaken as a result of COVID-19
  • Fixed expenses the applicant accrued during COVID-19

The size of the relief grant will be based up the business or nonprofit’s 2019 revenue:

  • $0-$500,000: Up to $30,000
  • $500,000-$1 million: Up to $50,000
  • $1 million-$2.5 million: Up to $72,500
  • $2.5+ million: Up to $100,000

“Multiple programs are necessary to address the challenges Delaware’s small businesses face,” DeStefano said in the press release. “We believe this assistance, coupled with other efforts, including the Hospitality Emergency Loan Program (HELP) and the COVID-19 Customer Protection Standards, help make the difference for some of our small businesses.”

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Pro-Business Group Expands Efforts in Delaware with Formation of New PAC

Press Release from our sister organization, A Better Delaware PAC

A Better Delaware has formed the A Better Delaware PAC to participate in the 2020 election cycle

Wilmington—A Better Delaware, a pro-business, pro-jobs group that also promotes more accountability and transparency in Delaware government today announced the formation of A Better Delaware PAC to expand their advocacy efforts into 2020 campaigns.

“We must apply pressure at the grassroots level. We must educate legislators in the State House,” says founder Chris Kenny. “But we will never see real change if we keep sending the same anti-taxpayer, anti-business lawmakers back to Dover, and we must protect legislative allies who understand what makes for a stronger economy.”

A Better Delaware (ABD) was launched last year in response to the direction our state was headed due to decisions made by our lawmakers in Dover. Kenny believed the state lacked a voice for taxpayers and small businesses, and recognized that the First State was far from first when it came to economic, business, and employment rankings nationally. In fact, Delaware was consistently in the bottom for fiscal stability, employment, business climate, and tax rates.

Since then, ABD has spoken out on numerous issues impacting Delaware’s business climate, transparency in government, taxes, the Certificate of Need process, and many others. In less than a year, it has gained a following on Facebook of nearly 10,000 people.

A Better Delaware PAC takes ABD’s efforts to the next level through direct voter contact during the campaign season to help ensure the election of pro-taxpayer, pro-business, good government candidates.

“For too long, Delaware campaigns have been dominated by special interests who stand to benefit from more government spending at the expense of taxpayers,” said Kenny. “ABD PAC will be a counterweight that backs candidates who put Delaware first.”

Delaware rolls out financial aid for renters, homeowners late on rent, mortgage payments

From The News Journal

Delaware is going to spend $40 million to help residents who are struggling to pay rent or mortgages during the coronavirus pandemic.

Eligible renters and homeowners can get up to $5,000 in aid. The money would be paid directly to the property owner or mortgage servicer.

Gov. John Carney and the Delaware State Housing Authority announced Monday that the state is resurrecting the Delaware Housing Assistance Program to help people who are missing payments because they lost income due to the coronavirus pandemic.

The program was originally launched in late March but then halted a few weeks later because it was swamped with applications. At the time, they received requests from three times more tenants than they originally set aside funds to help.

The $40 million to pay for this program comes from the federal CARES Act, which Congress passed in late March to help states and local governments cover coronavirus-related expenses. The state is paying half from its share of the federal money and New Castle County is paying the other half.

Using weekly Census surveys, the financial consulting firm Stout Risius Ross LLC found about 29% of renters in Delaware at the end of July had no or only slight confidence in their ability to pay the next month’s rent. That firm also estimated a monthly shortfall of $10 million in rent statewide.

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Carper sets stage with ENCORES bill to support live entertainment venues

From Delaware State News

MILTON — Live entertainment venues look to get a boost, as Sen. Tom Carper, D-Del., discussed his newly introduced bill at Milton Theatre on Monday, which will give live entertainment venues across the country a tax credit to make up for revenue lost to canceled shows amidst COVID-19.

The Entertainments New Credit Opportunity for Relief & Economic Sustainability (ENCORES) bill was introduced by Sen. Carper and Sen. Jon Tester, D-Montana, to Congress on July 29. The bill has been assigned to the finance committee in the House of Representatives to await further discussion.

Sen. Carper said his love for the arts is what pushed him to create the ENCORES bill.

“I love music, I love live performance, it’s one of the joys of my life, and I think it’s one of the joys of a lot of people’s lives,” Sen. Carper said. “If we didn’t have music and the arts, we would be missing a whole lot. You don’t have to be in New York City, Philadelphia, Boston, or LA to find great music. We have it here.”

The live entertainment industry has dealt with show cancellations, ticket refunds and strict health regulations since the spread of COVID-19, making it one of the hardest-hit industries by the pandemic thus far. Live entertainment simply does not exist in the same way since March, as they were one of the first industries to shut down and have faced many hardships in trying to reopen safely.

Milton Theatre Executive Director Fred Munzert spoke Monday about how COVID-19 has taken a significant toll on its staffing and revenue.

“On the 13th (of March), we shut down. It was just so emotional for us and everyone who worked here. (For) almost 30 employees and contractors, this was our life blood, our passion, our love, and for many, our mortgage payment, putting food on the table for our kids, all of those things,” Mr. Munzert said.

“We let everyone go. We had to. Our income stopped in a day. Then, the influx of calls for refunds. $150,000 almost immediately of requests for refunds came in. It was remarkable, the impact and terrifying.”

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Help Delaware Workers Now

Delaware employers and workers are scrambling to get back to normalcy and get back to work. Our economy is suffering and many are left to wonder what will happen to their businesses and livelihoods if lockdowns persists, or a second wave of COVID—19 hits.

Things are tough now, but they have never been easy. Pre-pandemic, Delaware was the 7th worst place to start a businesses and ranked 34th for employment. Many factors contributed to the First State being left in this position, but one stands out: regulations.

As of last year, Delaware’s regulations included 104,562 restrictions, 6.7 million words, and would take 9 weeks to read through—and all of this is in addition to federal regulations. For a small state, that’s quite a regulatory burden.

State and local regulations often directly intervene in specific markets, causing greater distortions than broader federal regulations. State regulations on industries, employers, and workers restrict competition and are job killers.

Delaware ranks 42nd for its regulatory environment and 37th for economic environment. The state ranked worst in the nation for its regulatory environment, West Virginia, also ranks 48th for its economic environment, and this trend holds for the states with the worst regulatory environments. Regulations are an economic plague.

Now, more than ever, we must address our codified limitations to an economic boom and a better business climate. Currently, one out of eight Delawareans included in the labor force are unemployed and the state has lost close to 50,000 jobs since last year.

Governor Carney recently signed an Executive Order creating the Rapid Workforce Training and Redeployment Training Initiative to assist Delaware workers and their families who have lost jobs and income due to the COVID-19 crisis. This program will help identify key areas for employment and implement rapid training and certifications to get people back to work faster.

Other actions like this could be done swiftly to help Delaware workers and businesses.

In last week’s blog, we mentioned the apprenticeship ratios in Delaware that are massive job killers. Other items, such as licensing requirements and permit processes could be fixed through rapid action to reduce the regulatory burden on employers and workers. These regulations hurt the ability for places like barber shops and nail salons to start their businesses.

The state’s prevailing wage sets an artificially high price on contractor wages on government projects, effectively reducing the total number of jobs that are filled and limiting the work that can be done.

Helping independent contractors has been an important issue that has come to light during the pandemic, as many statewide were unable to file for unemployment due to regulations that technically held up the process for benefits to be distributed to these workers. Other restrictions on licensing and independent firms also keep doctors and lawyers from locating and developing their practices in Delaware.

Environmental, energy and utility regulations place a major strain on many businesses, especially manufacturing businesses.

Long term, Delaware should take steps to address its massive regulatory body. Regulatory reform is not a new wave idea springing from the ashes of coronavirus. Notable regulatory reform programs exist in Indianapolis, San Diego, New York City, Colorado, Minnesota, Virginia, and in our neighboring states Pennsylvania and New Jersey. In May 2019, Idaho did an entire regulatory reset, where their state government eliminated all regulations and will only bring back the ones it chooses.

While mimicking Idaho would be a massive undertaking, the state could create an independent reform commission, and address regulations by deciding which are truly beneficial, focus on outcomes instead of processes, simplify regulations to make it easier for businesses to understand, and be transparent in their process.

Last May, a bill was introduced in Delaware that would have required an economic impact statement for regulations, as well as a timeline for review of regulations with an emphasis on minimizing the economic impact they would cause. This bill was stalled in committee and never received a vote.

This should be a consideration for the Delaware legislature in the next legislative session, but more immediate actions like those listed above can be taken now to help Delawareans.

It’s time to fix job killing regulations

In a move uncharacteristic for our current state leadership during the pandemic, the Delaware Department of Transportation (DelDOT) recently announced new efforts to support small businesses in Delaware. The Small Commercial Entrance process will reduce costs and wait time for eligible small businesses, and an expedited review and approval process is expected before the end of summer.

More businesses and business groups are speaking out about the lack of attention and help they have received from state leadership, after 4 months of the State of Emergency and little clarity or assistance. For small businesses and new businesses, the DOT rule changes are a bit of hope at this time.

If this can be done in the DOT, other agencies could potentially issue rule changes to help employers and workers since the administration refuses.

Businesses have been crying out for help after being forced to shut down, but workers are still suffering through the impact of COVID-19 in Delaware.

Delawareans who were laid off at the start of the shut downs and applied for unemployment in March have yet to receive benefits. Often it is difficult to get an answer when contacting the office for answers or help with payments. Without work and without unemployment being delivered in a timely manner, this has left Delawareans wondering how they will stay afloat for the remainder of this pandemic. This would position the Delaware Department of Labor (DOL), as the next logical entity to make rule changes in order to help struggling Delaware workers find jobs.

A big concern with current DOL anti-business regulations is the mandatory and restrictive apprenticeship ratios that prevents Delaware businesses and contractors from hiring new workers now.

Delaware’s ratio means that you can have 1 apprentice for every 3 journeyperson. Businesses and contractors are not permitted to hire a second apprentice until there 6 journeypersons, and so on as you hire more apprentices. These overly restrictive rules sideline Delaware workers from good paying jobs right now.

Bottom line: these mandatory ratios are job killers.

For instance, there are close to 30 trades that are restricted to only hire one apprentice for every 5 journeypersons. The DOL touts 1,500 current apprentices, but if this ratio was adjusted to 1:1 or 1:2, this would result in thousands of new hires immediately.

By DOL making this change in the manner that the DOT issued their rule changes to help small businesses, trade workers in Delaware would have more opportunities for employment, and the state could see an increase in total jobs available. There are likely other opportunities for the DOL and other agencies to readdress their rules and regulations to help Delaware’s workers.

State regulations reduce job opportunities and limit the workforce—especially for unskilled or low-skilled workers—and must be addressed in order to get people back to work.

A better Delaware would establish an inter-agency committee immediately to help put Delaware back to work right now.

‘I am going to be screwed’: Unemployed Delawareans face loss of federal benefits

From Delaware Online

Qiana Jones’ catering business, founded in late 2018, really took off last year. But when the coronavirus pandemic hit in early 2020, Jones was forced to return $15,000 worth of payments for canceled events, sending her bank account into the negative.

Jones did not receive her unemployment insurance until the week of July 4. Two weeks before she was paid, she was handed a 60-day eviction notice and moved in with her brothers.

“I’m 48 and sleeping on an air mattress in a living room, and I’m trying to find a place now,” Jones said through tears. “It’s difficult. It’s really hard.”

Jones is among the 12.5% of Delawareans who are unemployed as of June. For some, the $600 per week enhanced unemployment benefit is all that is keeping them afloat. But with those benefits due to expire at the end of the month, many Delawareans who still cannot return to work are wondering how they will go on.

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Why won’t Delaware help small businesses?

A Better Delaware has consistently spoken out against poor leadership regarding economy and business in Delaware during the COVID-19 pandemic. We were not the only ones. The Delaware State Chamber of Commerce, the Central Delaware Chamber of Commerce, the Delaware Small Business Chamber of Commerce, the Delaware Prosperity Partnership, legislators, and business owners and leaders have all called for more attention to this critical issue Delaware faces.

When the Chambers and DPP offered to help, little was done. When industry leaders begged for help, state leaders told them that they were not the priority—only health was. While the health-related efforts here were commendable and necessary (Delaware currently has the 13th highest per capita case count in the nation), we firmly believe that saving lives and saving livelihoods goes hand-in-hand.

On April 13, three weeks after the mandatory stay at home order issued by Governor Carney, and after much outcry from the business community for a lack of attention, Delaware entered a multi-state task force to address reopening with New York, New Jersey, Connecticut, Rhode Island, Massachusetts, and Pennsylvania.

As if Delaware leadership was controlling the task force itself, transparency has been missing from the efforts of the task force. At the time of publication, we could not locate a website or report for the Covid-19 Regional Advisory Council. What we do know is that New York and New Jersey have recently turned their backs on Delaware despite the alliance.

On June 1, perhaps after realizing the futility of this partnership, Delaware announced its own entity that would, through a subcommittee, address business issues related to COVID-19. It took 69 days, a weak regional effort, and continued pressure from various stakeholders to finally establish Delaware’s Pandemic Resurgence Advisory Committee.

So far, the committee itself has taken little action, despite meeting twice a month and having supplemental weekly subcommittee meetings. The Business Subcommittee has met several times, and the most they have accomplished is asking for data on the impact of COVID-19 on Delaware’s agriculture industry and requesting better communication and more transparency (sound familiar?).

Frankly, Delaware’s efforts to help its own businesses have been next to nonexistent, spare the H.E.L.P. loans that are only available to the hospitality industry. It’s not that we can’t afford to help our small and family-owned businesses: we just gave $2.5M to a British bank that only a year ago took 500 jobs out of Delaware, and the state also received close to $900M in CARES Act funding that has yet to be allocated. We have simply chosen not to help.

Delaware can and mustdo better. Below is a list of what other states have done to help their small businesses, and shows what could be done for our own in the First State.

Arkansas: $7M for zero-interest loans from Arkansas’s Quick Action Closing Fund

California: $50M loan guarantee program

Washington DC: $33M Small Business Recovery Microgrants program

Florida: $49M for Small Business Emergency Bridge Loan Program

Illinois: $500M Small Business COVID Relief Program, $20M from Community Development Block Grant funds for small business grants, $60M for small business grants

Indiana: $30M for Small Business Restart Fund (funded by CARES Act)

Iowa: Iowa Small Business Relief Fund, Iowa Targeted Small Business Sole Operator Fund

Louisiana: $50M loan guarantee program for small businesses, $300M of CARES for small businesses

Maryland: Emergency Relief Grant Fund for small businesses, Emergency Relief Loan Fund for small businesses

Massachusetts: $10M Small Business Recovery Loan Fund, Empowerment Grant for Small Businesses

Michigan: Michigan Small Business Relief Program, $100M of CARES Act funding for Michigan Small Business Restart Program

Minnesota: Small Business Emergency Loans (interest free), $62.5M in CARES Act funds for a small business grant program

Mississippi: $300M of CARES Act for a grant program for small businesses, with priority for businesses that did not receive federal PPP loans

Montana: Will use some CARES Act funds for business stabilization, deploying funds over an immediate- to mid-term time frame for forgivable loans, and low- or zero-interest loans

New Hampshire: $400M of CARES Act funds for small business grants

New Jersey: $10M for New Jersey Small Business Assistance Loan program, $5M for the New Jersey Small Business Assistant Grant Program, $6M for Small Business Lease – Emergency Assistance Grant Program

New York: $100M for New York Forward Loan Program for small businesses

Pennsylvania: $60M for Working Capital Access Program for small business loans, $225M for micro-business grants

South Dakota: $10.5M for a Small Business Relief Fund

Tennessee: $200M of CARES Act funds for the Tennessee Business Relief Program

Vermont: $400M in CARES Act funds for an economic relief and recovery package

Washington: $10M for the Working Washington Small Business Emergency Grant program

Wisconsin: $75M for a small business assistance grant program

Wyoming: $50 million in grants through the Wyoming Business Interruption Stipend

Delaware ranked poorly in COVID standings

Four months ago, our world changed.

A recent study State Economies Most Exposed to Coronavirus revealed:

  • Delaware ranks 29th overall
  • Delaware ranks 39th for “Highly Affected Industries & Workforce”
  • Delaware ranks 51st overall for “GDP Generated by Highly Affected Industries as Share of Total State GDP”
  • Delaware ranks 46th for “Accommodation and Food Services”
  • Delaware ranks 47th for “Entertainment and Recreation”
  • Delaware ranks 50th for “Retail Trade”
  • Delaware ranks 42nd for “Educational Services”
  • Delaware ranks 51st for “Other Services (except government and government enterprises)”

We may be the First State, but we’re last where it counts.

If we look back at studies released in the past two years, it’s clear that Delaware’s economy and business climate were not suited for the corona-crisis.

A study from WalletHub ranked Delaware as the 7th worst state to start a business and the 2nd worst for small businesses. Delaware’s fiscal stability was 45th in the nation and ranked 44thfor overall fiscal health.

At the start of 2020, before coronavirus, Delaware’s economy was one of nine nationally predicted to shrink over the next six months.

The coronavirus forced people out of work and businesses to close their doors—some forever. At first, the effect of or economy was reminiscent of the Great Recession in 2008.

According to the Federal Reserve Bank of Philadelphia, Delaware’s business conditions recovered from the Great Recession at a noticeably slower pace than the rest of the nation, taking three more years to stabilize than the average.

This would mean that a return to our dismal economic position isn’t likely until at least 2023. Unfortunately, it is now clear that the economic impact of COVID-19 is worse than 2008.

What will that mean for Delaware moving forward from this crisis?

First, we hope that this will push Delaware to be more focused on the small and family-owned businesses right here in the state. Instead of being used to play a losing game of corporate welfare, taxpayer dollars could help the businesses in their own communities.

The COVID-19 pandemic should lead to wiser saving and spending habits from our state leaders in the future. During the next legislative session beginning in January 2021, A Better Delaware is looking for more serious consideration and evaluation regarding funding, programs, and expenses, as well as a codified savings plan.

If we use this as a much needed wake up call, we have the chance to truly make Delaware better in the future.