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Former Gov. Mike Castle joins A Better Delaware board

From: Delaware State News

WILMINGTON – Former Governor and Congressman Mike Castle has joined as an Advisory Board member at A Better Delaware, a non-partisan public policy and political advocacy organization that supports pro-growth, pro-jobs policies and greater transparency and accountability in state government.

Chris Kenny, chairman and founder of A Better Delaware, announced the addition of Gov. Castle to the board this past Thursday.

“Governor Castle is one of Delaware’s most distinguished statesmen,” said Mr. Kenny. “ABD is fortunate to benefit from his wise counsel to generate pragmatic solutions to help advance our mission.”

“A Better Delaware has established itself as a leading mainstream voice for taxpayer accountability and good governance,” said Gov. Castle. “I am pleased to join the Board and look forward to helping

the team fulfill ABD’s vision for Delaware that embraces a more favorable environment for job creators and delivering more balance in Dover.”

Gov. Castle will serve with Advisory Board member Sam Waltz, founding publisher of the Delaware Business Times and an award-winning respected business and civic leader active in strategic C-level business and change counsel.

“I’ve known Mike Castle since 1975, when he was a young state senator, and I came to Delaware for the News Journal to cover the General Assembly and the Governor. Indeed, Delawareans will be far better off with Gov. Castle joining us at A Better Delaware,” Mr. Waltz said.

During 40 years in public office, Gov. Castle served two terms as governor, from 1985 to 1992, before he was elected to the U.S. House of Representatives for nine terms. While in Congress, he served on the Financial Services Committee and on the Education and Labor Committee and was a strong advocate for fiscal responsibility and working across party lines to build bridges and form coalitions to find pragmatic, bipartisan solutions to some of the nation’s most pressing problems.

“Mike Castle shares our passion to advocate with and for the citizens of Delaware,” said Kathleen Rutherford, executive director for A Better Delaware. “In the upcoming legislative session, we will focus our support on formation of a nonpartisan Office of Legislative Ethics and an Office of Inspector General. Further, we will be advocating for lowering individual and corporate tax burdens, fiscal prudence by increasing the Rainy Day Fund, adhering to budget smoothing, and paying down the public pension debt.”

Auditor McGuiness Announces Creation of a National Unemployment Insurance Audit Template

Delaware.Gov News:

DOVER, DEL. –State Auditor Kathy McGuiness today announced the creation of a national unemployment insurance audit template developed as part of a multi-agency effort. While some states have already begun audits related to unemployment insurance, this template seeks to serve as a framework so other states can easily identify issues and recommend best practices.

“Many states have already painted a detailed picture of the fraud that targeted their unemployment insurance system,” McGuiness said. “Our goal is to incite broader participation so as to paint an overarching picture of the vulnerabilities that exist in unemployment insurance systems throughout the country.”

Delaware collaborated with the Office of the D.C. Auditor, the D.C. Office of the Inspector General, the Louisiana Legislative Auditor’s Office and the Idaho Legislative Audit Division to create this uniform framework.

“My office values collaboration with other state auditors on topics of ongoing importance and interest,” said D.C. Auditor Kathy Patterson. “The unemployment audit template is useful in focusing on relevant data and data accuracy, so it has value for future audits and even for offices not participating in this study today.”

When unemployment peaked at 14.8 percent in April 2020, unemployment insurance systems faced an overwhelming wave of claims. States struggled to keep up due to previous budget cuts and old, inefficient systems.

“The surge of claims resulted in vulnerabilities surfacing in each and every state’s unemployment insurance system,” McGuiness said. “Identifying and understanding existing vulnerabilities allows us to reduce fraud, waste and abuse and improve unemployment systems to better serve the public.”

Learn more about the Delaware Office of the Auditor of Accounts online at https://auditor.delaware.gov. 

As labor crunch worsens, Bayhealth works to lure part-timers

From: Delaware Business Now

Delaware’s second-largest hospital-healthcare system is offering full-time benefits to new part-time clinical workers as it struggles with staffing shortages.

Qualified applicants also get a decent chance at winning a  trip for two to the Bahamas.

Bayhealth, which operates hospitals in Dover and Milford, today rolled out a part-time/ weekend program in response to the staffing crisis. The healthcare system says the program could boost its staff headcount by 13%.

Hospitals in Delaware and around the country are struggling with the twin crises of staff shortages and the recent surge in Covid-19 patients. Moreover, burnout from the nearly two-year-old pandemic has sent many to the sidelines.

Some of the new Covid cases are indeed coming from people who went into the hospital for other reasons. Still, nearly all beds are taken with some patients who should be discharged to a rehab facility but are unable to find an available bed.

Evidence points to a lack of childcare being one big reason for many people not returning to the workplace.

A related issue is a “gig economy,” which employs many but offers few benefits such as health insurance. Added to all this is the “great American quit” that led some to retire early, others to live off their savings for a while, or take a position with better benefits and an improved work-life balance.

“At Bayhealth, we get it. We understand these are tough times for working parents and alike, especially healthcare workers who have no choice when it comes to their calling to take care of our communities,” said VP of Human Resources and Chief Diversity Officer Shana Ross. We want them to know we are there for them.”

Under the program, benefits such as paid time off, sick time, medical coverage, and a 401 (k) retirement program are offered.

Qualified applicants will be entered to win a three-day, all-expense-paid trip for two to Nassau. Information on open positions is available here.

We can expect to see more of these incentives that go beyond sign-on bonuses as there are few signs that a tight labor market will go away anytime soon. – Doug Rainey, chief content officer.


 From: Town Square Live: In a letter to school districts that Gov. John Carney wants to join the Wilmington Learning Collaborative, he said he plans to put another $14 million into city school efforts.

Carney wants the boards of the Red Clay, Brandywine and Christina districts to join the collaborative, which would create a new entity to oversee the Wilmington students in those three districts.

If created Carney plans to put $7 million into its efforts to help raise city learners’ abilities and scores.

The other $7 million would go into meeting some of the recommendations of the Redding Consortium for Educational Equity, although a Monday press release did not say which of Redding’s recommendations it would be funding.

In February, the consortium asked for four things:

  • $8.8 million in focused services for children from birth through ag that would expand early childhood home visits; support development screenings and provide free high-quality full-day Pre-K services to 3- and 4-year-olds in high-poverty areas.
  • $2 million per school for greater access to before-school programs, after-school programs, summer programs and school-based health centers: $2 million per school
  • $2 million to enhance data collection to better address race-related inequities.
  • $1.3 million plus $4,000 per scholarship to improve teacher recruitment and retention. Part of that would be used to create whole-school professional learning packages in five high-need schools in Wilmington.

Both the Learning Collaborative and the Redding Consortium are focused on aiding children in Wilmington, particularly children in poverty, who often fall behind the state and national standards.

“Unfortunately, we know city students are not getting the education they need and deserve,” Carney said in the letter to the school boards. “We have much work to be done to ensure all of our third graders are reading on grade level, to set them up for future academic success. Wilmington children, families and educators need additional support. I stand ready to offer that support – and I hope you’ll join me.”

The collaborative, a project of the governor’s office and the Department of Education, believes that’s partly because the city’s young students are split among four school districts under a confusing ruling trying to ensure desegregation. The organizers have held more than 100 meetings with boards, teachers and community members, and Carney has posted on Facebook about how he’s walking through neighborhoods knocking on doors to spread the word.

Red Clay, Brandywine and Christina districts all have schools in the city limits. Colonial also has city students, but they are bussed into the suburbs and don’t stay in the city for classes.

The number of city students in each district comprises 15% or fewer of its student body, which means decisions made for the majority of students often don’t work for them.

The collaborative will be designed to focus on programs and resources that bear on issues that affect city learners in much greater degree than they do suburban learners, including poverty, crime, trauma, food insecurity, transiency as families move, and more teachers leaving city schools.

One thing that the collaborative may be able to do is create a unified curriculum for city students. Many of the students move often, and moving into a new district can mean a completely different curriculum with different requirements.

Christina is expected for vote on the issue Tuesday, Jan. 11. Red Clay’s vote is expected Jan. 19, and Brandywine’s vote may come Feb. 7.

A vote would authorize each district’s superintendents to begin negotiating a memorandum of understanding that would detail the set-up and makeup of a collaborative board, how it would be staffed and how it would operate. The goal is to have it operational by July 1, when a new state fiscal year begins.

If things go as organizers want, many of the ideas for improvement would come from teachers and others who already have knowledge of the situation and have seen things that can work and won’t work.

“The Wilmington Learning Collaborative model is one that we’ve seen work in other states.,” Carney said in in the letter. “It is a partnership among city schools to work together on behalf of our children in Wilmington – and to empower educators who know best what city students need. It will create a hyper focus on the challenges facing Wilmington students and educators.”

Carney pointed out that the General Assembly has approved significant new funding for schools across Delaware that include Opportunity Funding, K-3 Basic Special Education funding, and additional mental health staff.

“I believe city educators are doing everything within their power to help our children succeed,” he said. “They need our support. I know you feel the same way. That’s what this plan is about: empowering educators on the ground and giving them support they need to improve outcomes for our children who need our help the most.”

Delaware falls in middle of pack in report gauging states’ COVID-19 shutdowns and economic impact

From: The Center Square 

(The Center Square) – A newly released study ranked Delaware the 31st most severe state as it weighed state officials’ shutdown responses in the first 13 months of the pandemic against the economic impact.

The Georgia Center for Opportunity, an independent, nonpartisan think tank, recently released the report, “Assessing Each State’s Response to the Pandemic: Understanding the Impact on Employment and Work.”

The look-back at actions taken from March 1, 2020, to March 31, 2021, factored in such data as school and workplace closures, gathering restrictions, capacity limits and stay-at-home orders. A series of technical computations were taken in each state before the ultimate rank was prescribed.

Georgia Center’s methodology for its government severity index also was based off a separate study, the Abridged Oxford Stringency Index, from Oxford University in England.

Oxford researchers placed Delaware higher on its severity index rankings – No. 12 – after examining statewide responses to public event cancellations, school and workplace closings and stay-at-home orders.

Georgia Center researchers provided the rationale behind the disparities between the two separate analyses in their report.

“Reviewing the Abridged Oxford Stringency Index more closely, it was decided to undertake a project of creating a new index to define more narrowly those economic actions with the most potential to harm employment and to provide an alternative methodology to account for local actions,” Georgia Center researchers wrote in the report.

After combing through data across the country, Erik Randolph, director of research at Georgia Center, said there was a correlation between the severity of states’ government actions and economic impacts.

“The jobs situation would likely be much better today, had some states been less severe with their economic restrictions to fight the public health threat from COVID-19 and its variant,” Randolph, who was the author of the report, said in a statement.

But Georgia Center’s research found no correlation between government shutdowns and the rate of COVID-19 hospitalizations or deaths, suggesting even the most severe actions failed to prevent deaths or hospitalizations linked to the virus.

“The results suggest that state and local governments must craft their economic response to the pandemic with greater care, seeking to impact employment less severely,” Randolph said.

In the government severity index, Washington state was ranked No. 1, followed by Hawaii, New York, Colorado and, at No. 5, California.

The five least severe states in the analysis were Nebraska, Iowa, North Dakota, South Dakota and, at No. 50, Ohio.

In a separate narrative analysis from key takeaways within the report, Georgia Center researchers pointed to the perceived value work has on society, which the organization described as “an often-overlooked public health indicator.”

“Work has long been a measure of success and personal health for individuals and for communities,” the researchers wrote. “What’s more, the economic impacts of our pandemic-era responses – such as closed businesses and rising inflation indicators – are often most impactful to marginalized communities, including those in poverty and people of color.”

General Assembly committee meetings to stay virtual

From: Delaware Live!

Delaware House and Senate leaders announced Friday that all legislative committees will meet virtually throughout the month of January when the General Assembly returns to session Tuesday, Jan. 11.

House Speaker Pete Schwartzkopf, D-Rehoboth, and Senate President Dave Sokola, D-Newark, said the decision was made in response to the “significant increase in COVID-19 cases and extremely contagious nature of the Omicron variant.”

By holding committee meetings virtually, the leaders said, the General Assembly hopes to limit exposure, mitigate the spread of the virus and preserve a continuity of government.

According to a press release announcing the decision, members of the public will be able to attend all virtual committee meetings and deliver comments on pending legislation.

Links to register for each meeting will be posted on the General Assembly’s website. Scheduling information, agendas and other details also will be posted on the “Committee Meetings” pages for each chamber.

Schwartzkopf said that while he misses the normal activity of Legislative Hall, ensuring the health and safety of legislators, staff and the public is his top priority.

“The work of the General Assembly is critical, and we want to reduce the chances of an outbreak, which could potentially cripple the operations of this branch of government,” he said. “There are reasonable steps we can take in the short-term to protect everyone and continue our work.”

Schwartzkopf said he’s hopeful the current spike in COVID-19 cases is temporary and that House and Senate leadership will re-evaluate the General Assembly’s plans in March.

Joe Fulgham, director of policy and communications for the House Republican Caucus, echoed Schwartzkopf’s sentiment.

“While we would like the state legislature to return to the way it has traditionally operated, the current conditions involving the spread of COVID make that impractical and imprudent,” Fulgham said. “Hopefully, this latest spike is the virus’s last significant surge and we can return to normal operations later in the year.”

Both the House and Senate will meet in person at Legislative Hall on Thursdays to consider legislative agendas throughout January.

On session days, a limited number of seats in the gallery of each chamber will be available to members of the public on a first-come, first-served basis. Doors to Legislative Hall will open one hour before voting is scheduled to begin on those days.

Members of the public and legislators will be required to wear a mask while in Legislative Hall.

Legislative proceedings will continue to be broadcast online via the General Assembly website.

Access to the remainder of the building will be restricted. Members of the public will not have access to the wings of the building or the legislative library. The cafeteria will remain closed for service.

“I think every one of us had hoped the pandemic outlook and the format of our legislative session would be different this January, but the sudden spike in COVID cases combined with the highly contagious nature of the Omicron [variant] demands that we take steps to protect our continuity of governance,” Sokola said.

“My sincere hope is we can revisit these policies later in the year, but for now we all need to make decision[s] that protect the health and welfare of our guests and employees.”

Milford faces significant bus driver shortage

From: Milford Live! On Sunday, January 2, Milford School District notified parents that Milford High School students would operate on a remote learning schedule on January 3, 2022. The virtual learning requirement was due to a significant bus driver shortage. Although a snowstorm closed schools completely on Monday, the shortage of bus drivers in the state has grown to unmanageable levels.

“One thing I have to say, our contractors, our bus drivers really work together to make sure we run all our routes this year,” Dr. Kevin Dickerson told the Board of Education at their regular meeting in December. “We’ve had to collapse some routes at times and make routes where we’ve had employers help some of or bus drivers be able to maybe get off work a little bit earlier so they can drive a school bus.”

Dr. Dickerson explained that they have called in the district’s transportation administrative assistant, Rose Viramontes, who has a valid bus driver’s license, to pick up routes from time to time.

“But we do have concerns as we go through the winter months,” Dr. Dickerson said. “If we do go down some drivers, we are going to have to do some problem solving. It may mean that we have a bus or two that may have to go back and do pickups later on. But when we run into situations, we will communicate as early as we can with families, and we have here recently with a message to just have other plans in place just in case.”

The bus driver shortage is not unique to Milford. Districts across the state are struggling to run bus routes due to a lack of bus drivers. Although this shortage is not new as contractors have been reporting a lack of drivers for over a decade, the recent pandemic and a labor shortage overall have made the situation much more serious.

There are several factors that are feeding into the shortage of drivers. Current drivers are ageing, and younger people are not stepping up to take their place. Currently, the state uses a formula to pay contractors and districts which is meant to cover equipment, maintenance and driver pay. The districts cover 10 percent of the cost while the state covers 90 percent. For many years, bus contractors have been claiming that the contract does not cover actual costs and needs to be overhauled.

According to the Department of Education, bus drivers in Delaware earn between $13 and $19 per hour while bus drivers for the City of Wilmington earn between $19 and $22 per hour. DOE has requested additional funding for 2023 which would increase driver pay to $20 per hour.

Dr. Dickerson stated at the December 20 board meeting that the district had been able to run all bus routes, something that was a tribute to their contractors and drivers as well as Jon Lobiondo, Transportation Supervisor.

“We just appreciate all of the work they’ve done here to continue our routes, but we are concerned here with the winter months,” Dr. Dickerson said. “We are just making sure we keep ourselves staffed with bus drivers and aides appropriately on the bus.”

Happy New Year!

From: Kathleen Rutherford, Executive Director, A Better Delaware

With a new year here, many of us have made plans for how to make 2022 a better year than 2021. At A Better Delaware we have done the same. This year we will be working harder than ever pursuing our mission of advocating for deregulation, responsible spending, and improved government accountability and transparency. We’ve created a list of resolutions for Delaware’s leadership that will help us fulfill our mission.

More Transparency

Delaware state government tends to minimize or even diminish the role of the citizen in decision-making, to the detriment of its constituency. Without transparency and accountability to influence better decisions, our officials are free to pass legislation to their own benefit, instead of that of its people.

A better way: Allow for maximum transparency by livestreaming the session (even after resuming full-time in-person), allow public access to session, file bills publicly with ample time for public and official review, and no longer pass important pieces of legislation overnight on the final day of session.

Improved Accountability

It seems every week we read new headlines about a Delaware politician engaged in a scandal that puts their own interests above those of the people, often with no consequences.

A better way: Formation of an independent advocate and guardian of legislative ethics in the form of an Office of Legislative Ethics. This commission should be made up of respected members of the community with expertise in law and legislative ethics who volunteer to serve.

End Corporate Welfare

Delaware’s game of corporate welfare is “a hell of an expensive lesson picking winners and losers,” and Delawareans are clearly the losers. Whether it was on the Delaware taxpayer’s dime or through federal relief funds, we saw many shortcomings in 2021.

A better way: Delaware lawmakers and leadership should reconsider their past failings and learn from their mistakes when approaching economic development via corporate incentives. After all, the definition of insanity is doing the same thing repeatedly and expecting a different result. Instead, we must attract businesses by having a better business climate with lower taxes and less regulation.

Develop a Strong Workforce

Delaware is now tied for 33rd overall among states in its unemployment rate, according to the U.S. Bureau of Labor Statistics. This is due in part to Delaware’s ineffective workforce development programing. There are several job training programs that do not connect planning with the training. Therefore, skills provided for professions do not always lead to gainful employment. Lack of information about how to access training is an obstacle for participation. Program evaluation is nonexistent making it impossible to measure performance.

 A better way: Delaware must move from a patchwork of semi-connected programs and services to building out the components of an integrated ecosystem which includes statistical evidence to support investments its workforce system and analysis of workforce training effectiveness, and outcomes. Only then will Delaware improve its standing in business competitiveness and economic growth.

Reform Individual and Corporate Taxes

According to the 2022 State Business Tax Climate Index from the Tax Foundation, Delaware is ranked 50th in the nation for corporate taxes and 44th in the nation for personal income tax. We need to be kinder to our businesses and citizens.

A better way: With $950M surplus in our state’s budget, there should be no tax increases. Rather reduce corporate tax to retain and encourage business development in our state. Lower Delaware’s individual income tax rate and put money back in taxpayers’ pockets. Both tax reductions will encourage economic growth.

This may be a relatively short list in comparison to the many issues we at A Better Delaware see in the First State, but we will continue to tackle every issue that falls under our platform in 2022. We hope you’ll join us.

Our resolution is simple: continue to do what we can to fight for Delaware taxpayers and businesses and make Delaware a better place to live, work, and start or own a business. Happy New Year! We look forward to advocating for and with you in 2022.


State raises budget prediction to include more revenue, $823.8 million surplus

From: Town Square Live   Fueled by stronger than expected corporate and personal income tax, a state committee is now forecasting that Delaware will have an $823.8 million surplus in its 2023 budget.

Michael Houghton, chairman of the Delaware Economic and Financial Advisory Council on Monday called the announcement “almost incomprehensible” after the state needed to inject money into its 2021 budget to cope with COVID-19 and then forecast a nearly $1 billion surplus for the current budget.

Now it has predicted a budget for fiscal year 2023, which starts July 1, of $5.491 billion.

Ultimately, that means the council is forecasting an additional $264.3 million in General Fund revenue that can be spent by the Delaware General Assembly, said Joe Fulgham, spokesman for the House Republicans.

If predictions follow what seem to be current trends, it’s also possible the state budget may cross $6 billion in revenue for the first time.

The council refers to a surplus as “extraordinary revenues.”

Houghton marveled at the outcome.

“To have an $823 million extraordinary revenue number is is almost incomprehensible,” he said. “But I’m sure our friends in the General Assembly and all their wisdom working with the governor’s office determine what will happen with it. I can only pray that what happens is good and thought out and wise, and I say that somewhat tongue in cheek.”

DEFAC meets every few months to track the state’s revenue and spending. When the governor and General Assembly plan their budgets, they base spending on DEFAC’s estimates.

The predictions can change dramatically from meeting to meeting, depending on financial trends.

Many financial experts expected 2021 to be a tough year because federal COVID-19 payments were done, businesses were struggled with workers and COVID-19 restrictions, interest rates were expected to rise and inflation was predicted to take a chunk out of everybody’s bottom line.

Instead, said council member Lindsay Davis Burnham, half of the $123.1 million jump in new revenue came from corporate income tax, 15% from personal income tax, 10% in gross receipts tax and 5% in gambling.

No one is predicting the good fortune will last.

The state has received several large one-time payments from corporations, a few from companies that had never paid taxes before, said David Roose, the director of research and tax policy for the Delaware Department of Finance.

Some of that may be from people paying delayed bills and some from people who anticipated a change in federal tax levels, he said.

“But there have been some other transactions that are clearly extraordinary in nature and won’t be repeated,” he said.

Many are predicting strong bonuses in the financial industry alone, he pointed out. It may be anecdotal, but it gives the state planners reasons to think there won’t be any significant reductions in personal income tax.

Estimates for real estate transfer taxes have risen 33% during the last few meetings.

“There certainly still is support for real estate activity at the current level, even if things are decelerating a little bit,” Roose said.

Roose said other states also have been surprised with strong revenue figures, some of which can be credited to federal COVID-19 numbers. This year the state has been distributing $925 million in American Rescue Plan money, with cities, towns an…d others getting $335 million. It’s about to get $2.4 billion in infrastructure money.

All of that, said Claire Dematteis, special assistant to the governor who is in charge of tracking the spending, will be spent on one-time projects that do not add to the state’s annual budget.

The economy has been much stronger than expected a year ago, said Arsene Aka, economic and fiscal analyst for the Department of Finance.

He said IHS Markit, a forecasting company that advises governments and corporations, estimates a 7% economic expansion in the fourth quarter, which means growth of 5.7% for this fiscal year.

Looking at the Transportation Trust Fund, the numbers show that Interstate 95 is tracking 24% ahead of what it did last year; Route 1 is tracking 12% ahead; and 301 is tracking 39% ahead.

2022 State Business Tax Climate Index

From: The Tax Foundation 

axation is inevitable, but the specifics of a state’s tax structure matter greatly. The measure of total taxes paid is relevant, but other elements of a state tax system can also enhance or harm the competitiveness of a state’s business environment. The State Business Tax Climate Index distills many complex considerations to an easy-to-understand ranking.

The modern market is characterized by mobile capital and labor, with all types of businesses, small and large, tending to locate where they have the greatest competitive advantage. The evidence shows that states with the best tax systems will be the most competitive at attracting new businesses and most effective at generating economic and employment growth. It is true that taxes are but one factor in business decision-making. Other concerns also matter–such as access to raw materials or infrastructure or a skilled labor pool–but a simple, sensible tax system can positively impact business operations with regard to these resources. Furthermore, unlike changes to a state’s health-care, transportation, or education systems, which can take decades to implement, changes to the tax code can quickly improve a state’s business climate.

It is important to remember that even in our global economy, states’ stiffest competition often comes from other states. The Department of Labor reports that most mass job relocations are from one U.S. state to another rather than to a foreign location.[1] Certainly, job creation is rapid overseas, as previously underdeveloped nations enter the world economy, though in the aftermath of federal tax reform, U.S. businesses no longer face the third-highest corporate tax rate in the world, but rather one in line with averages for industrialized nations.[2] State lawmakers are right to be concerned about how their states rank in the global competition for jobs and capital, but they need to be more concerned with companies moving from Detroit, Michigan, to Dayton, Ohio, than from Detroit to New Delhi, India. This means that state lawmakers must be aware of how their states’ business climates match up against their immediate neighbors and to other regional competitor states.

Anecdotes about the impact of state tax systems on business investment are plentiful. In Illinois early last decade, hundreds of millions of dollars of capital investments were delayed when then-Governor Rod Blagojevich (D) proposed a hefty gross receipts tax.[3] Only when the legislature resoundingly defeated the bill did the investment resume. In 2005, California-based Intel decided to build a multibillion-dollar chip-making facility in Arizona due to its favorable corporate income tax system.[4] In 2010, Northrup Grumman chose to move its headquarters to Virginia over Maryland, citing the better business tax climate.[5] In 2015, General Electric and Aetna threatened to decamp from Connecticut if the governor signed a budget that would increase corporate tax burdens, and General Electric actually did so.[6] Anecdotes such as these reinforce what we know from economic theory: taxes matter to businesses, and those places with the most competitive tax systems will reap the benefits of business-friendly tax climates. For the full report click here.