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Blogs and Articles

Regulations: too many to be all good

The original intentions behind regulations were to address market failure, promote economic and social welfare, or advance other goals of policymakers, but even regulations with the best intentions have raised concerns for their unintended consequences. Additionally, many federal and state mandates have been reactive in nature, instead of forming or contributing to a coherent government strategy.

The reach the impact of regulatory bodies has had is immense. Small businesses feel the weight of the regulatory burden at the local, state, and federal levels, massive corporations base location and expansion based on regulations, and the sum total of regulation has led to slowed growth and competitiveness of many countries. Regulations impact a lot.

Take the occupational licensing regs of today. These requirements serve as a barrier to entry into the market, just as they were intended to decades ago as a response to racial or ethnic prejudices. are the legacy of earlier efforts to protect profits by limiting entry to the market. Modern occupational licensing is branded as necessary for quality control, but still works to protect the earning power of established providers. This is harmful to small businesses and entrepreneurs, and has recently been an issue with hair braiding at home.

Remember the EpiPen price scandal? The ridiculous price increase that left many in danger of serious complications from allergic reactions was possible because of regulations. There were few substitutes for EpiPen, which shielded it’s supplier from competition and allowed for a drastic price increase to around $600.

Some regulations and regulatory bodies are good and necessary. But when the Code of Federal Regulations has grown to 175,000 pages, and the small state of Delaware’s regulatory body alone includes 104,562 restrictions and would take 9 weeks to read in its entirety.

In normal times, state and federal government should examine their regulatory body and ask businesses for their perspective. Businesses are beholden to a high standard anyways if they want to keep customers, and too many regulations make it near impossible to make clear their margins, hire workers, or even get started in the first place.

Now, as we recover from the impact COVID-19 has had on our businesses, workers, and economy, our legislators must seriously consider the impact their policy decisions will have on rebuilding what was lost in 2020. In many cases, reducing and eliminating  current regulations that are job killers could help some small businesses endure the crisis. The recovery of small businesses and jobs will spawn economic growth and a healthy job market.

Below is a list of some examples of just the regulatory bodies that have an impact on this massive regulatory burden on businesses. Keep in mind that this is not a comprehensive list, and that every entity on the list issues and enforces their own regulations. Each one is another weight on the shoulders of entrepreneurs and business owners, and not all are necessary to ensure a safe and productive market. This does not include county and city regulations that are enacted in addition to those put forth by these entities.

Federal:

  • Federal Trade Commission (FTC)
  • Environmental Protection Agency (EPA)
  • Occupational Safety and Health Administration (OSHA)
  • National Institute for Occupational Safety and Health (NIOSH)
  • Internal Revenue Service
  • Social Security Administration
  • Defense Department
  • Centers for Medicare and Medicaid Services
  • Federal Energy Regulatory Commission
  • Consumer Product Safety Commission (CPSC)
  • Equal Employment Opportunity Commission (EEOC)
  • Federal Aviation Administration (FAA)
  • Federal Communications Commission (FCC)
  • Federal Deposit Insurance Corporation (FDIC)
  • Federal Reserve System (the FED)
  • Food and Drug Administration (FDA)
  • Interstate Commerce Commission (ICC)
  • National Labor Relations Board (NLRB)
  • Nuclear Regulatory Commission (NRC)
  • Securities and Exchange Commission (SEC)
  • Fair Labor Standards Act (FLSA)
  • The Employee Retirement Income Security Act (ERISA)

Delaware:

  • State Insurance Commissioner
  • State Bank Commissioner
  • Public Service Commission
  • Department of Labor (DOL)
  • Department of Natural Resources and Environmental Control (DNREC)
  • Safety and Homeland Security
    • Alcohol Beverage Control Commission
    • Office of Highway Safety
  • Merit Employee Relations Board
  • Public Employment Relations Board
  • Agricultural Lands Preservation Foundation
  • Food Product Inspection
  • Forest Service
  • Harness Racing Commission
  • Thoroughbred Racing Commission
  • Cash Management Policy Board
  • Delaware Health Care Commission
  • Delaware Manufactured Home Relocation Authority
  • Board of Manufactured Homes Installation
  • Delaware River Basin Commission
  • Delaware Solid Waste Authority
  • Professional Standards Board
  • Delaware Economic Development Authority
  • Division of Public Health
  • Fraud and Consumer Protection Division
  • Board of Cosmetology and Barbering
  • Human Relations Commission
  • State Fire Prevention Commission
  • Division of Motor Vehicles
  • Various professional boards

Pro-worker mandates actually hurt workers

All policy—economic or social, conservative or liberal—has unintended consequences. Good policy would minimize the negative effects of the measure while best targeting the problem that is being addressed. When it comes to business-related legislation, we are far from good policy.

Take employer mandates like paid family leave and increased minimum wage for example. Both efforts seek to tackle an issue head on, and are branded as “pro-worker” legislation. In an isolated bubble, this may be true. However, in the real world, pro-worker measures inflict more damage than that they seek to heal.

If paid family leave looks to provide a better work life balance and support to families, then why is it ignored that the current proposals would result in smaller wages, layoffs, or impact social security? These side effects are pretty harmful to workers and their families as well.

Look at minimum wage. The entire argument in support of $15 per hour is based on the need for a livable wage for these workers. But what happens when their employer cannot afford the cost increase, and cannot raise their prices high enough to make up for it? Instead of a $15 hourly wage, many workers will be left with no hourly wage when they are laid off to accommodate the mandate. Zero dollars is certainly not a livable wage.

Video: What’s Killing the American Dream? from PragerU

Legislation and regulations that are anti-business are blatantly anti-worker and anti-jobs.

Small businesses are vastly important to the American and Delaware economy. Such critical establishments should be supported by their representatives, but unfortunately are not. In fact, it’s the opposite. Government regulation is killing small businesses—and killing the jobs they create as well.

Putting social goals over profits is misleading. Traditional profit-seeking entrepreneurship has benefits that span community, socio-economic status, race, and gender. Suppressing these profits will in turn suppress the benefits they provide to overall society.

Increases in regulatory restrictions are associated with declines in lower- and middle-skilled jobs, lower wages, reduced hours, layoffs. None of those things are pro-worker.

In a better informed government that weighed the consequences of feel good legislation, lawmakers would work across the aisle to support bills that actually promote job growth, support businesses, and strengthen the economy. This new approach would mean that our elected officials work for the people, instead of duping them.

The next time you hear a lawmaker, party representative, colleague, or friend denounce a pro-business policy for being anti-worker or for putting business over the people, consider how a business can support its workers when their operations take a hit, and why both sides can’t align on this issue.

Killing jobs and cutting wages does not help workers

If Delaware wants to understand the ramifications of various employer mandates featured on many platforms this election season, they can look north to Connecticut. Connecticut’s proposed bills in 2018 included family and medical leave, expanded paid sick leave, and minimum wage hikes. The implementation and compliance costs of these mandates to taxpayers and businesses were estimated to be up to $530 million.

Connecticut Business and Industry Association President and CEO Joe Brennan expressed concern that long term talks about the difficulty of having one-size-fits-all mandates on employers applied to these bills as well. Added costs and administrative burdens expected to accompany these and similar measures are bad news for an economy as businesses will be forced to lower wages or cut jobs entirely.

You hear people ask, “Why not mandate that employers can’t do these harmful things?” Unfortunately, these things cost money that has to come from somewhere. Businesses are experts in finding ways to be able to stay afloat and keep their doors open and will have no option but to make cuts if saddled with these costs.

Connecticut’s paid leave benefits were set to be funded by mandatory deductions from employee wages, exchanging income for benefits. On top of this, taxpayers would fork over $18.6 million annually to administer these plans. The costs impact more than just the employees and tax payers: businesses’ bottom lines will be impacted, especially for companies that are operating on very small profit margins, like small businesses.

So what can businesses do?

The easy answer is to cut wages or cut jobs to make up the additional costs. Automation is rapidly expanding in the business world, and is a cheaper option in the long term to having increasingly expensive, and often unreliable, human labor. Robots could occupy 38% of jobs in the U.S. economy by 2030, and boost productivity, manage labor costs and improve operational predictability for large and small businesses. Small businesses like transportation and storage, manufacturing, retail and other industries, are the most likely to adopt these changes in the near-term. They’re also the ones who will be hardest hit by the proposed employer mandates.

In addition to or to avoid layoffs or automation, businesses could also raise prices to pass the cost onto the consumer. In this instance, the business still faces higher costs, but now the tax payer is paying twice to fund these mandates. If the costs become too high and sales suffer, layoffs are back on the table.

You can’t force a company to hire associates but you can certainly force them out of a burdensome state or country they can no longer afford to operate in—and they’ll take their jobs with them.

When our workers, small businesses, and overall economy are already struggling to get back on their feet after COVID, anything that could provide such widespread damage should be off the table. The 2021 Legislative Session should focus on helping Delaware workers and businesses, not forcing them into unemployment and bankruptcy. This election will determine if our workers and businesses can recover, or if costly and burdensome mandates will cause more job loss and small business struggle. Delawareans must make the best choice for the future this November.

Employer mandates: mandating job and income loss

Paid leave and similar employer mandate policies have risen in popularity over the past few years, and really came to the forefront during the coronavirus pandemic. On the surface, these measures will help workers (especially low and middle class) provide for and tend to their families. In reality, they will hurt businesses, cost jobs, and lead to lower wages.

An alternative option would be to allow the private sector to come together to either establish insurance plans that would cover short-term disability or paid family leave plans or allowing lower-income hourly workers to choose if they would want to convert overtime pay to paid leave. If we want to help workers, we should do so in a way that actually helps them.

Especially now, as businesses are struggling to recover from the economic crisis that accompanied the COVID-19 pandemic, employers cannot afford this burden. Losing your job is worse for a worker than losing a paycheck from not having paid sick leave or a paid family leave mandate.

Unfortunately, these platforms leave out a very important part of these types of mandates: the costs that will be placed on employers will end up hurting the very people they are seeking to help. Economic analysis and economists—both liberal and conservative—agree that the main people who pay for employer mandates are employees.

The cost of the health care provided to the employee does not result in more productivity or value of that employee at their firm. By adding this cost, it is more likely that incomes will be lowered in order for the total value of the employee to remain the same, even with additional costly mandates. Sometimes, the cost of these mandates results in layoffs so that the company can afford to provide them to the remaining employees.

So why do politicians who claim to advocate for workers support ideas that will hurt them? Well, it’s easy to support something that sounds good and has hidden consequences and costs.

For low income workers, employer mandates like health insurance mean far higher costs for the employer and a higher likelihood of layoffs. Since people cannot be paid less than minimum wage, the higher costs are forced onto employers who will have to adjust for these costs by laying off workers or cutting hours.

In a 2019 New Hampshire bill to implement a government-administered paid family leave program, a new tax was included to help cover the costs of the mandate. However, the tax that would cost the average worker an extra $267 per year only covered one fifth of the cost of the mandate. In this instance, employees would lose earning from both the tax and whatever cost-cutting measures their employer would be forced to take.

The costs aren’t just monetary.

If an employer has two applicants for a job and one appears more likely to take advantage of a mandate like parental leave (young, female), it might reduce the employer’s willingness to hire that person. Hiring a young woman then becomes a cost burden that an employer may not be willing to take on. In turn, this mandate intended to provide a benefit ends up leading to discriminatory hiring practices and higher unemployment in a new group.

When making decisions that impact businesses, lets allow businesses to contribute ideas for better solutions that benefit employers and employees alike. The government is not the answer to every question.

From ABD Founder: Founding A Better Delaware

From The Sword in the Stone Blog

by ABD Founder, Chris Kenny

With my decades long involvement in civic issues affecting Delaware and a constantly growing, deep understanding of their viable solutions, the question became how to use that foundation of knowledge to help improve the state’s concerns that have risen to a critical level. That is what has led me to my next chapter: creating A Better Delaware, our pro-growth, pro-business advocacy group.

One year ago I founded A Better Delaware, a non-partisan grassroots organization to advocate for pro-growth, pro-business policies and greater transparency in government. Now more than ever we need a collective effort to promote policies that will grow our economy, spur sustainable investments and create jobs. Our group routinely communicates key issues in Delaware policy, and here are some very startling facts about the Delaware economy:

With these realities harming Delaware’s growth and success, my statement on A Better Delaware’s official launch last year rings true now more than ever:

“I speak with employers and workers every day who share my concern about Delaware’s business climate and our competitiveness with other states. Too many politicians in Dover are out of touch with the realities of starting and operating a business, and what it takes to create good jobs.”

Our non-partisan group offers year-round communication to promote policies benefiting Delaware’s economy, and our grassroots success is evidenced in our group’s engaged online community (click here to visit our Facebook page). Almost 10,000 followers, over 13,000 email subscribers, and over a dozen distinct advocacy campaigns later, A Better Delaware celebrates one year of working with and for the Delaware people.

In addition to the ABD group, this year we have launched A Better Delaware’s PAC. To supplement our group’s efforts, the A Better Delaware PAC was created to apply the necessary pressure to affect political change and educate our state legislators. The ABD PAC will offer significant support for specific candidates who mirror our group’s pro-growth, pro-Delaware policy goals. As this year’s election cycle culminates with important elections at the local, state and federal level, the creation of our political action committee will allow us to make real change when it is needed most.

We will continue to attack the issues at all levels from the grassroots community level to holding our state’s politicians and policymakers accountable. I explained the need for transparency at all leadership levels at ABD’s founding:

“A major reason Delaware is losing ground is because few are holding the politicians accountable. A Better Delaware will make sure taxpayers understand what is at stake and who in Dover is working for them.”

OUR GOVERNMENT OPERATES BEST WHEN THERE IS AN EFFECTIVE SYSTEM OF CHECKS AND BALANCES IN PLACE. OUR GROUP WILL SERVE THAT GOAL.

A Better Delaware and the A Better Delaware PAC were created to provide educational communication informing our community and voters on the issues and policies that will most benefit our state and economy. This project will be an ongoing conversation around policy changes that will benefit our state. As for my personal political aspirations? That’s a topic I’ve been asked about quite a lot recently. My answer? I’ll save that for the next post.

A Better Delaware celebrates one year

A Better Delaware celebrates one year today!

A weakened economy, poor business climate, high tax rates, and questionable practices in state governance all lead to the decision to form an issue advocacy organization that would work for Delaware taxpayers and businesses. One year ago today, A Better Delaware was finally launched to the public to tackle these issues.

“Delaware needed to tackle these issues and since lawmakers and leadership in the state weren’t making the effort, Chris Kenny and Ben duPont did. Thanks to them, every day I get to wake up and work to make my home state a better place.” — Zoe Callaway, Executive Director

When we launched on September 17, 2019, we were ready to fight for you. The response we received after launch let us know that Delaware was ready too, and thankful for our presence and advocacy. You let us know that you too are tired of the over taxation and regulation, the back room deals in Dover, and being left behind by your elected officials.

Facebook recommendations and messages, emails, phone calls, and more started to come in that thanked us for what we were doing and encouraged us to keep on, so we did. We ramped it up with a weekly blog, A Better Discussion webinars, and professional videos addressing key issues in the state. Our public advocacy campaigns, where constituents had an outlet to speak out against bad legislation directly with their legislators, resulted in hundreds of emails sent during the 2020 Legislative Session.

“The Delaware Small Business Chamber is not a political chamber but we advocate for issues that affect the Small Business Community and we think A Better Delaware is helping to make Delaware a more small business friendly state. Congratulations on one year.” — Bob Older, Founder and President of the Delaware Small Business Chamber

That wasn’t enough for us. We came to fight for you, and that meant helping keep Dover business and taxpayer friendly. Last month, ABD formed a PAC to begin electioneering in order to expand our cause.

A Better Delaware has done a lot to advocate for you, but we could not have done it without you. Your support and willingness to share ABD and our message has really resonated and has allowed us to do everything that we have so far.

“For our inaugural year, we are very fortunate to have our Executive Director Zoe Callaway as the heart and soul of ABD working tirelessly everyday researching, writing, posting, calling and discussing the mission critical issues for all Delawareans.” — Chris Kenny, Founder and Co-Chairman

Almost 10,000 followers, over 13,000 email subscribers, and over a dozen distinct advocacy campaigns later, A Better Delaware celebrates one year of working with and for you.

What does the next year hold? We hope you’ll stick with us to find out! For now, we continue to work to improve the following statistics:

Delaware deserves better. Together, let’s make A Better Delaware.

Stop the Reverse Revolving Door

Texas limits two groups of people from running for public office: felons and the mentally incapacitated. In 2017, the state considered making an interesting addition to that list when a bill arose that would prevent lobbyists from being able to run for public office.

At first glance, it may seem excessive to group lobbyists with felons and people with mental handicaps, but the measure had great intentions and some precedent.

The precedent here comes from major concern with the “revolving door” of politics at state and federal levels. The revolving door is when legislators move into lobbying or similar state-related positions after retiring from office. Critics of this practice cite major concerns surrounding government accountability and trust in government.

Those at the end of their time in office who are eyeing a lobbying role are more likely to be influenced by the company or interests that the will shortly advocate for, leaving the public at a serious disadvantage. Once in these lucrative, private sector positions, former lawmakers have inside connections and relationships with those they will now stand in front of, on behalf of special interests.

Federal actions to prevent the revolving door have not been successful, and neither have similar measures in Delaware. When state senate leader Patty Blevins (D—Elsmere) lost her re-election in 2016, her new position with the Division of Public Health seemed to be in violation of state rules against revolving door type activities, included in the ethics portion of the Delaware Code.

So, when a lobbyist decides to run for office, these concerns remain. This process is known as the “reverse revolving door,” and is still a breach of trust in government and weakens government accountability.

A South Dakota lobbyist-turned-Congressman came under fire for adding language in a bill that helped his former employer. The same can be expected at the state level, and may be easier to prevent.

Delaware can either be more susceptible to this problem, or can do better to prevent it. In a state where everyone knows everyone, interests are bound to get tied up, but we do not have to blatantly allow for special interests to enter the legislative process and pass bills in favor of their friends or former employers. Delaware does however have the framework in a forgotten set of ethics guidelines that could be applied to and enforced with the reverse revolving door.

We already struggle with transparency and accountability in this state. We must do better.

Delaware should move to end the revolving door of politics and be an example to the nation. Until then, the people should consider the implications of electing former lobbyists to office and the impact this will have on the future of lawmaking in the First State.

Delawareans have a choice: taxed to death or death to burdensome taxes

Only two things in life are certain: death and taxes. For Delawareans, this isn’t just an old adage, but real life.

Without caution from the people, this will not stop. Only the limited balance in the Delaware senate is currently keeping things in check—but only a little. Delaware’s tax increases over the last two General Assemblies (2016-2018, 2018-2020) were the 6th highest in the nation.

Delaware’s has the highest per capita revenue from corporate license fees and the fifth-highest per capita corporate income tax revenue. Corporate license fees accounted for 12.8 percent of Delaware’s state and local general revenue in 2017 (for comparison, the national average was 0.2 percent), but we risk losing this source of funding if we force businesses to incorporate out of state.

You’ll hear many people tout Delaware’s status as a “tax-free” state, but that simply is not the case. Yes, Delaware does not have the sales tax, but we more than make up for that. Take for example the reason why we are able to avoid having a sales tax: the gross receipts tax.

Delaware is one of only seven states with a gross receipts tax. These invisible sales taxes raise prices as these taxes are shifted onto consumers, and tend to impact lower incomes the most. Moving away from these economically damaging taxes can thus be a part of states’ plans for economic recovery.

As if that wasn’t enough, the state’s individual income tax burden is on the top half of the nation, with one of the highest individual income taxes. This has been an ongoing issue, but the impact of this tax will be felt harder as we continue operating under a COVID emergency order that has wrecked our economy.

Since 2016, Governor Carney approved large tax increases but he did not work alone. The taxes started as bills heard and voted on in Dover that were approved for his final vote.

These bills raised corporate franchise taxes, realty transfer taxes, alcohol taxes, and cigarette taxes. Delaware now has the highest real estate transfer tax in the nation and some of this highest excise taxes among all fifty states.

These tax increases were estimated to raise more than $200 million annually, the exact amount the state claimed was a “surplus” less than one year ago.Over-taxing residents is not a surplus or a celebration to commemorate with additional spending.

Have these measures even been worth it?

No. Delawareans get very little bang for their buck. Our taxpayer return on investment (ROI) is near the bottom nationally, despite having some of the highest taxes per capita. We spend more on education and health care than most other states, yet continue to see outcomes that put us in the bottom of national ranks.

Our representatives are not representing our best interests when they continuously raise taxes, taking money away from hard working Delawareans. The results speak for themselves, and what they’re saying is that it is time to change what we’ve been doing.

In November, Delawareans have a choice: taxed to death or death to burdensome taxes.

Say No to Delaware’s Status Quo

Delaware: banks, beaches, Biden. We’re the First State and the Diamond State—a small wonder. We are known by and for many things, but home means something different to everyone.

Delawareans take a lot of pride in our little state, and so do we at A Better Delaware. That is why we are working to improve the state for every Delawarean, and for our future.

Delaware is 34th nationally in the Best States to Live In report from WalletHub. A lot of things factor into that position.

Delaware’s quality of life ranked low at 47th nationally, based on indicators like the average commute time, access to public transportation, and more. The same report had Delaware’s economy at 38th, based on the unemployment rate, general tax-friendliness, entrepreneurial activity, and more.

Delaware has room for improvement on all of these indicators.

Improving these issues, either through legislative or regulatory change, would have a massive impact on the state. Not only would it be better for Delawareans to see these changes, but these measures would help to attract businesses into the state as well. Right now, Delaware plays a costly game of corporate welfare at the taxpayer’s expense, despite that being at the bottom of the listof what businesses look for when selected a location.

We consistently rank poorly nationally for unemployment, and are currently 36th for July 2020. There’s no amount of money that can be given to a corporation to hide our shortcomings in these important areas.

Even if a business does select Delaware, are we attracting workers?

Delaware ranks 29th overall for its affordability, and is even lower for its cost of living and housing affordability. That’s quite unattractive for prospective residents. We have one of the highest income taxes and Delaware’s real estate transfer tax being one of the highest in the nation. Even if we attract businesses and worker to the state, the extra thousands involved in buying a home may make the workers second-guess their decision.

It’s issues like this that need to be fixed in order to make our home a great place to be. Education, quality of the job market, a trained workforce and so much more are the key to improving Delaware.

Currently, our representatives and leaders are not working to truly improve Delaware. Every action seems like a band aid for a bullet wound, and Delawareans are tired of seeing their state crumble because of it.

Now is the time to critically think about the decisions that have been made in Dover, who is making them, and why. The 2021 Legislative Session could be the one to solidify these national standings and push us further down the path of our status quo, or could be the one that makes a decisive change that could put the First State back on top.

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.”