Blogs and Articles

Why the EV Mandate May Occur One Way or Another

From; Ethan Lang, Executive Director

In May, the Division of Air Quality of DNREC conducted statewide hearings to discuss its ban on new internal combustion vehicles by 2035. That discussion became rather heated in town halls across the state, with citizens on both sides expressing strong views.

But despite what has been said about this issue, the electric vehicle (EV) mandate IS being forced by the effort to reduce carbon dioxide emissions.  Most people do not realize that because of this irrational focus on reducing carbon dioxide emissions, Delaware may get an electric vehicle mandate regardless of Secretary Garvin’s decision and on a timescale much faster than in 2035. Let me explain.

Like other states, Delaware can adhere to regulations set forth by the EPA or adopt more stringent standards set forth by the California Air Resources Board (CARB). States may not develop their own regulations. Generally, northeastern and northwestern states adopt the CARB standards.

While the original proposition of the EV mandate was couched as an ozone-reduction measure, California notes clearly that one of the primary goals was to reduce carbon dioxide emissions. The press release by CARB^[1] noted that:

“Transportation is the single largest source of global warming emissions and air pollution in the state … In 2040, greenhouse gas emissions from cars, pickups, and SUVs are cut in half, and from 2026 through 2040 the regulation cuts climate-warming pollution from those vehicles a cumulative total of 395 million metric tons. That is equivalent to avoiding the greenhouse gases produced from the combustion of 915 million barrels of petroleum.”

Indeed, Governor Carney’s State of the State Address[2] tied Delaware’s EV focus to climate change – “The effects of climate change and sea level rise on Delaware communities are real. We see them every day. That is why we need to act. With the help of federal infrastructure funding, we will accelerate efforts to build out Delaware’s electric vehicle charging infrastructure.”

Why this is important is that the Delaware Climate Change Solutions Act[3] “establishes a statutory requirement of greenhouse gas emissions reductions over the medium and long term to mitigate the adverse effects of climate change due to anthropogenic greenhouse gas emissions on the State … and requires State agencies to address climate change in decision-making and rulemaking.”  This bill was introduced into the State legislature on June 2, 2022, and passed the State Senate by a vote of 13-to-6 (with one abstention and one absentee). It was tabled in the House to allow businesses to evaluate its potential impact. This Act was reintroduced during this session as House Bill 99 and will require the electric vehicle mandate to be implemented. It passed the House on June 6 and now awaits a vote by the Senate.

But surprisingly, the Act states, “the State shall implement greenhouse gas emissions reduction strategies to ensure that, no later than January 1, 2030, statewide greenhouse gas emissions on a net basis shall be reduced by not less than 50% from a 2005 baseline” (emphasis added). That is less than seven years from now and requires us to cut emissions by at least half. As CARB¹ noted, “transportation is responsible for approximately 50% of greenhouse gas emissions (when accounting for fuel production emissions) … in California.”  There is no way such a bill could go into action without addressing the carbon dioxide emissions from the transportation sector. Thus, the State legislature may enact a more draconian EV mandate even if Secretary Garvin decides against it.

But the possibilities for the enaction of the EV mandate continue beyond here. The New York Times^[4] (and other news outlets) reported that the EPA might propose an ambitious, almost innocuous climate regulation like the CARB standard. CARB proposed that 68% of all new car sales would be EVs by 2030; the new EPA rule would require two-thirds by 2032. Remember that Delaware has a choice – the EPA rule or the CARB rule – we cannot make up our own rules. If the EPA goes forward with its rule, the EV mandate is a fait accompli; the only question is how fast it will be implemented.

Note that none of these rules can mandate EV sales. But the Clean Air Act limits the pollution generated by the cars sold by each automobile manufacturer, with substantial fines and penalties levied against companies that fail to comply. These limits are so stringent that automobile manufacturers must sell a certain percentage of EVs to comply with the rule. Thus, while EV sales cannot be mandated directly, forcing automobile manufacturers to comply with pollution levels generated by the new cars they sell dictates the proportion of EVs sold.

So, our solution is not just to petition Secretary Garvin to reject the EV mandate. Many of those in opposition to the mandate have noted that it is being forced on us by non-elected officials, with the tacit assumption that it would be acceptable if elected officials voted for it. But the passage of the Delaware Climate Change Solutions Act will require a vote by our elected officials. Thus, concerned citizens must tell all our elected officials – in the Governor’s Office, the State Senate, and the Delaware General Assembly, as well as in Washington DC – how they feel. Otherwise, we will be forced to pay more for electric vehicles, both in initial and operating costs, all while being stripped of choice.

Is A Little Bit More Enough?

From: Kathleen Rutherford, Executive Director, A Better Delaware 

When John D. Rockefeller, once the richest man in the world, was asked by a reporter how much money is enough, he responded: “Just a little bit more.”

Rockefeller’s sentiment is one evidently shared by the Delaware state government under Gov. John Carney’s leadership, something he affirmed on Jan. 26 while presenting his record $5.48 billion proposed Fiscal Year 2024 budget.  While there where some highlights to his presentation, Governor Carney’s budget proposal missed the mark on providing practical common-sense solutions to our states most concerning issues.

Fiscal Responsibility

Gov. Carney Carney’s budget maintains the state’s untapped $316 million “rainy day fund,” and has directed nearly $19 million into a separate “budget stabilization” reserve fund. This leaves $421.5 million sitting in a bank account, essentially, available to use only if the state falls on hard times. The fiscal responsibility of building the state’s savings account is worthy of applause but ignores the elephant in the room: our states ballooning pension debt. This year  a proposal to allocate $51M to pay down Delaware’s  public pension debt, while the current debt is $8.9 Billion. Delaware’s financial problems stem mostly from unfunded retirement obligations, (it only had seven cents for every dollar of promised retiree health care benefits.)  A Better Delaware recommends significantly paying down Delaware’s public pension debt and reducing new state worker retiree health and pension programs, so that future taxpayers will not be burdened with paying the under-funded retirement promises.

 Taxes and Spending

To the governor’s credit, Carney’s budget reduces the effective tax burden on lower-income earners by increasing the state’s standard deduction from $3,250 to $5,700, a 75% jump. It also will increase the amount of refunded tax for those who meet federal Earned Income Tax Credit requirements to 7.5%. Those moves should provide some relief for struggling Delawareans, but the budget proposal fails to enact the type of long-term, meaningful tax cuts that would unleash the state’s economic potential.

According to The Tax Foundation’s State Business Tax Climate Index, Delaware ranks as having the 44th highest individual income tax burden in the nation. It leads the country with the highest corporate tax, and at 4%, Delaware’s realty transfer tax is the highest in the nation.

In a recent position piece, A Better Delaware outlined its legislative priorities, which include cutting the regressive gross receipts tax, reducing individual income taxes, slashing the realty transfer tax and lowering the corporate tax. Rather than celebrating the largest budget in state history, elected leaders should be asking why now isn’t as good a time as ever to make Delaware a more affordable place to live, work and do business.

Health Care

Carney’s budget proposal doesn’t call for any of the things most likely to reduce health care costs for Delawareans: reforms to the state’s Health Commission and Health Resources Board, the repeal of cumbersome Certificate of Need (CON) laws, nor expanding options for out-of-state health insurance plans.

Delaware ranks fifth highest in the nation for health care costs per capita. In 2020, 10.1% of Delaware adults chose not to see a doctor because of costs. The state Health Commission’s Health Resources Board, as designed, prevents and discourages health care providers from entering or expanding in Delaware due to onerous CON laws. These laws stifle competition, reduce access to care and promote monopolies.

Carney’s budget proposal should come alongside demands to audit Delaware’s Medicaid system for fraud and abuse, phase out the Health Resources Board, eliminate CON laws, and increase access to care, competition and choice. In its current form, the budget won’t do anything to alleviate these issues. The General Assembly must consider alternatives before approving Carney’s proposal.

 Education

Carney’s budget offers 9% pay raises for teachers and 3% raises for other public-school employees, as well as $53 million in “Opportunity Funding” for students with disabilities, low-income students and those whose first language is not English. This proposal follows a disturbing trend: As Delaware’s education spending grows, students’ test scores fall. That’s because throwing money at a problem doesn’t make it go away.

In 2022, Delaware ranked 47th in educational performance out of 50 states when combining the rankings in both math and reading for fourth and eighth graders. That’s despite spending more per-pupil than the other 41 states.

In light of the state’s teacher shortage, Delaware should expand pathways to becoming a teacher, accept out-of-state certifications and ease restrictions on educator licensing. The governor’s budget doesn’t call for any of that.

Also absent in the Governor’s proposal was support for school choice expansion. Expansion in the form of education savings accounts (ESA’s) and tax credit scholarships would give parents the financial freedom to choose where their kids go to school and create healthy competition in the education marketplace.

 Accountability and Transparency

This year the Bond and Capital Improvements Act totals $1.289 billion. That’s $1B in cash to the Bond Bill – up $150M from last year. It is the 5th “one-time” supplemental bill which is another 5.9% growth of overall spending. How much is sitting unspent? So why then, did Gov. Carney not include funding for oversight of the largest budget in our state’s history?

A Better Delaware recommends funding for the formation of a nonpartisan Office of Legislative Ethics and independent Inspector General’s office — ideas that nearly came to fruition in the last General Assembly. Neither does the budget include any funds to reform Delaware’s antiquated and toothless Freedom of Information Act, from which lawmakers have exempted their own communications. These offices would ensure accountability from our elected officials and state offices and give citizens recourse when they witness or fall victim to waste, fraud, abuse, or misconduct.

Workforce Development

Gov. Carney signed into law a bill that will increase Delaware’s unemployment benefit one day after announcing a whopping $46.6M investment for workforce development. Carney stated in his budget address that in Delaware “thousands more job openings than we have people looking for work.” Why then, make it attractive to not apply for a job? A Better Delaware believes that by tightening unemployment benefit requirements to have applicants prove that they are seeking work and showing up for job interviews will help in decreasing our states workforce shortage.

  The governor’s budget does nothing to reform burdensome business regulations, reduce occupational licensing fees, or increase apprenticeship ratios. Occupational licensing fees, which require trained professionals to pay for the privilege to work, particularly impact lower-income Delawareans. Those who can least afford it are shut out of job opportunities by costly regulations. Apprenticeship ratios, which often require three or even four journeypersons for each apprentice, restrict employers from creating opportunities for young tradespeople, crippling their ability to fill jobs that so many Delawareans need. If the governor was truly committed to workforce development, addressing these barriers to entry would have been highlighted as a priority in his budget proposal.

According to a study by Mercatus, Delaware is has the 2^nd most regulations per capita in the region.  Before passing the budget, the General Assembly should insist on a framework to reduce overburdensome, antiquated regulations. Reducing the number of regulations would refocus Delaware’s government on the issues that matter while also unleashing the job creating power of small businesses.

 Energy and Climate

One and a half years after allocating some $80 million to a Clean Water Trust Fund which hasn’t since completed a single project (or started more than one, for that matter), Carney proposed an additional $26.2 million for the fund, to be administered in large part by the notoriously opaque Department of Natural Resources and Environmental Control. Before this money is allocated, there needs to be a serious inquiry into the efficiency and transparency of the Clean Water Trust.

The Trust was pitched to the General Assembly on the promise that it would not run out of funds or require new legislation to replenish its war chest because it would be replenished year after year by interest from project loans. With no projects to point to, the Trust is far from self-sustaining. The General Assembly must take a hard look at this before authorizing additional funds.

Additionally, as the state moves toward a near-total ban of new gas-powered vehicles by 2035 (and without approval by the legislature), the governor’s budget proposal includes $57 million for EV infrastructure and other associated projects. Rather than allowing the free market to drive this technological “advancement,” Carney has signaled his intention to spend an ever-ballooning amount of taxpayer dollars to subsidize an initiative with questionable environmental benefits.

The General Assembly should assert its right to weigh in on the gas-powered vehicle ban and offshore wind projects by rejecting any budget that authorizes the spending of state funds on these initiatives without legislative consent. In this budget, lawmakers can assert their power over runaway executive agencies. In addition, establishment of an independent Energy Advisory Council is needed to establish a realistic state energy plan to be approved by the Delaware legislature.

With unprecedented Federal and State funds flowing through Delaware, Dover has a unique and historic opportunity to lead in the moderation of the governments overall share and control of those citizen taxpayer dollars.

Now is the time to ensure more access and freedom of those dollars go to the individuals and businesses permitting them to choose where it is most productive with less mandates and restrictions. All the while ensuring all the branches of governments portions are openly, rigorously, and independently reviewed to eliminate waste, fraud, and abuse at each level.

The Hon. William L. Witham, Jr. Joins A Better Delaware as Advisory Board Member

FOR IMMEDIATE RELEASE  

January 13, 2023

DOVER, Del.– The Honorable William L.  Witham, Jr. 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 welcomed Judge Witham to the Board saying, “As a former leader in the US Army Reserve and National Guard. with 34 years of service, “Judge Witham is an exemplary jurist who has served our state with distinction. “He brings a wealth of experience in administrative leadership which will provide ABD clarity in assessing efficiency in state executive departments.”

“As a life-long advocate and advisor in veterans’ affairs, I look forward to being instrumental in advising ABD how best to improve the quality of life for Delaware’s 70,000 active-duty military and veterans,” said Witham.

Witham 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. “Judge Bill Witham is an extraordinary addition to A Better Delaware. Not only is he a man of great personal principles and ethics, as one would expect of a Delaware judge, but he and I together share a passion for the importance of national character and committed, as embodied in service in the US military. Bill and I each are veterans who remain committed to the principles of Citizenship with Service,” said Waltz.

Recently retired, Witham has served over 40 years in Delaware’s justice system. He first joined the bench as an associate judge of the Delaware Superior Court in 1999.  In 2005, he was appointed Kent County Resident Judge by Governor Ruth Ann Minner and re-appointed in 2017 by Governor John Carney.  

 Utilizing 34 years of service in the Delaware National Guard including Deputy Commander of the Delaware Army National Guard and his experience on the bench he instituted Delaware’s first Veterans Treatment Court in 2011. This court provides a therapeutic approach to criminal prosecution of veterans with mental illness who are charged with nonviolent felonies and misdemeanor crimes away from jail and into rehabilitative programs.  He is also a frequent speaker on the issues of veterans involved in the criminal justice system on a state and national level.

“Judge Witham brings to A Better Delaware a wealth of knowledge in veteran’s affairs which will be an invaluable resource as we advocate for the elimination of income tax for active military retired during this legislative session.”- Kathleen Rutherford, Executive Director of A Better Delaware.

New Year, New Possibilities for Delaware!

From: Kathleen Rutherford, Executive Director, A Better Delaware

WILMINGTON, Del. — As we look forward to ushering in the new year, the team at A Better Delaware has been hard at work developing our 2023 New Year’s resolutions. There’s a lot of work to be done to create an environment where Delawareans and their businesses can thrive — but with a new year comes new opportunity, and we’re excited to lead the fight in 2023 for A Better Delaware.

Better Health Policy

To create A Better Delaware, we need smarter health care policy that puts patients first and removes barriers to access that impede innovation and increase costs. Delaware ranks 5th highest in the nation for health care costs per capita. According to Forbes, 10.1% of Delaware adults chose not to see a doctor in 2020 because of costs. One recent study shows that Delaware has the second-longest emergency room wait time in the country at 195 minutes. Certificate of Need (CON) laws, which require health care organization to seek permission from the state prior to making acquisitions, expansions, or creations of new healthcare facilities, hinder growth, limit capacity and raise costs on consumers. States subject to CON laws suffer an average of five percent higher spending for physician care.

In 2023, A Better Delaware will advocate for reforming the Health Commission, the Health Resources Board, and all CON laws in the state. Such a change would drive down costs to both consumers and health care providers and increase access to affordable healthcare in Delaware. We’ll also encourage the state to enforce existing regulations requiring hospital billing price transparency and expand options for health insurance plans by including plans offered across state lines that include essential health benefits.

Better Tax Policy

While Delaware has built a global reputation as a business-oriented state, it’s still one of a few states to employ the harmful and costly gross receipts tax. The state taxes products at each step of the supply chain rather than at the point of sale, which is why many refer to it as Delaware’s “hidden sales tax.” The gross receipts tax causes prices to soar, harming businesses and consumers alike. That isn’t the only burdensome tax that makes Delaware an expensive place to live and do business. According to The Tax Foundation’s State Business Tax Climate Index, Delaware ranks as having the 44th highest individual income tax burden in the nation and leads the country with the highest corporate tax. At 4%, Delaware’s realty transfer tax remains the highest in nation. Recent attempts in the legislature to reduce the realty transfer tax, individual income taxes, and corporate taxes have stalled.

In 2023, A Better Delaware will advocate to reduce the gross receipts tax to improve business competitiveness and grow local employment, use record surpluses to give individuals relief on their individual income taxes and unleash private investment in the economy, and reduce the realty transfer tax and corporate tax rate.

Better Government Accountability and Transparency

Delaware has a serious problem with accountability and transparency, as noted by The Center of Public Integrity, which ranks Delaware 48th in the nation for transparency with a score of “F.” In 2021, a bill proposed in the state Senate would have granted public bodies the power to deny FOIA requests they deem unreasonable, cumbersome, or abusive. While that bill failed, other efforts to increase transparency in the First State didn’t make it any further. One bipartisan effort to create an independent Office of the Inspector General was blocked by the House Administration Committee — a common tactic to kill unwanted bills.

In 2023, A Better Delaware is committed to advocating for a nonpartisan Office of Legislative Ethics and Inspector General. These offices would solely exist to hold elected officials accountable and give citizens recourse when they witness or fall victim to waste, fraud, abuse, or misconduct. A Better Delaware will also advocate expanding Delaware’s FOIA laws to include communications between and with Delaware legislators, allowing citizens to serve as a check on those they choose to represent them. The state’s FOIA system should also be updated to the 21st Century, and many basic documents should be made available electronically and preemptively, negating the need for FOIA requests altogether. The state must also enforce Medicaid compliance by ensuring ​​Medicaid applicants are effectively screened before their benefits are approved or denied.

Better Budget Controls

 The United States is in the midst of a recession with an inflation rate at a 40-year high. Delaware, meanwhile, has a budget surplus exceeding $1 billion. Unlike 24 other states with similar surpluses, Delaware has failed to enact any meaningful tax cuts for its citizens or businesses. Despite several bills being proposed in 2022 to cut taxes, none passed.

In 2023, A Better Delaware will continue to advocate liberating Delaware’s citizens and businesses from burdensome, unfair, and regressive taxes. The state should use its surpluses to pay down the outstanding public pension debt, invest in the rainy-day fund, and smooth the budget. Without change, people and businesses will undoubtedly leave Delaware for more tax-friendly states.

Better Energy Policy

 Delawareans pay the 12th highest energy rates in the country. According to the U.S. Energy Information Administration, Delaware produces less energy than any other state. In 2020, the state used nearly 70 times more energy than it produced. Delaware’s renewable portfolio standard requires that renewable energy sources generate 40% of electricity retail sales in the state by 2035, with at least 10% coming from solar energy. But in 2021, just five percent of the state’s total in-state net generation came from small- and large-scale solar-powered facilities. To meet the lofty goals, the state has thrown its support behind several multi-billion-dollar offshore wind projects being developed off Delaware’s coastline. While the projects face stiff opposition from coastal residents and those who doubt offshore wind’s long-term efficacy, the state should be front and center in any discussions affecting the state’s power systems.

To achieve this, A Better Delaware will advocate that the state creates an Energy Advisory Council, which should generate a realistic, science-based energy plan to be approved by the General Assembly. The legislature should oppose any delegation of legislative authority to executive branch agencies, and DNREC’s plan to ban the sale of new gas-powered cars by 2035 must be stopped in favor of a free-market approach to automobile innovation — especially as the average electric car price sails above $66,000.

Better Education Policy

 In 2022, just 30% of Delaware students in grades three to eight met grade-level math requirements, while 42% were proficient in English language arts. During the same period, students’ SAT scores ranked 43rd in the nation. This news comes as the state faces a shortage of more than 500 teachers — a number that’s expected to grow. To improve Delaware’s education system and ensure students are prepared for the future, we must be able to determine what works and doesn’t work in our schools. To do this, we need to be able to track outcomes.

A Better Delaware will advocate that the Department of Education provide a web page that lists average test scores for all students at individual schools so parents and policymakers can easily compare school performances. The Department of Education should also provide more robust and easily digestible information and financial incentives for school choice options and transportation. In light of the state’s teacher shortage, Delaware should expand pathways to becoming a teacher, accept out-of-state certifications and ease its restrictions on educator licensing. Despite extreme disparity in performance among Delaware public school districts, many are unaware that the state allows for school choice. A Better Delaware will work to ensure that parents understand the options available to their children.

Better Workforce Development

Delaware’s unemployment rate is the 48th worst in the nation. As Delaware’s trades rebound from the pandemic and billions of dollars come to the state in federal infrastructure funds, it’s time for lawmakers to free businesses from the strict regulations that prevent them from filling jobs, including apprenticeship ratio requirements. Apprenticeship programs train skilled workers by combining classroom instruction with on-the-job training under experienced journeymen. Many employers in Delaware want to hire and train new apprentices but are restrained from doing so because current regulations require multiple journeymen or full-time workers to also be hired — a cost many small businesses can’t afford.

To unleash the potential of Delaware’s economy, the state should reform business regulations that place undue burdens on small businesses. Licensing fees for specialized fields should be reduced to remove barriers to work, and apprentice ratios should be increased to create a faster pathway to licensing in the trades.

 Happy New Year!

 While this list is far from comprehensive, implementing even one of these simple, common-sense policy proposals would go a long way toward creating A Better Delaware. Throughout the next year, we will continue to fight for your bottom line, for freedom and opportunity, and for responsive, accountable, and transparent government.

Our overarching New Year’s resolution is simple: We will continue to do all in our power to advocate for Delaware taxpayers and businesses and make Delaware a better place to live, work, and start or own a business. We wish you and your family a safe and prosperous New Year as we continue fighting for you in 2023.

A Better Delaware Celebrates the Holidays and Looks Back on a Successful Year

From: Kathleen Rutherford, Executive Director

WILMINGTON, Del. — As A Better Delaware celebrates the holiday season, our thoughts turn gratefully to those who have made our success possible throughout the past year. It’s in this spirit that we say thank you and send best wishes for the holidays and New Year. As we look back on 2022, we’d like to acknowledge those who have supported our organization’s efforts to promote pro-growth, pro-jobs policies and greater transparency and accountability in Delaware state government.

It’s been a groundbreaking year for A Better Delaware. Since last Christmas, our organization’s grassroots campaigns have shown tremendous success, with many of our digital advocate efforts going viral, accumulating more than a million cumulative impressions. Additionally, 98% of our in-house issue-focused blogs have been published across various Delaware news outlets.

Over 98k YouTube subscribers viewed ABD’s video release this past October WHAT NOT TO DO which explores the disastrous impact of Delaware’s COVID policies on the state’s small business community.

– 2022 By The Numbers –

That’s in no small part thanks to the guidance of A Better Delaware’s Advisory Board, which has grown from two-distinguished leaders to six in the past year. In addition to veteran business leader Sam Waltz and beloved former Gov. Mike Castle, four new members have joined our organization: renowned elder law attorney Bill Erhart, accomplished obstetrician Dr. Greg DeMeo, nationally recognized climatologist David Legates, and public safety expert Dennis Godek. All of our board members have been and will continue to be invaluable assets to our organization.

A Better Delaware will continue to build an advisory board with professionals in Education, Finance, Family Health, and Criminal Law experts to advise on school choice, mental health substance abuse issues, state budgetary matters and crime issues all of which influence Delaware’s economic growth.

Thanks to your support, A Better Delaware’s policy advocacy was seen and heard within Delaware’s Legislative Hall. Our organization worked tirelessly to promote legislation that would aid the state’s recovery from pandemic-era lockdowns, ensure transparency in government, reduce Delawareans’ taxes, ease the state’s regulatory burden, and limit wasteful and unnecessary spending. Those bills include Senate Bill 338, which proposed an Office of Legislative Ethics; House Bill 405, which would create an independent Inspector General’s office; House Bill 445, which would reduce the gross receipts tax by 50%, House Bill 71, which would increase the realty tax credit; and many more.

While we’re so proud of the strides we’ve made in the past year, there is more work to be done to create A Better Delaware for us all. To remain part of the movement, be sure to stay informed on our work by looking out for our emails, blogs, and posts on Facebook, Twitter and Instagram.

There’s no greater joy for us than the opportunity to express season’s greetings and a very happy holiday and a peaceful and prosperous New Year to all Delawareans!

Delaware’s Theft Epidemic: A Silent Economic Killer

 By: Kathleen Rutherford, Executive Director

Crime—burglary, robbery, vandalism, shoplifting, employee theft, and fraud—costs businesses billions of dollars each year. Crime can be particularly devastating to small businesses, who lose both customers and employees when crime and fear claim a neighborhood. When small businesses are victims of crime, they often react by changing their hours of operation, raising their prices to cover their losses, relocating outside the community, or simply closing. Fear of crime isolates businesses, much like fear isolates individuals—and this isolation increases vulnerability to crime.

The success of small businesses in Delaware is vital to a vibrant economy. Small businesses serve the needs of the overall workforce, and any detrimental impacts on small business will affect the economy and consumers. Taxes and regulations are the most obvious issues that impact our businesses, but crime is a significant factor that is often overlooked.

Property crime includes theft, shoplifting, and motor vehicle theft. Every year in Delaware since 2015, the rate of property crime per 100,000 residents was higher than the national average. In 2019 the property crime rate for Delaware was 2.35 per 100,000 residents, while the national rate was 2.1.  When businesses and/or families consider relocating, the “perception” of crime is as important as the actual crime rate. Theft, which includes shoplifting is the most reported property crime in Delaware, accounting for 78% of all major non-violent crimes in the state in 2020.

For businesses, burglary, theft, and shoplifting are of primary significance. Nationally, commercial burglaries in 2019 accounted for 32% of all burglaries reported. In 2019, Shoplifting accounted for 6,016 of the 18,085 thefts reported in Delaware. Shoplifting is a major contributor to the crime problem for businesses. While Delaware law enforcement is performing above the national averages of clearance rates, we remain at a higher rate of property crimes than the nation.

The most efficient way to reduce the crime rate is to prevent it from occurring. Burglary is a preventable crime in most cases. Alarm systems and surveillance equipment are optimal, but “good old fashioned” security is still important. Many burglars have told arresting police officers that they always chose a target that was easier to enter than others in the area. If doors are locked with adequate locking devices, windows secured properly, and a commercial space is visible from outside, burglars will often seek a different target.

Motor vehicle thefts have decreased over the years as built-in security systems have become more common in vehicles. Unfortunately, many people continue to leave their cars unlocked, leading to theft of the car itself, or items inside the car. It is a common practice for thieves to walk down residential streets or through parking lots and enter unlocked vehicles to steal items from inside.

Shoplifting has been a scourge for businesses for many years, and a crime that shows no signs of eradication. There are organized groups of criminals who participate in planned shoplifting operations. Many police agencies today assign officers specifically to units that focus on organized criminal shoplifting groups. The National Retail Federation reports that retail crime is costing businesses more than $700,000.00 for every $1 billion dollars in sales.

The AG’s office, law enforcement and industry organizations working together to educate business owners and employees on prevention techniques by:

• Restoring the Pre-Pandemic dedicated retail crime unit within the state police, assigned to exclusively to work on organized retail crime (ORC).
• Ensuring the legislated dedicated Attorney General retail prosecutor is named and assigned workload exclusive to organized retail crime. At monthly in-person meeting with industry businesses, must discuss actions, results, and recommendations to reduce retail crime.
• Re-establish the monthly in-person meeting with businesses loss prevention, attorney general retail prosecutor, state police ORC task force, court calendar administrator, chambers, and industry groups.
• Further develop and coordinate technology for mass communication between retailers and detectives for rapid response.
• Communicate effective enforcement of civil recovery judgments by the courts and collection agencies to offset retailers cost of theft.
• Holding an annual loss prevention conference including national and regional loss prevention professionals, members of the public, legislators, and other impacted groups with a publicly available annual report of crime issues facing Delaware businesses.

Industry experts attribute the continued rate of shoplifting offenses to reduced staffing at businesses. Michael Quaranta, President of the Delaware State Chamber of Commerce, has said “with fewer eyes on would be thieves, that’s only served to embolden those intent on shoplifting”. Quaranta suggested that secured product displays and technology are increasingly depended upon to prevent or detect shoplifting. Fear of violence against employees has also resulted in some businesses adopting policies prohibiting employees from confronting suspected thieves. With the realities facing Delaware, we must double-down on our efforts to communicate and coordinate with all stakeholders.

Veteran Business Leader and Communications Specialist to Assume Role of Vice Chair

 WILMINGTON, Del. — After two years of dedicated service, Board member Sam Waltz has been promoted to serve as Vice Chair of 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 Delaware state government.

Waltz is an award-winning and respected professional leader who remains active in Delaware’s political and business scenes. After serving in the U.S. Armed Forces during the height of the Vietnam War, Waltz returned to complete two degrees, at the University of Illinois.

He would go on to work as a political journalist and state capitol bureau chief for The News Journal before a long public and government relations career. His earlier work as a journalist prompted him in 2014 to found the Delaware Business Times, the state’s leading business news publication.

He served as chair of the Delaware delegation to the 1995 White House Conference on Small Business, chair of two Governor’s Conferences on Small Business in the 1990s, Chair of the Delaware Leadership Council of the National Federation of Independent Businesses between 1997 and 2007 and held committee and board memberships at the Delaware State Chamber of Commerce, New Castle County Chamber of Commerce and Delaware Small Business Chamber.

Chris Kenny, chairman and founder of A Better Delaware, announced Waltz’s promotion last week.

“Since joining ABD in November 2020, Sam has worked tirelessly to recruit and establish a multifaceted Advisory Board that includes former Gov. Mike Castle, renowned elder law attorney Bill Erhart, accomplished obstetrician Dr. Greg DeMeo, nationally recognized climatologist David Legates, and public safety expert Dennis Godek — all of whom share a vision for A Better Delaware and who contribute their expertise to our movement.”

“A Better Delaware’s impact has grown to reach thousands of Delawareans through a multi-channel communications strategy that includes social media, email, direct-web, and op-eds in local newspapers,” Kenny said.

Waltz will continue to build A Better Delaware’s advisory board with professionals in Education, Finance and Family Health to advise on school choice, mental health and substance abuse issues, and state budgetary matters all of which influence Delaware’s economic growth.

Executive Director Kathleen Rutherford hailed Waltz as a driving force behind the organization’s success and a shining light into the organization’s future.

“Sam is an experienced, respected and well-connected leader with a brilliant mind for Delaware’s business and political culture,” Rutherford said. “In two short years, with Sam’s help, A Better Delaware has helped to add five new advisory board members who with their professional advice, will help to make a marked and observable impact on public policy in the First State — but there’s more work to be done.”

Should the ‘California Way’ be the ‘Delaware Way’?

From: Kathleen Rutherford, Executive Director

If you haven’t yet heard, Delaware’s Division of Air Quality (housed in DNREC) is now considering regulations to ban new internal combustion vehicles by 2035.  Following the lead of the State of California, only new electric vehicles can be sold in Delaware, although it does not explicitly ban fossil fuel-based cars.  Why would we want to do this?

According to an executive order signed by Governor Newsom of California, this is part of his draconian attempt to fight climate change. Remember that carbon dioxide is not a pollutant; it is a life-affirming gas that is needed by vegetation to thrive on our planet.  Carbon dioxide concentrations have been rising over the last thirty years and, except for selected areas of deforestation and urbanization, satellites have shown that a majority of the planet has become noticeably greener. The planet is becoming warmer, but carbon dioxide is merely a bit player in this manifestation of climate change. And no definitive trends exist in flood or drought frequencies, the frequency, intensity, or landfall potential of tropical cyclones, or the increase in the rate of sea-level rise.

Moreover, electric vehicles are not green. The batteries on which they run require extensive environmental degradation, particularly in China and Africa, to extract them from the earth. Their production requires much energy to produce, which is usually obtained from the combustion of fossil fuels. At present, the batteries cannot be recycled and thus they litter landfills. And most of the electricity produced, distributed through the grid, and used to recharge the batteries comes from the combustion of fossil fuels.

In Delaware, the stated reason why DNREC proposes to adopt the California Air Resources Board (CARB) regulations is to comply with EPAs ozone standard.  Tropospheric ozone (ozone near the surface) is a pollutant that damages vegetation and makes breathing difficult, particularly for those with asthma. But New Castle County currently complies with the EPA standard, although it is lumped in with the Philadelphia SMSA which does not.

Even left-leaning news outlets are questioning the wisdom of the California regulations.  The New York Times raises the concern that success depends on how well consumers take to electric cars and their limitations, and how rapidly auto manufacturers can solve the problems associated with mass production of electric vehicles.

Used vehicles are exempt, which could cause Delaware (or California) to become like Cuba where old used cars fill the highways.

The 1959 Cuban Revolution and the subsequent import embargo that Castro placed on foreign car imports and their parts stalled automobile development. Thus, Cuban streets were filled with 1950s vintage cars for decades afterwards.  After 2035, will Delaware look like Cuba did?

Both the Associated Press and The Washington Post notes these limitations but go on to argue that infrastructure issues can create further difficulties. Although California has 80,000 charging stations (the most in the country), they will need to increase that by a factor of 15 to refuel all of the new electric vehicles—Delaware will need many more as well.  Rural areas are more of a challenge; thus, Kent and Sussex Counties will lag behind.

Moreover, to accommodate these new electric vehicles, a more robust energy grid, an enhanced supply chain of materials such as lithium for batteries, and the availability and affordability of vehicles for all income levels are prerequisites.

It is premature to consider these regulations as the California ban on internal combustion engines has been challenged in court by 17 states, mostly in the Midwest.  The Missouri State Attorney General commented, “If California can set restrictive ‘gas emissions’ standards, manufacturing becomes astronomically expensive, and those additional costs are passed onto consumers, many of which are Missourians.”  If Delaware adopts such standards, expect consumer costs to skyrocket since the cost of transportation affects virtually everything that consumers purchase.

Given all of these challenges, it is highly premature to pursue a policy that will radically change our transportation, supply chain, and manufacturing network, and that will cause state taxes to rise astronomically to accommodate this policy.  If we make it more expensive for businesses to operate in Delaware, they are likely to move to another state, taking their jobs with them.  Since carbon dioxide is a life-affirming gas and that electric batteries are not green and require much energy, largely fossil-fuel based, to produce, this is not a viable economic and environmental choice.

Thus, a better solution would be to study the arguments of both sides of the existing litigation and wait to see the outcome in the courts. In the meantime, we must weigh the costs of this repressive policy in light of the adverse economic impacts that the policy is likely to have.  The correct path forward is to hold off on pushing this into State policy until more information and the court decision can be brought to bear.  Moreover, the state needs buy-in from its citizens rather than hurriedly enact this policy through a DNREC edict.

Delaware Affordable Housing: Legislation Won’t Fix Any of It

By: Kathleen Rutherford, Executive Director

Delaware is in the midst of an affordable housing crisis — there’s no question about it. Rents are rising, inventory is dwindling, and people are struggling. As legislators consider possible solutions, they must be careful not to exacerbate the problem.

Data released this year by Housing Alliance Delaware says the state faces a shortage of more than 18,000 affordable and available rental homes for extremely low-income renters. An annual household income of $46,846 would be required to reasonably afford a two-bedroom rental home in Delaware, according to the National Low Income Housing Coalition. The fair market rate for that two-bedroom home would be $1,071 per month, according to the U.S. Department of Housing and Urban Development.

In response, lawmakers have proposed a number of bills that, however well-intentioned, will do nothing to fix Delaware’s affordable housing crisis. One such bill — Senate Bill 90 — would have forced landlords, large and small, to accept Housing Choice Vouchers, commonly known as Section 8 vouchers.

In its synopsis, sponsors wrote that the bill would “prohibit discrimination based on source of income,” suggesting the reason a landlord might turn down Housing Choice Vouchers must be discrimination. What sponsors didn’t mention in the bill is that units in the Housing Choice Voucher program are subject to myriad additional regulations, including regular mandatory inspections — ones that take weeks or even months to schedule.

The Housing Choice Voucher program was designed to incentivize rental owners to participate. This is accomplished, in part, by the government providing direct rental payments to rental owners, some of whom are thrilled to accept Housing Choice Vouchers. After all, the money is guaranteed by the government and landlords don’t have to worry about rent checks bouncing or coming in late. There is no denying, though, that the program is administratively burdensome, difficult to navigate and subjects all landlords, whether they like it or not, to the unpredictable timelines of government agencies. For that reason, forcing a landlord into the program — especially a “mom and pop landlord” — is unfair and will likely have the opposite of the intended effect.

Another bill, Senate Substitute 1 for Senate Bill 101, would have guaranteed tenants the right to legal counsel in eviction proceedings and established an eviction diversion program aimed at resolving disputes after a landlord files for eviction.

Proponents said the bill would protect tenants who are unable to afford legal representation and are outmatched when they arrive in court for their eviction proceedings. The reality, however, is that by giving tenants access to free legal counsel during evictions, proceedings are drawn out over months and landlords are forced to retain legal counsel of their own. All the while, landlords may not be receiving their rent payments.

That cost — and the cost of the attorney — inevitably get passed on to consumers in the form of rent increases. With exceptions for extreme situations, having a tenant in a home and paying rent is what’s best for both landlords and tenants. Only in those most extreme of situations is eviction necessary, and when it is, forcing additional expenses on landlords only adds insult to injury. Prior to the pandemic, the process to adjudicate such cases would take two months or less. Currently, due to staffing shortages and other issues within the JP Court system, these cases can take six months or more. This loss of income must be compensated for, most often in the form of rent increases. That’s not because landlords are greedy — it’s because if a landlord goes out of business, a family is out of its home.

Other lawmakers have pushed more extreme proposals, such as rent control and affordable housing mandates. The reality is, these proposals don’t work. “While rent control appears to help current tenants in the short run, in the long run, it decreases affordability, fuels gentrification, and creates negative spillovers on the surrounding neighborhood,” according to a study from the Brookings Institute.

There are two solutions to the affordable housing crisis that may prove effective, and neither involves forcing landlords to keep rents artificially low or accept vouchers they’re not equipped to accept. First, we should focus on getting the government out of the way. Zoning laws and regulations on building heights, lot sizes, and parking requirements have proven to exacerbate the housing shortage. An estimated 424,000 families could access federal housing assistance if regulations were relaxed in just 11 metropolitan cities, a study 2021 study found.

Second, government must incentivize private developers to voluntarily create more affordable housing. This could be achieved by creating a state-level Low Income Housing Tax Credit program. The LIHTC was created in 1986 and signed into law by President Reagan. The purpose of the legislation is to encourage a private/public investment to preserve and construct new affordable rental housing. Alone and in combination with tax-exempt private activity bonds, the LIHTC has been the most productive sources of affordable housing financing in the nation’s history. The equity raised through the tax credit investment makes it possible for developers to attract the financing needed to create or restore low-income rental housing.

Nineteen states have expanded the federal program on the state level or created entirely separate programs. In Missouri, for example, every dollar spent on the program resulted in $10.59 in economic activity and $5.81 in gross state product. As a result, Missouri expects $5.23 billion in statewide economic impact and $2.86 billion in gross state product, as well as the creation of 35,600 construction jobs.

Delaware could also eliminate or loosen regulations on tiny homes and accessory dwelling units, or ADUs. ADUs are typically secondary dwellings built on existing lots such as guest homes, mother-in-law suites or tiny homes. Many Delaware cities, like Newark, outright ban ADUs. At the county level, pages of burdensome regulations impose restrictions on the structures. By cutting through the regulatory obstacles, Delaware could support its citizens’ property rights while also alleviating the affordable housing crisis.

It’s by incentivizing developers, reducing regulation, and supporting property owners’ rights that Delaware will be able to make a dent in the affordable housing crisis. Efforts to force landlords into programs they don’t want to participate in and meddle with the supply and demand of Delaware’s housing market, will have the opposite of the intended effect.