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Restaurant Chain Announces Bankruptcy, Says Minimum Wage Hikes to Blame

From the Foundation for Economic Education

Restaurants Unlimited, a Seattle-based chain with restaurant locations in 47 US cities, announced on Sunday it was seeking Chapter 11 protection, citing “progressive” wage laws.

The company, which has operated since the Lyndon Johnson Administration, said rising labor costs—part of a national trend of government-mandated minimum increases—were part of its decision.

“Over the past three years, the company’s profitability has been significantly impacted by progressive wage laws along the Pacific coast that have increased the minimum wage,” Chief Restructuring Officer David Bagley said in court filings, The Seattle Times reports. “As a large employer in the Seattle metro market, for instance, the company was one of the first in the market to be forced to institute wage hikes.”

The minimum wage was not the only factor Restaurants Unlimited blamed for their impending bankruptcy. The company also cited a pair of soft restaurant openings and a decline in casual dining.

The Congressional Budget Office released a report estimating that a House bill designed to raise the federal minimum wage to $15 an hour would cost 1.3 million jobs.

The announcement, however, mirrors labor trends on the east and west coasts. BLS data show that New York City experienced its sharpest decline in restaurant jobs since 9/11 following its passage of a $15 minimum wage law. In California, a local newspaper recently detailed how an entire business district virtually disappeared following the city’s aggressive minimum wage push.

Restaurants Unlimited’s announcement came a day before the Congressional Budget Office released a report estimating that a House bill designed to raise the federal minimum wage to $15 an hour would cost 1.3 million jobs.

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Delaware eases restrictions on restaurants, bars, sports as cases continue to surge: What to know

From Delaware Online

Starting Friday, Delaware bars and restaurants will no longer have a curfew, and the state is easing restrictions on sports competitions.

Gov. John Carney announced the eased restrictions in a press release on Friday.

The state’s stay-at-home advisory and mandate that everyone wear a mask when indoors with people whom they don’t live with, including in private settings, are still in place.

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Georgetown launches online financial ‘transparency center’

From Delaware Online

Much of Georgetown’s financial information can now be viewed online by anyone, anytime.

The Sussex County seat is the first Delaware municipality to use ClearGov software to provide residents with an online financial “transparency center.”

“These days, not everyone has the time to attend public meetings. The transparency center will make it easy and convenient for interested residents to stay informed,” Mayor Bill West said.

ClearGov aims to make financial information easy to access and understand. It breaks down Georgetown’s revenues and expenditures by category, each of which can be clicked to view further breakdowns. Clicking “download financials” at the top of each revenue and expenditure page provides even more information.

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Delaware restaurants plan to fight bill that would raise tip wages, raise costs for businesses

From Delaware Live

If signed into law, the bill would dramatically raise the base wage paid to people who earn tips. That could have a ripple effect that would actually destroy income for servers and bartenders; raise the cost of menu items; and put some restaurants out of business. It also will dramatically raise costs for employers who not only will have to pay nearly four times as much to servers, but must pay higher costs for things such workman’s comp insurance and unemployment benefits, which are based on payroll costs.

And everybody in the restaurant industry continues to point out: Restaurants still haven’t returned to full strength either in sales or employment and continue to struggle under COVID-19 restrictions. Changes like the a rise in the minimum wage or the tip wage will cause more and perhaps unsurmountable financial turmoil, they say.

Restaurants will advocate in full force against any effort that blocks their recovery, said Carrie Leishman, CEO of the Delaware Restaurant Association.

“We need the state to help do whatever it can to make restaurants healthy and whole so we can keep these people employed,” she said.

Right now, restaurants pay people who can earn tips $2.23 an hour. House Bill 94, introduced by Rep. Kim Williams, D-Newport, would raise that to 65 percent of the state’s minimum wage.

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Proposed bill would create new lawmaker committee to examine state funding for non-profits

From Delaware Live

A Sussex County state representative wants to change the way Delaware allocates money to non-profits.

State Representative Ruth Briggs-King, a member of the Joint Finance Committee that traditionally has handled that mission, has introduced House Bill 93 to create a Grants-In-Aid Committee.

It  would be a joint effort of both the Senate and the House and would allow lawmakers more time to view requests for grants-in-aid and to develop the grants-in-aid appropriations bill, she said.

Ultimately, she said, it would allow deeper understanding of the appropriations while giving a greater level of oversight to the grant-in-aid process to protect taxpayer dollars and prevent potential misuse of the funding.

Briggs King says the bill has broad bipartisan support with three Democrats listed among the sponsors and co-sponsors — Rep. Andria Bennett of Dover, Rep. Sherry Dorsey Walker of Dover and Rep. Madinah Wilson Anton of New Castle. The bill now is assigned to the House Administration Committee.

The JFC spends about a month looking at the governor’s recommended budgets for state operations and grants-in-aid, which often pays non-profits to supply specific state-supported programs, such as childcare, adult care and meal deliveries. It holds hearings with many groups, including state agencies and state colleges and universities.

“There’s just not much time to delve that deeply into it,” Briggs-King said. “Many times there are special interests that the public doesn’t see, a maneuvering if you will to get special things and special funding. I just think it would be better if we had more of a regular committee process where the committee has more of a deliberative process to review.”

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New Castle County to begin revamping local property tax system

From Delaware Online

New Castle County has agreed to recalculate the property values it uses to set local tax bills, beginning a process that could lead to widespread changes to property taxes in the coming years.

The commitment was made as part of a legal settlement approved by a Delaware Chancery Court judge last week. The settlement seeks to end the county’s involvement for now in a lawsuit aimed at recalculating unconstitutional property tax valuations throughout the state.

As of now, Kent and Sussex counties, which are also defendants in the lawsuit, have not submitted a similar agreement, meaning litigation involving the future recalculation of tax values in those counties will continue.

The New Castle County agreement was prompted by a judge’s ruling last year that the long-term lack of a reassessment of local property values used to calculate tax bills has led to a system where some property owners get artificial tax breaks and some pay more than their fair share based on their property’s actual worth.

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Gov. John Carney’s proposed budget for Delaware: Police body cameras, COVID-19 aid and more

From Delaware Online

Gov. John Carney’s proposed spending plan for next fiscal year includes the first steps toward statewide police body cameras, funding the ongoing COVID-19 response and increases in the minimum wage, as well as small raises for state workers.

The measures are a signal that Delaware officials are keeping their promise to hold law enforcement accountable in response to the Black Lives Matter movement while also bracing for an ongoing fight against the virus at least until the latter half of this year.

The taxpayer-funded spending plan, the first of Carney’s second term, still adheres to the austere fiscal strategy that he had during his first term by limiting extra revenue toward one-time expenses, such as construction projects and grants.

Carney proposed his $4.7 billion budget plan, a 3.5% increase, along with $894.4 million in capital spending and $55.5 million grants-in-aid plans, to lawmakers shortly before noon on Thursday.

His virtual presentation comes a little more than two weeks after lawmakers convened for the 2021 legislative session.

The 62-person General Assembly will have to approve a spending plan for the fiscal year that starts July 1.

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Flight of alcohol bills aim to support, expand industry

From Delaware Business Times

DOVER — State lawmakers are weighing a flight of bills aimed at liquor stores and craft breweries while another continues a lifeline that many taprooms and restaurants have relied upon to stay in business amid the pandemic.

Both liquor stores and craft breweries in Delaware are capped by the number of licenses they can hold, but two bills would raise those ceilings to allow for more growth in the alcohol industry. House Bill 23 would raise the number of liquor stores one individual or business can have in the state from two to three, while House Bill 45 would raise the cap for breweries and brewpubs to three to five.
Rep. Bryan Shupe (R-Milford), one of the sponsors of HB45, argued that capping the alcohol industry was an anti-business measure that hampers one of Delaware’s best sectors. Shupe has been a part of recent efforts to eliminate the cap entirely, but in the last two years bills have either died in committee or never made it to the Senate floor.

“It was very divisive back then, particularly on the distribution side,” Shupe told the Delaware Business Times. “Breweries and brewpubs are a small business, and as a small business owner myself, I hate to see anyone limit a small business. They already face a lot of challenges in terms of attracting an audience and working through the regulations even before they even start talking about expansion.”

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Democratic lawmakers propose higher tax rates in Delaware

From Delaware Online

DOVER, Del. (AP) — Democratic lawmakers in Delaware are proposing several new tax brackets that would result in higher-income individuals paying more to the state’s coffers.

The current top tax rate in Delaware is 6.6% for taxable income exceeding $60,000.

A bill introduced Wednesday would apply the 6.6% rate to income between $60,000 and $125,000 and create a new rate of 7.1% for taxable income in excess of $125,000, up to $250,000.

Those with income between $250,000 and $500,000 would pay 7.85%, and a top rate of 8.6% would be established for Delawareans with taxable income of more than $500,000.

Co-sponsors of the measure include the state Senate president and several progressive Democrats who were elected in November.

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Delaware could exempt unemployment benefits from state taxes. How it would work

From Delaware Online

Delaware is considering exempting unemployment benefits that were paid in 2020 from state income taxes.

The proposal would be done through a bill that state lawmakers introduced on Monday with the support of Gov. John Carney.

The bill would also waive the 13-week waiting period before the state could “trigger on” to pay extended unemployment benefits in periods of high unemployment.

The proposal comes after more than 160,000 people filed for unemployment last year as a result of businesses shutting down temporarily or permanently due to Carney’s state of emergency orders to slow the spread of COVID-19.

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