In The News

Commentary: Inspector General office will benefit citizens, state

From: Bay to Bay News

Delaware’s legislature has a golden opportunity to take a major step forward in addressing shortcomings in state agency management and a seemingly never-ending string of minor and major scandals involving agency operations. The bipartisan House Bill 405 would create a statewide Office of the Inspector General.

For the past three years, the Delaware Coalition for Open Government (DelCOG) — through contact with the Association of Inspectors General at John Jay College of Criminal Justice in New York City, presentations to good-government groups across Delaware and commentaries in the Delaware news media — has been raising awareness of the need for a Delaware inspector general for independent and nonpartisan oversight of state agencies and state-funded entities.

DelCOG is pleased to know Democrats and Republicans in both houses of the Delaware General Assembly have come together to establish an Office of the Inspector General in HB 405.

The bipartisan effort to create this office for the benefit of all Delawareans is a testament to the need for the oversight it will provide and the investigative authority that will address not only waste, fraud and abuse but also mismanagement, misconduct, corruption and neglect of office.

The inspector general will be authorized to investigate possible illegal activities in state agencies, as well as to investigate mismanagement and related issues that undermine the effectiveness of agencies and limit their abilities to help Delawareans. An inspector general also can act in concert with the Delaware attorney general to promote ethical and legal behavior and stop agency mismanagement and abuse of office.

When state agencies fail in their missions or ignore their inherent responsibilities, the public has the right to report issues, demand solutions and expect corrective actions to be implemented — a role that the Office of the Inspector General would fulfill through its mission of transparency and accountability.

Government functions best when transparency, accountability and “in the public interest” are the guideposts that state agency officials follow in making decisions and carrying out policies for the safety, well-being and happiness of Delaware’s citizens, as well as helping to ensure proper use of taxpayer money.

When state agency officials ignore or dismiss these guideposts, mismanagement and neglect of office swiftly can lead not only to conflicting policies and actions but also to waste, fraud, abuse or worse. Consequently, DelCOG believes Delaware needs a dedicated, nonpartisan and independent inspector general for oversight and investigation, ultimately to enhance public trust in our government.

An Office of the Inspector General, through its investigations and efforts to improve management, can contribute to agencies addressing chronic problems that Delawareans observe or perceive, such as suspicious bids and state contracts; questionable property and real estate sales and leases, as well as grants and loans; discrimination in agencies; failure to address widespread water pollution and related issues; and risks to the health and safety of citizens, residents in the care of the state and employees.

By exercising authority to oversee and investigate state agencies and state-funded entities for compliance with their missions and state laws, an independent, nonpartisan Delaware inspector general and staff can, among other things:

• • Ensure that government agencies act in the public interest and conduct agency affairs with honesty and integrity.
  • Investigate and evaluate state agency deficiencies to address questionable practices and to deter or stop waste, fraud, abuse, misconduct, mismanagement and neglect of office.
  • Receive complaints by residents and state employee whistleblowers about state agency officials or agency actions or inactions, investigate them and repair public confidence in the integrity of state agencies and officials.
  • Recommend changes to state laws, policies and practices to help rectify systemic problems.
  • Save state taxpayer money. Inspectors general in other states and the federal government have a history of reducing waste and costly mismanagement errors well in excess of the cost to fund the office.

Because chronic and unresolved problems are counter to Delaware’s ethical and legal directives and warrant oversight, investigation and remediation, DelCOG encourages the General Assembly to pass this legislation establishing the Office of the Inspector General and giving the inspector general the tools and resources necessary to fulfill the oversight mission benefiting all Delawareans.

Finally, DelCOG calls on all concerned citizens and entities throughout the state to contact their state representatives and senators and urge them to pass HB 405 during this Assembly session and urge the governor to sign it! If you aren’t sure who your state legislators are, type in your address at this link to find their names and contact information: legis.delaware.gov/findmylegislator.

Keith Steck is president of the Delaware Coalition for Open Government.

How Patrick Mahomes’s Haircut Demonstrates the Ridiculousness of Occupational Licensing

From: Libertas Institute

For Patrick Mahomes, NFL quarterback for the Kansas City Chiefs, looking good means playing good. To stay looking his best, the perennial Pro Bowler and Super Bowl-winning quarterback often flies in his personal barber to give him his haircut while on the road during the NFL’s grueling season.

What might not be known about these haircuts is that Patrick Mahomes’s barber, DeJuan Bonds, is likely breaking the law when he delivers haircuts out of his home state.

An example of this occurred when Mr. Bonds was flown to Miami by Mahomes to give him a haircut before Super Bowl LIV.

At this time, in Kansas, Mr. Bonds’s home state, to receive an occupational license one must have completed more educational requirements than in Florida. Kansas required 1,500 hours of training and $180 in fees, while Florida required only 1,200 training hours and $428 in fees. However, Florida did not recognize licensing reciprocity for barbers. This would’ve made it illegal for Mr. Bonds to cut Mahomes’s hair in Florida as he was unlicensed to do so.

This story is an obvious illustration of how arbitrary and silly occupational licenses are. Mr. Bonds is clearly a qualified barber, as shown by one of the best quarterbacks in the NFL trusting him with his hair, so why should he even possibly face criminal penalties for cutting hair in another state?

Thankfully, Mr. Bonds did not face any criminal consequences for his actions. Nobody in Mr. Bonds’s position should ever have to fear criminal penalties for simply serving their clientele by performing a job they are more than qualified to do.

Unfortunately, examples that demonstrate the need to abandon and reform occupational licensing regulations across the country are occurring every day. These examples bar real individuals, simply trying to provide for themselves and their families, from practicing occupations they are qualified to perform.

Delaware unemployment rate stalls in April

From: Delaware Business Times 

DOVER – Delaware’s unemployment rate was unmoved for the first time in months in April, while adding 500 net jobs, according to state officials.

April’s job gains add to 2,700 jobs created since February, and Delaware added 300 more job-seekers to continue pushing its record-high labor force, according to the monthly report released Friday morning.

The labor force captures not only workers and those receiving unemployment benefits, but also those in search of work who aren’t receiving assistance. As workers stop seeking work, for a variety of reasons ranging from retirement to child care needs, they are no longer counted as being unemployed in the state.

Delaware’s April unemployment rate remained at 4.5%, and was still significantly higher than the national average, which also stalled at 3.6% last month.

In June, Delaware’s rate was lower than the national average, but the state has since steadily fallen behind in its recovery. It ranked 43rd in unemployment rate among states in April, according to U.S. Bureau of Labor Statistics data. It was tied with New York, but has fallen behind New Jersey and Maryland, which ranked tied for 33rd and 38th at 4.1% and 4.2%, respectively. Pennsylvania continues to have higher rates of unemployment, ranking 47th with a rate of 4.8%. Nebraska and Utah remain tied at the lowest rate of 1.9%, while New Mexico had the highest at 5.3%.

The Delaware Department of Labor’s report is taken monthly during the calendar week that contains the 12th day. The state recorded 22,400 unemployed last month, a decrease of 200 people over March.

The official monthly unemployment figure is created by looking at continuous unemployment insurance claims as well as a U.S. Bureau of Labor Statistics survey of residents on their employment status. It tracks not only those receiving benefits, but also those who are ineligible, such as terminated employees, those who have resigned and the self-employed, who only became eligible for assistance under a special federal program established under the CARES Act.

The state’s three counties saw differing rates of unemployment in April, with New Castle, Kent and Sussex counties reporting rates of 4.3%, 5.1% and 4.2%, respectively – although those statistics aren’t seasonally adjusted. Wilmington and Dover, the state’s two most populous cities, have seen an even greater impact in job losses, where 6.4% and 6.9% of workers were unemployed, respectively.

The largest monthly job gains came in the education and health care sector, which added 600 jobs last month. It was followed by construction, which added 500; manufacturing, which added 300; trade, transportation, and utilities, which added 300, and government, which added 200.

Leading job losses was the professional and business services sector, which lost 700 jobs, while unsorted industries lost another 300 and financial activities shed 200 jobs.

Fort DuPont bill raises questions about transparency

From Town Square Live

The House of Representatives on Tuesday passed a bill that will put Sen. Nicole Poore on the board of directors of the Fort DuPont Redevelopment and Preservation Corp.

Poore – who represents Delaware City, where Fort DuPont is located – also serves as co-chair of the Joint Committee on Capital Improvements, commonly referred to as the Bond Committee.

The Bond Committee has given millions to the Fort DuPont Corp.; a quasi-public entity under the jurisdiction of the Department of Natural Resources and Environmental Control.

Allowing her to join the board is wrong, say critics who don’t want to see a state senator involved in deciding how much the corporation will ask for and also deciding how much the state will give them.

In effect, the board on which she sits will benefit from funding she’s responsible for allocating, critics say.

“I believe it’s a conflict to have people who are on the board, who would be requesting the money and spending the money, and then also have them as legislators appropriating the money,” said Jack Guerin, a transparency advocate and publisher of the website, FightDECorruption.com.

A petition sponsored by Guerin’s website asking the Senate Ethics Committee to review Poore’s role and remove her as a prime sponsor of House Bill 355 gathered more than 100 signatures.

“As legislators, they would be appropriating funds for the Fort Corporation. As [Fort DuPont] Board members, they would develop and lobby for funding requests, determine budgets, and monitor expenditures,” the petition reads. “The functions of appropriating and spending state funds should remain separate.”

It cites Senate Rule 17, which says “…a member who has a personal or private interest in a measure or bill pending before the Senate shall disclose the fact and may not participate in the debate or vote on the measure or bill.”

House Bill 355, sponsored by House Majority Leader Rep. Valerie Longhurst, D-Delaware City, with Poore as Senate sponsor, does not specifically mention Poore, but it does add the co-chairs of the Bond Bill to the Fort DuPont board.

The Bond Bill’s co-chairs are Poore and Rep. Deb Heffernan, D-Bellefonte.

A House Amendment sponsored by Rep. Bryan Shupe, R-Milford, failed in the House of Representatives Tuesday. The amendment would have removed the language in HB 355 that adds Poore to the Fort DuPont board.

Shupe is the CEO of Delaware LIVE News.

Two members – Shupe and Rep. Rich Collins, R-Millsboro, voted yes on the amendment. Thirty-nine voted no.

“This bill creates a permanent structure where individuals are asked to serve two masters, the board of Fort DuPont and the financial health of taxpayers’ money through the Bond Bill, which they also have a responsibility to uphold,” Shupe said.

Shupe said he didn’t file the amendment because he believes Poore would act inappropriately, but to prevent the potential for misconduct in the future. He said he consulted with Deborah Moreau, legal counsel for the State Public Integrity Commission, who told him it was a clear conflict of interest.

“I find this to be a very unfriendly amendment for a couple of reasons,” Longhurst responded. “Number one is that Sen. Poore did have an ethics committee review over in the Senate and they did not see that this was a conflict of interest based on their set of rules.”

If an ethics committee review was conducted in the Senate, those proceedings were not made public.

Poore could not be immediately reached for comment Tuesday.

Fort DuPont is a historical site that was originally commissioned in 1899 as part of the nation’s coastal defense system.

The state acquired the property in 1947 and built the Governor Bacon Health Center. In 1992, most of the land was transferred to the Department of Natural Resources and Environmental Control to become Fort DuPont State Park.

Among other things, HB 355, which Longhurst and Poore call a “clean-up bill,” restructures the Fort DuPont Redevelopment and Preservation Corp.’s board of directors to replace four directors appointed by the mayor of Delaware City with the two co-chairs of the Capital Improvement Committee.

Longhurst and Poore have long supported the redevelopment corporation, having sponsored the legislation enabling the creation of the agency in 2014.

Since its establishment, the agency has received more than $18.75 million in taxpayer dollars through the Bond Bill. In 2021, the corporation received $3,050,000. During a recent Bond Committee hearing to request funds for fiscal year 2023, the corporation requested $3 million.

HB 355 already passed in the House of Representatives by a vote of 35 yes, 3 no and 1 not voting. It then advanced to the Senate where it passed unanimously. Because it was amended in the Senate, it returned to the House for final approval Tuesday, where it passed again, this time by a vote of 39-1 with one member absent.

Fort DuPont has long been the subject of criticism, most recently culminating in the forced resignation of the agency’s executive director, Jeff Randol.

“I have long been a strong supporter of the Fort DuPont Redevelopment project,” Longhurst said in Feb. 2022 after Randol announced his resignation. “I’m also aware of the issues and concerns surrounding the corporation and the Delaware City community, specifically questions about transparency.”

Randol’s compensation included a home on the Fort DuPont property which was renovated to include an elevator, an in-law suite, and a large koi pond. The renovations were paid for by the corporation at an expense of nearly $700,000.

In 2020, the corporation sold a 128-acre parcel of land at a price of $5 million for development as a private RV Campground. A petition to reverse the sale gathered more than 4,000 signatures after critics argued the public had a right to be involved in a decision to sell public lands to a private entity.

In addition to adding the Bond Bill co-chairs to the corporation’s board, HB 355 also replaces

• The secretary of the Department of Health and Social Services with the director of the Delaware Prosperity Partnership.
• Three directors elected and appointed by the board with one director appointed by the speaker of the house.

The bill would add:

• One director appointed by the president pro tempore of the Senate.
• One director who is a resident of Fort DuPont appointed by the governor.
• One director who is a resident of Delaware City appointed by the governor.

The following seats would remain the same:

• One director appointed by the governor to serve as chair.
• The secretary of the Department of Natural Resources and Environmental Control.
• The controller general.
• The secretary of state.
• The director of the Office of Management and Budget.
• The director of the Office of State Planning Coordination.
• The city manager of Delaware City.

The bill also says, moving forward, the corporation may not pay administrative costs with funds appropriated by the General Assembly.

It clarifies the corporation and its board are considered public bodies.

Guerin said Poore’s sponsorship of the bill would be a conflict of interest even if she didn’t represent Delaware City, where Fort DuPont is located.

The decision to put a co-chair of the Bond Committee on any board which receives funding from the state would be inappropriate, he said.

“I think those functions should be separate, regardless of the legislator’s specific district,” Guerin said.

Global Healthcare Index

From Social Security Resource Center

A look at healthcare systems around the world and in the United States

The Worst Countries for Healthcare

1. Turkey – Healthcare score: 1.14/10

Turkey is the worst country for healthcare out of all countries on our list, scoring 1.14 out of 10 across all factors.

Turkey’s healthcare spending is $1,267 per capita, lower annual spending than every other country we looked at except for Mexico. There are just 1.8 physicians per 10,000 Turkish inhabitants, the lowest out of all countries on our list, and 18.62 hospitals per million inhabitants.

Turkey’s Logistics Performance Index healthcare score is 58.

2. Hungary – Healthcare score: 1.9/10

Hungary’s healthcare system is one of the lowest scoring on our list, over all the factors we looked at.

Hungary spends around $2,170 on healthcare per capita each year and has a Logistics Performance Index health score of 51.

There are just 16.68 hospitals per million inhabitants in Hungary and 3.4 physicians for every 10,000 residents.

3. Latvia – Healthcare score: 2.5/10

Latvia is one of the lowest-scoring countries on our list, scoring 2.5 out of 10 for the factors we considered.

Latvia’s yearly spending on healthcare per capita is $2,039 and its Logistics Performance Index health score is one of the lowest on our list, at 72. Latvia has 31.87 hospitals per million inhabitants, and 3.3 physicians per 10,000 of the population.

General Assembly Mulls Proposal to Create Grant-In-Aid Committee

From Town Square Live

A bill released from the House Administration Committee Wednesday would create a committee to review grants for nonprofit organizations and make recommendations to the Joint Finance Committee.

Grant-In-Aid is an annual appropriation made by the General Assembly to support the activities of non-profit organizations in the state. The funds are intended to provide supplemental resources to service agencies.

Applications for Grant-In-Aid funding are currently reviewed and approved by the Joint Finance Committee, which is also responsible for drafting the state’s operating budget.

The General Assembly also passes a Bond Bill each year. That bill allocates funds for community groups and local organizations to perform capital improvements. Bond Bill funding applications are reviewed and approved by the Capital Improvement (Bond) Committee.

House Substitute 1 for House Bill 93, sponsored by Rep. Ruth Briggs King, R-Georgetown, would create a new committee that mirrors the work of the Bond Committee except it would be responsible for drafting the Grant-In-Aid bill.

“Each year we invest millions of dollars of taxpayer dollars into not-for-profit applicants,” said Rep. Mike Smith, R-Pike Creek, one of the bill’s co-sponsors. “Each year those requests increase and put more and more strain on the Joint Finance Committee to give appropriate review.”

Smith said the result is allocations have become “more subjective than objective.”

This year, the Joint Finance Committee received 380 applications totaling $34 million in Grant-In-Aid requests. Twenty-nine of those organizations are first-time applicants, which require additional review from the committee.

“I just think we can be better stewards of the tax dollars and the services that our state provides,” Smith said. “I think by creating a Grant-In-Aid committee, we’d provide more transparency to our tax dollars and allow things to be more efficient and effective.”

House Majority Leader Rep. Valerie Longhurst said the bill is “actually a good bill – it’s a good government bill.”

“There are so many applications and people don’t have the opportunity to dive into and really understand them and I think that this is a better way of handing out our dollars in our state government,” she said.

Longhurst recalled the House passing a nearly identical bill years ago which passed unanimously in the House but never received a hearing in the Senate.

“It didn’t go anywhere in the Senate for a lot of different reasons,” said House Speaker Pete Schwartzkopf, D-Rehoboth. “There are some people that don’t want to give up their duties.”

Schwartzkopf said he was on the Joint Finance Committee for four years and the Grant-In-Aid bill was always “an afterthought” once the budget was completed.

If made law, members of the committee would receive additional compensation equal to that which members of the Joint Legislative Oversight and Sunset Committee receive.

State representatives and senators in Delaware receive a base annual salary of $45,291. If passed, members of the proposed Grant-In-Aid Committee would earn an additional $3,852 annually. The chairperson and vice-chairperson would receive an additional $4,578 annually.

The committee would be composed of three senators appointed by the president pro tempore and three members of the House appointed by the speaker. At least one senator and one representative would have to belong to the minority party.

Average Closing Costs By State

From Realtor Magazine

As home prices and mortgage rates are increasing, so are closing costs. The average payment for mortgage closing costs for a single-family property was $6,905 in 2021 (including transfer taxes), a 13.4% annual increase, according to CoreLogic’s ClosingCorp, a real estate closing cost data and technology resource.

The average price of a home in the U.S. rose by more than $50,000 last year, while the average purchase closing cost climbed by $818, including taxes, and by $390 when excluding taxes, according to the report.

“As the mortgage industry comes off two years of record-low interest rates and red-hot consumer demand, lenders are now pivoting to address increasing headwinds from higher loan origination costs and lower origination volumes,” says Bob Jennings, an executive with CoreLogic Underwriting Solutions. “The Mortgage Bankers Association recently reported lender origination costs show a 13.2% year-over-year increase, which corresponds closely to the 13.4% increase we were seeing on purchase mortgage closing costs. As the market tightens in 2022, it will be interesting to see how lenders and borrowers respond and how these key metrics move.”

The states with the highest average closing costs in 2021 (including transfer taxes) were Washington, D.C. ($29,888), Delaware ($17,859), New York ($16,849), Maryland ($14,721), and Washington ($13,927), according to the report.

On the other hand, the states with the lowest closing costs (including transfer taxes) were Missouri ($2,061), Indiana ($2,200), North Dakota ($2,501), Wyoming ($2,589), and Mississippi ($2,756).

Creating Inspector General’s Office in Delaware becomes bipartisan effort

From: Bay to Bay News

DOVER — A push to create a watchdog Inspector General’s Office took a significant step forward as Democratic and Republican lawmakers continued to unite Wednesday.

State Rep. Mike Smith, a Newark Republican, signed on to be co-prime sponsor with Rep. John Kowalko, a Newark Democrat, on House Bill 405, ending his own bid to do the same through proposed legislation. Multiple members of both parties support the bill and Rep. Kowalko said he’s heard no opposition to it.

“I think (Rep. Smith’s) addition sends a signal that both parties are interested in one thing and that is honest, transparent government, which in turn, will promote good government, right,” he said Wednesday.

“That’s what the public wants. It’s what the public deserves.”

In a statement, Rep. Smith said that “Good government and transparency are at the heart of the public’s interest.

“Those are not partisan ideals so I’m glad to be joining efforts with Rep. Kowalko and thank him for his partnership to support a more efficient, effective, open and transparent government and to make our state government more accountable to every constituent up and down the state.”

The proposed legislation, which awaits discussion in the House Administration Committee, would:

• Investigate the management and operation of state agencies to determine if there has been waste, fraud, abuse, mismanagement, corruption, or other conduct that is harmful to the public interest.

• Coordinate with other agencies, recommend corrective actions and statutory revisions, and, if necessary, make referrals to law enforcement.

• Provide reports to the governor, attorney general and General Assembly, and these reports will be available to the public on the OIG website.

Rep. Kowalko gave credit to Delaware Coalition for Open Government’s Nick Wasileski for, among other contributions, gathering information from other states and their Inspector General’s Offices.

Mr. Wasileski credited coalition members for their work as well, noting “We’ve been raising awareness for the need of an inspector general for more than three years.”

According to Mr. Wasileski, DelCOG felt “it would be very important to include mismanagement and neglect of office because a lot of times things that occur in the state may not rise to the level of a crime, but they do harm Delawareans.”

Utah tops economic competitiveness report again

From: The Center Square

Utah tops the American Legislative Exchange Council’s (ALEC) list of the country’s most competitive states for the 15th year in a row.

 The annual report bases its rankings on 15 factors including the state’s tax burden, legal system, minimum wage, size of government and public debt.

“Utah has a strong track record of pro-taxpayer reforms in recent years, including the adoption of a flat personal income tax rate, pension reform for its previously endangered system, and the state’s innovative approach to property tax reform,” the authors wrote.

The state ranked second for economic performance.

The review showed over 97,000 people have moved to Utah between 2011 and 2020. The most significant uptick in migration took place between 2016 and 2020.

“Americans continue to vote with their feet toward states that have lower tax burdens and value economic competitiveness,” said Jonathan Williams, ALEC chief economist and one of the authors of the review.

Utah’s top marginal personal and corporate income tax rate, which represented any local taxes and impact of federal deductibility, was 4.9%. Its personal income tax progressivity, which is the change in tax liability per $1,000 of income, was $0.32 and ranked 12th.

Utah lawmakers enacted several pro-taxpayer reforms in the past few years including a flat rate income tax.

“If you believe incentives matter, and I do, state policies have the effect of changing those incentives at both the state and local levels,” said Dr. Arthur Laffer, a co-author of the report. “Those changes in incentives have consequences.”

The state’s property tax burden per $1,000 of personal income was $24.31, which was 14th overall. The sales tax burden, also per $1,000 of personal income, was $25.18, and the remaining tax burden was $16.10 per $1,000 of income, according to the report.

Utah does not levy an estate or inheritance tax.

The state’s tax expenditure limit, which measures the influence of tax and expenditure limits on state tax revenue and spending, ranked 15th.

Overall, the review showed the most significant ways states succeed in attracting new residents are cutting taxes, paying down debt and maintaining free market policies, according to the report.

“This study has had a big impact on what state officials, governors and legislators are doing,” said Stephen Moore, one of three authors of the report. “This is a magic moment for tax reform at the state level. I think even in some of these blue states that have been traditionally very liberal, they’re looking at reforms that could really make their states more prosperous. I think the direction is good, and I think a lot of that direction is a result of the Rich State, Poor State rankings.

Other states that made the top five were North Carolina, Arizona, Oklahoma, and Idaho. At the bottom were Minnesota, Vermont, California, New Jersey, and New York.

Drug Use by State: 2022’s Problem Areas

From: Wallet Hub

Drug abuse has a long and storied history in the United States, and we’ve been “at war” with it since 1971 under the Nixon administration. Yet despite the country’s best efforts to fight it, the problem is getting worse, and is exacerbated by the COVID-19 pandemic. There were over 100,000 drug overdose deaths in the 12-month period ending in April 2021, up 28.5% from the previous year. It’s crucial for the government to address this issue and prevent it from getting any worse.

Given the uncertain future and lack of significant progress to date, it’s fair to wonder where drug abuse is most pronounced and which areas are most at risk. This report attempts to answer those questions by comparing the 50 states and the District of Columbia across 21 key metrics, ranging from arrest and overdose rates to opioid prescriptions and employee drug testing laws.

Highest Drug Use by State