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.
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.”
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.
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.
WILMINGTON – A new state advisory group intends to increase Delaware’s spotlight as a science and technology innovation hub, helping the state remain competitive in the region for growing and relocating companies.
The Science & Tech Advisors Group, announced Dec. 30, consists of representatives from Delaware’s top tech companies, industry organizations, institutions of higher education and state government. It will be chaired by Patrick Callahan, co-founder of the Delaware Data Innovation Lab and CEO of Wilmington data analytics firm CompassRed.
As the First State’s spotlight grows under an impending President Joe Biden, Callahan told Delaware Business Times that there is a “huge opportunity to really take this to the next level.” Organization of the new group that was sought by Delaware’s public-private economic development agency, the Delaware Prosperity Partnership, took several months behind the scenes in 2020, but it has been a goal for Gov. John Carney since he announced his transition plan four years ago.
Callahan credited J. Michael Bowman, state director of the Small Business Development Corp. and chairman and president of the Delaware Technology Park, an innovation hub near the University of Delaware, for setting the foundation that the group hopes to build on. With startups growing rapidly, an established group of big-name companies and fertile training grounds at UD and Delaware State University, Callahan said that Delaware is poised to benefit.
“I hate to say this, but the pandemic sort of brings an eye toward the need for this type of industry in our region,” he said. “It seems like it’s the perfect timing for all this to really take off.”
2020 was one of the worst years in modern American history for small businesses. And now, thanks to a wave of minimum wage legislation that kicked in on January 1, things are about to get even worse.
Make no mistake: small business owners are already seriously hurting.
When state and local governments responded to the outbreak of COVID-19 in the spring with harsh lockdowns and restrictions, businesses were forced to shutter. Many in the restaurant and hospitality industry remain shut down many months later, or were briefly allowed to reopen then shut down again this fall. Meanwhile, much of the taxpayer-financed aid meant to help these businesses was instead captured by big corporations or lost to fraud and waste.
To add insult to injury, thousands of small businesses were vandalized and looted during the summer unrest after the death of George Floyd. (No, insurance doesn’t eliminate the harm).
At least 100,000 small businesses that were forced to close in 2020 will not reopen, according to Yelp. In a recent survey, almost 60 percent of small business owners said that they don’t expect their enterprise to survive through June 2021.
Many of these same small businesses teetering on the brink of collapse are about to get slapped in the face with surging labor costs. A total of 20 states had minimum wage hikes take effect this month as part of scheduled ramp-ups.
WILMINGTON — As Gov. John Carney rolled back indoor dining back to Phase 1 requirements of 30% of indoor capacity to slow the spread of COVID-19, Delaware’s restaurant industry faces difficult decisions this winter amid an estimated $900 million loss through the pandemic.
“Look, it means that full-service restaurants that rely on that in-person dining experience will be hit hard,” Xavier Teixido, owner of Harry’s Hospitality Group, told the Delaware Business Times. “You cannot make money at 30% capacity. The No. 1 decision restaurants are going to face is the value in staying open with staff there to serve 30% of the guests that were allowed versus the hit in closing restaurants.”
Gianmarco Martuscelli, owner of Klondike Kate’s in Newark and La Casa Pasta in Glasgow, said the industry was “disappointed” by the renewed restrictions. Martuscelli, who serves as treasurer for the Delaware Restaurant Association board, said that owners had hoped for a curfew, like Maryland has instituted, rather than reduced capacity because it would allow them to retain more of their dinner business. Now, however, some owners are deciding whether to scrap indoor dining altogether and return to curbside takeout only, he said.
Since June, Delaware has been operating in Phase 2, allowing 60% capacity of fire code capacity in restaurants although bar seating was restricted in many Sussex County beach communities in the height of summer. Carney eased those restrictions on beach bars in September — allowing patrons in if they reserved a seat and ordered food — and lifted them entirely this month ahead of winter.
Lisa DiFebo-Osias, owner of DiFebo’s Restaurants in Bethany and Rehoboth beaches, said her anger comes when she walks into a store and sees employees without masks on because they did not want to wear them. In comparison, the DiFebo’s staff works eight-hour shifts while wearing N95 masks without taking them off once.
DOVER — Delaware’s unemployment rate rose again in October, the fourth straight month it has increased.
Data released Friday by the Delaware Department of Labor estimates 3.7 percent of the state’s workforce was not employed last month, up .2 percent from September, Delaware’s unemployment level has surpassed the U.S. rate for the first time since December 2017.
The First State’s unemployment rate hit 3.2 percent in April, remaining there for three months before it began climbing again. The national rate has fluctuated since then but now sits at 3.6 percent, an increase of .1 percent from the month before.
“Unpublished unemployment data from the Delaware Current Population Survey using 12-month averages show that the share of job losers has increased to 75 percent of the unemployed from just under 40 percent one year ago,” Tom Dougherty, the acting chief for the Office of Occupational and Labor Market Information in the Department of Labor, wrote in a commentary released with the numbers Friday.
The judge overseeing a landmark property tax lawsuit said on Friday that he felt officials from the state’s three counties were “manufacturing excuses” in delaying a resolution to the litigation.
The parties all agree that resolution will be the reassessment of property values used to calculate property taxes statewide, values that Chancery Court Vice Chancellor J. Travis Laster ruled were unconstitutional earlier this year.
But the education activist plaintiffs that brought the suit and Laster disagree with the counties in the form and timing of how that reassessment occurs, according to testimony Friday during a status hearing regarding debate on how to fix the system.
The plaintiffs want the counties to end the litigation by agreeing to a four-year plan for reassessing property values, plans that each of the counties commissioned from experts and submitted to the court recently.
But attorneys for the counties on Friday asked the judge not to bind them to those plans and instead to put court proceedings on hold while they explore different ways to do a reassessment. That could include asking the General Assembly to approve laws to govern statewide reassessments in the future.
In response, Laster accused the counties of holding up a plan to fix the problem.
“My perception is that there’s been backsliding going on on the county side,” Laster said.
The disagreement means he will order another trial proceeding over how the court will require the counties fix the tax system, and a final plan for the reassessment may not be sorted out before March or April.
“I am disappointed in where we stand,” Laster said. “I don’t feel like things are going swimmingly.”
In May, he ruled that the lack of a reassessment coupled with the counties’ current methods of assessing property values creates a system unfair to the point it violates provisions in the state’s Constitution that require property owners to be taxed equally. He then put the litigation on hold for several months as the COVID-19 pandemic grew.
In October, each of the counties told Laster they were optimistic about reaching a settlement to finalize a plan for reassessment based on proposals created by reassessment experts that would ultimately yield changes to property tax bills in 2024.
It is unclear from the hearing testimony on Friday why the three counties’ position has changed since October.
DOVER — While most of the country is caught up in the outcome of the presidential election, state government continues to function.
The Office of Management and Budget has begun its preliminary budget hearings for various state agencies and related entities, part of the annual process of crafting a budget proposal.
Working with his financial team, Gov. John Carney will unveil recommendations for a spending plan in January. That outline will look quite different from the one proposed at the beginning of this year, with COVID-19 causing revenues to dip, while creating new expenses.
Over the next week-and-a-half, various departments and related entities that rely on state funding, such as higher education institutions, will make their formal presentations to financial officials. These are being held remotely, a reminder of the ongoing pandemic.
The University of Delaware, which presented its request to budget officials Tuesday, projects a deficit of $228 million to $288 million for the fiscal year ending June 30. The institution has reduced discretionary spending, offered retirement packages to staff, cut salaries for some employees, reduced positions and pulled about $100 million from its approximately $1.64 billion endowment.
“The hard reality is that the financial difficulties facing UD — and all higher education institutions — are not a one-year event, and the road to recovery will extend over the next several years,” President Dr. Dennis Assanis said in prepared remarks. “We are already looking toward the challenges for (fiscal year 2022), including a reduced ability to recruit new students, a continuing need to increase student financial aid and the uncertainties of the economy and its effects on our students and their families.
“As you can see, to reduce our deficit we’ve tightened our belts, leaned on our endowment and even eliminated some of our core workforce. The university has very few cost-cutting options left to help us deal with the unprecedented challenges thrust upon us this year.”
