In The News

Judge rules Delaware property tax system unconstitutional; major changes to residents’ bills could follow

From The News Journal

A judge has ruled that Delaware’s property tax system is unconstitutional, potentially triggering significant changes in annual tax bills for the first time in decades.

Vice Chancellor J. Travis Laster wrote on Friday that all three counties calculate tax bills with property values that are so outdated some taxpayers get an unfair discount while others pay taxes on a larger share of their property’s actual worth.

Those inequities violate the state constitutional requirement that property owners be taxed equally, Laster said in a 149-page ruling in Delaware’s Court of Chancery.

“By continuing to use the decades-old valuations when preparing their assessment rolls, the counties treat owners of similar properties differently,” Laster wrote.

The ruling could eventually affect every property that is taxed in Delaware, and begins a debate on how to make the state’s property tax system fair in the eyes of the courts.

Laster’s opinion asks attorneys for both sides to submit a schedule in 45 days to govern that discussion, which is likely to be litigated in court before any residents see changes to their tax bills

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Open letter to Gov. Carney from business leaders

From Delaware Business Times

Dear Governor Carney: 

Since the beginning of the COVID-19 pandemic and the necessary restrictions on economic activity enacted by the State, The Delaware Business Roundtable and the Delaware State Chamber of Commerce have been working together to provide our assistance to safely and responsibly enable a phased reopening of Delaware’s economy. At the outset, we want to be clear that we believe any action to reopen the economy must follow public health guidance to be certain Delaware does not experience a resurgence and put additional pressure on the state’s healthcare system. 

We are writing today to offer two specific pieces of work: 

• COVID-19 Best Practices: This is a guidance document for Delaware’s business community, developed after surveying and discussing these issues with businesses statewide. We believe this document will provide a basic guide to businesses outlining essential activities they must consider as they execute a phased reopening. We are working to disseminate this document widely to our members and beyond; 

• Putting Delaware Back to Work: Economic Recovery in the First State: This is a series of strategic, long-term policy recommendations with consideration that the economic recovery from the pandemic will take far longer than any of us may have initially imagined. Thus, now is the time to make meaningful public policy changes and investments so that we can jumpstart efforts to create a higher skilled workforce, a streamlined regulatory approval process, easy access to broadband, and more. 

Many agree that the pandemic has brought to light some of the challenges Delaware faces in competing with other states for jobs, talent and investment. The goal is clear: we should act with urgency now! Why? So that in two or three years we can look back and assert unequivocally that in the midst of a national crisis Delaware leaders – representing both state and business interests – acted responsibly in the short term and also took the long view to put Delaware on a forward-looking, carefully considered path that resulted in economic prosperity for all Delawareans. We believe that, working closely with you and the General Assembly, many of the proposals articulated in the attached document should be enacted within the next 30 days as a means of generating jobs. As has been said before, we should never let a serious crisis go to waste; it’s an opportunity to do things we think we could not do before. 

Read the full letter here

Legislators Call On Governor To End State of Emergency Citing Alarming Problems

From First State Update

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Delaware poultry worker files federal charges against local union, claiming violations

From The News Journal

An employee at a southern Delaware chicken plant has filed federal charges against the workers’ union representative, claiming “union officials are violating his and his coworkers’ rights by seizing union fees.”

Oscar Cruz Sosa, an employee at Mountaire Farms’ poultry processing plant in Selbyville, has filed federal charges with the National Labor Relations Board against the United Food and Commercial Workers (UFCW) Local 27 union for threats and other violations of federal law, according to a press release issued Tuesday by the National Right to Work Foundation.

Sosa said the union seized union fees “under an unlawful forced dues provision in the union contract,” according to the release.

Sosa’s charges also allege that a union official visited Sosa at his home in March and threatened him for submitting a petition seeking a vote to remove the union from his workplace.

The charges come after a debate over decertification of the union, which union officials previously said represents about 800 employees at Allen Harim’s processing plant in Harbeson and 1,000 at Mountaire Farms’ processing plant in Selbyville. The local union also represents workers in other industries throughout the state.

Union spokesman Jonathan Williams said Mountaire Farms and the anti-union National Right to Work Foundation are behind that effort, but that the union’s current focus is on the safety of its members inside the facility.

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Delaware’s Labor Secretary warns unemployment taxes after COVID-19 could hinder recovery

From WDEL

Delaware Department of Labor Secretary Cerron Cade said Delaware could be providing over $50 million a week in benefits soon, and the bill that will be due afterwards could hurt economic recovery.

Speaking during a Facebook Live Listening Session on Monday, Cade said Delaware has handed out around $30 million in unemployment benefits in each of the past two weeks, and that number could rise as more groups become eligible to file for unemployment during the pandemic.

Cade said they’ve applied for a loan from the federal government to help and also are getting relief from the federal CARES Act.

“The [total] number could be $850 million over the next three months alone. But more realistically, the state’s share of that will probably be a little bit less, in terms of what we’re going to have to figure out and handle, but it’s going to be a big number.”

Whatever the final cost to the state ends up being, Sec. Cade said one issue is going to be refreshing that fund, which could come in the form of higher unemployment taxes as businesses will be trying to land on their feet after some have been hindered or closed for weeks and months.

“If the state and federal government don’t figure out how to address that number across the states–not just in Delaware–you’re going to see a lot of businesses and non-profit organizations struggle to pay unemployment taxes and struggle to hire people as we try to dig out of this hole.”

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University of Delaware faces multimillion-dollar budget shortfall as coronavirus slashes revenue

From The News Journal

Unexpected costs from the switch to online learning, along with revenue losses from closing campus and canceling events, have the University of Delaware figuring out how to overcome a $65 million budget shortfall, UD President Dennis Assanis said in an email Monday.

The economic downturn that has accompanied the coronavirus pandemic has affected universities across the country.

Since closing campus in early March, the school has seen a significant revenue loss after having to refund prorated housing, dining and parking fees. Early in the semester, travel restrictions reduced tuition revenue from international students. Canceled events and athletic programs have cut off expected revenue streams as well.

Federal stimulus funds, as well as cost-saving measures like closing dorms and academic buildings, have helped push the loss from $65 million to $50 million, said university spokesperson Andrea Boyle.

But in an effort to “tighten our belts,” she said, the university has also rolled out a number of other budgetary measures — namely, a hiring freeze that could impact the university’s approximately 850 adjunct faculty members.

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How will local leaders across Delaware respond to big budget gaps in wake of coronavirus?

From The News Journal

The effects of a coronavirus-driven economic crisis that is causing more than a half-billion-dollar hit to the state’s revenues will surely soon be felt in the pocketbooks of cities across Delaware, local officials said.

From lost parking revenue at Rehoboth Beach to utility payments that will never come from now-empty Newark college apartments, city, county and town leaders will face the possibility of cutting services or even the salaries of city workers.

Some, like New Castle County Executive Matt Meyer, say now is the time to keep people employed and even hire more, whether that means taking on debt or draining rainy day funds.

But others, like Wilmington Mayor Mike Purzycki, aren’t ready to make that jump.

Already in Wilmington, officials are combing through their proposed budgets for the fiscal year that starts July, looking to cut expenses as the likelihood of layoffs looms.

Among the first items on the chopping block are uniforms and equipment for next year’s Fire Department recruits, a chunk of the Police Department’s 20 planned new security cameras, college scholarships awarded by the Mayor’s Office and the grants of a few thousand dollars that it gives annually to sustain community nonprofits, officials said during ongoing budget hearings before the City Council this month.

“There’s a possibility that it’s going to impact everybody,” Purzycki said.

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Carney outlines criteria Delaware needs to meet to reopen economy

From Delaware State News

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Revenue losses could mean budget cuts, Delaware seeks more leeway from federal government

From The News Journal

Delaware’s state revenue forecast continues to plummet, and officials warn that they could have to make cuts to government programs if they can’t more freely spend the federal aid they received from Congress to fight the pandemic.

The state expects a $784.5 million decline in revenue over the next two fiscal years, based on the latest estimates reported on Monday by the Delaware Economic and Financial Advisory Council.

Much of that money had already been squared away in the governor’s spending plan for next fiscal year, which officials now expect to drastically rework.

The latest forecast could get more or less grim before the state finishes out this fiscal year. Lawmakers, who postponed the legislative session indefinitely in mid-March, have to pass a budget for the next fiscal year by June 30.

The forecast includes a $150 million hole in the budget that officials will have to find a way to fill before the end of this fiscal year, said Office of Management and Budget Director Mike Jackson. The state could dip into its reserves or postpone capital projects that haven’t started yet, he said.

“But if it gets worse, our measures will be stronger,” Jackson said, without offering specifics.

In Pennsylvania, about 9,000 state workers stopped getting paychecks earlier this month after their offices were closed amid the pandemic.

“All options are going to be on the table,” said Jackson, adding that Delaware is in a better financial position than other states because of its reserves. “What they (other states) may employ as a strategy to cope with fiscal challenges, we may not employ.”

When asked about potential pay cuts in Delaware, Carney said during a Tuesday press conference, “Our focus will be on protecting our state employees. … But we’re going to have to take whatever measures are necessary, obviously, to close the gap.”

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Delaware FY 2020 revenue downgraded by $400M amid crisis

From Delaware Business Times

DOVER – State fiscal analysts released their first look at the coronavirus’s economic impact on Delaware on Monday, when they estimated that the current fiscal year has taken a $416 million hit so far, now leaving a deficit of about $784.5 million in the governor’s nfe

With estimated general fund revenue of about $4.32 billion, the state would face a deficit of $150 million heading into next fiscal year – a stark turn from December when the Delaware Economic and Financial Advisory Council (DEFAC) estimated that the state would enjoy a $246 million surplus at the end of the year.

How that deficit is closed isn’t something that DEFAC, a non-partisan group of business and community leaders, academics, and government professionals that sets the state’s official revenue estimates, is tasked to consider, but the state does have reserve funds in tow for such an emergency. The larger question will be how the state contends with an expected downturn in revenues through next fiscal year, which runs July 1, 2020, to June 30, 2021.

Read more:

https://delawarebusinesstimes.com/news/budget-downgrade/