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In The News

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.

Read more

Carney outlines criteria Delaware needs to meet to reopen economy

From Delaware State News

DOVER – Widespread testing, along with a decline in the number of new coronavirus cases, will be needed for Delaware’s economy to gradually reopen.

Delaware Gov. John Carney said Tuesday that the state is following the guidance of the White House task force document “Opening Up America Again.”

That guidance has three phases, along with gating criteria to meet before beginning each phase.

The first check box is a decline in cases.

Delaware’s number of new cases, by day, had been dropping. However, there is some flaws in the timeliness of test returns that has to be considered.

“You can see on this bar chart that we are on a downward decline,” said the governor during his Tuesday press briefing.

The chart showed 248 cases on Friday, 215 on Saturday, 207 on Sunday and 186 on Monday.

The Delaware Division of Public Health reported 269 new cases for Tuesday. How the state will apply the case numbers in a trend is problematic because of the way results are reported.

“To get to the starting line, you need 14 days of declining cases,” said Gov. Carney. “We do have to factor in the fact that the test results we get back kind of aren’t even and consistent. So we might have to correct for that in our day-to-day analysis.”

Test results have taken anywhere from a few days to two weeks to come back, he said. The exception is that the state lab results arrive in 24 hours.

Another important part of the criteria is hospital capacity, and so far Delaware’s hospitals have been able to handle the demands of the coronavirus.

Additionally, Delaware will need widespread testing that allows public health to have a “rigorous contact tracking system,” the governor said.

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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/

State House, Senate leaders seek flexibility in using $1.2 billion in federal coronavirus funds

From Delaware Business Now

Delaware State House and Senate leaders from both parties are asking the state’s Congressional Delegation for help in getting more flexibility in using more than $1 billion in federal  coronavirus aid.

The authors of the letter noted that money from the  Coronavirus Aid, Relief and Economic Security (CARES) Act provides $150 billion directly to states, territories, tribes and localities to combat the public health and economic effects of the COVID-19 pandemic.

Delaware is expected to receive approximately $1.25 billion under the omnibus measure. The funds will be transferred to states during the next two weeks.

“The CARES Act provides vital funding, but it restricts the money to unbudgeted expenses related to COVID-19. It cannot be used to address states’ revenue losses. This is far too restrictive for states like Delaware to effectively apply the federal funds. Being able to use these dollars to shore up Delaware’s operating budget is critical to maintaining services and recovering from this unprecedented crisis,” the letter stated.

Read more:

https://delawarebusinessnow.com/2020/04/state-house-senate-leaders-seek-flexibility-in-using-1-2-billion-in-federal-coronavirus-funds/

Carney tells nonprofits there may be loss of $500 million to $1 billion in state revenue

From The News Journal

Gov. John Carney told leaders of Delaware’s nonprofits Thursday that with so many businesses closed, the state may lose $500 million to $1 billion in state revenue.

Because of that, he said he can’t be sure what will happen with the state budget.

Carney and Lt. Gov. Bethany Hall-Long fielded questions from nonprofits during a virtual town hall focusing on the effects of the coronavirus pandemic. It was organized by the Delaware Alliance for Nonprofit Advancement.

One of the questions asked was what they could expect in the 2021 budget, particularly as it applies to bond funding and the grants-in-aid that keep many of them afloat.

Carney said that picture is not yet clear. The state normally would be getting a lot of revenue from casinos and other businesses now ordered shut to slow the spread of the coronavirus.

Because of that, there could be $500 million to $1 billion in lost revenue.

He said he hopes the Legislature can come together to create a budget by June 30. He also noted that federal stimulus money cannot be used to make up for that lost revenue.

Read more

Rob Martinelli: Let’s balance protecting public health with jump-starting our economy

From Delaware Business Times

I’ve watched Governor Carney’s press conferences about Delaware’s response to the coronavirus COVID-19. The Governor and public health officials are doing a professional job of talking about the trends and letting us know where Delaware stands. They fear that the next two weeks will be frightening in terms of positive cases and are working to preserve the necessary capacity at hospitals for the sickest patients.

The Governor admits that the forecasts in this area may be conservative. He credits working with hospitals and says, “they’ve had great ideas…This has been a great partnership.”

All Delawareans are thankful for the heroic efforts of our health care workers and first responders. We are also thankful for the type of partnership and cooperation with the health community that the Governor mentions that exists to fight this pandemic.

This column was originally going to focus on the need for a similar level of cooperation and partnership to finding finding a way to get Delaware working again as soon as possible. And as you probably read on our website, we learned just before going to press that that’s beginning to happen.

There are some who agree with New Castle County Executive Matt Meyer, who has made the argument that the best way to restart our economy is to test every Delawarean who hasn’t been tested. Dr. Fauci was on the Today show April 9th and said that the antibody test would be available in large numbers within weeks.

Meyer knows that weeks of sheltering in place will do great harm to our economy. We are a small state that prides itself on getting things accomplished. If this is a viable option that can be done cost-effectively and quickly, it would be great if we could become the First State of testing.

But I’m equally heartened by the news that Doug Gramiak and Tom McGonigle – two people with a distinguished record of serving our state – have been informally asked by Governor Carney to look into ways that we might jump start our economy.

Whether it’s serendipity or part of their effort, I am hearing that business leaders across the state are building lists that will support the efforts of Gramiak and McGonigle.

“If there was ever a time for the business community to work together, this is it,” Delaware Business Roundtable Executive Director Bob Perkins told me on April 9. “Now is the time, for example, to put the Ready in Six initiative on steroids” to help encourage business retention and attraction.

I believe there are a number of ideas beyond streamlining the permitting process statewide that we should consider, including expanding broadband internet services statewide – particularly in light of the number of people who might continue to work from home after the crisis – and finding ways to help restaurants restore customer confidence once they can reopen.

Read more:

https://delawarebusinesstimes.com/news/presidents-notebook/

How were Delaware businesses deemed essential? Answers unclear as open records law paused

From The News Journal

Walmart is able to sell shoes and clothes at its Delaware stores during the coronavirus pandemic, but shoe and clothing shops cannot.

A Dover hemp store is permitted to remain open and sell cannabidiol, while a nearby competitor – which also sells the marijuana derivative, in addition to pipes and T-shirts – cannot.

And pet stores are open to regular customers while gun shops are seeing customers by appointment only. 

The question of how Delaware deemed specific businesses or industries “essential” during the coronavirus pandemic is being asked by a growing chorus of employees, business owners and customers.

Yet, Gov. John Carney’s administration has not provided clear answers. With Freedom of Information Act requirements rescinded during a state of emergency, the public may not know for a prolonged period of time how the state settled on the economic restrictions.

Responding to a ballooning health crisis last month, Carney declared a state of emergency in Delaware, and with it published a list of industries he would allow to remain open while others would be ordered to close.

On Wednesday, The News Journal sent Carney’s office a list of questions on the topic, including inquiries about specific exceptions to the state’s essential-business list.

In an emailed reply, Carney administration officials repeated past proclamations but did not directly answer each question. The response said the economic restrictions “are intended to prevent a surge in (coronavirus) cases, preserve our hospital capacity and save lives.”

The governor took advice from health experts and agencies outside Delaware while considering which businesses could operate while limiting the spread of the virus, and which products the public needs to be safe, they said in the email.

“The first priority has always been the safety of Delawareans. Within that context, we did our best to balance public health with keeping businesses operating when possible,” the email stated.

Despite the assurances, an outspoken owner of a Dover hemp and smoke shop called the government’s process of deciding essential businesses “arbitrary and unfair.”

Read more:

https://www.delawareonline.com/story/news/2020/04/13/how-were-some-delaware-businesses-deemed-essential-answers-unclear/2941347001/

COVID-19 Strategic Response Fund announces $350,000 in grants

From Delaware Business Now

In its first round of grants, the Delaware COVID-19 Strategic Response Fund awarded $350,000 to 11 nonprofit organizations providing services to communities throughout the state.

Requests totaled $3.9 million.

The fund is managed by the Delaware Community Foundation. Click here for  further information and to donate.

The grants will address a  range of community needs during the pandemic.

Grants awarded

    • Modern Maturity: $50,000 to deliver additional meals to seniors at their homes.
    • Brandywine Counseling: $25,000 to meet the increased demand for recovery services.
    • Family Counseling of St. Paul: $22,000 to meet the increased demand for family counseling services.
    • Westside Family Healthcare: $50,000 for telehealth equipment to provide care for prenatal and chronically ill patients.
    • YMCA: $50,000 for childcare for essential workers statewide.
    • Easterseals of Delaware & Maryland’s Eastern Shore: $29,000 for telehealth equipment to provide child intervention services.
    • CHILD, Inc: $36,000 to provide housing for battered women and their children, meeting increased demand because of social distancing requirements.
    • CHEER: $38,000 delivering additional meals to seniors at their homes.
    • Housing vouchers for the homeless: $50,000
    • Friendship House for New Castle County – $30,000
    • Community Resource Center for Sussex County – $10,000
    • Catholic Charities for Kent County – $10,000

In this first round, 95 applicants requested a total of $3.9 million. The initial awards represent 23% of the total $1.5 million raised to date for the COVID-19 Strategic Response Fund, which is housed at the Delaware Community Foundation (DCF).

The fund will award an additional $350,000 in grants this week.

The goal is for the fund, which launched March 18, to provide grants for several months, said DCF President and CEO Stuart Comstock-Gay, who chairs the fund’s decision-making council.

Read more:

https://delawarebusinessnow.com/2020/04/covid-19-strategic-response-fund-announces-350000-in-grants/

Delaware businesses look to state government for survival as COVID-19 stifles revenue

From The News Journal

Eric Williams, who runs Mispillion River Brewing in Milford, said he’s lost about 60 percent of its business after the state prohibited dine-ins at food establishments to prevent the spread of coronavirus.

That’s lead him to have to lay off 10 of his 14 workers.

Now, Williams is one in a group of about 200 businesses in the First State who have applied for loans from state government to stay afloat during the during coronavirus shutdown. Half of them have been restaurants, according to the Division of Small Business.

Williams hopes the loans, which Gov. John Carney announced two weeks ago, can help cover his operating expenses and free up money to rehire his workers. The loans were initially created for certain hospitality-related businesses, such as restaurants, hotels and brewpubs.

“If we can save four, five or six people from going on unemployment with the support of our community, then that’s good not just for us … but it is good for our economy,” Williams said.

Carney closed down businesses to try to stop the spread of coronavirus after a March 11 positive test for COVID-19 in a University of Delaware professor. As of Friday, Delaware had 450 positive cases and 14 deaths.

Even though the virus has stopped people from coming in to enjoy a pint, costs such as rent, utilities and the cost of ingredients for beer haven’t gone away. His brewpub is still casing and selling to customers.

“We need to have beer when we open back up,” Williams said. “Especially coming out of a winter, because we’re fairly seasonal.”

Williams said the loans are only a “piece of the puzzle” to help businesses. He asks that Delawareans buy local, get takeout from their favorite restaurants when they don’t feel like cooking, and make sure to practice social distancing wherever you go.

Read more:

https://www.delawareonline.com/story/news/2020/04/06/coronavirus-delaware-businesses-look-state-help-revenue-plummets/5099073002/