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What’s New

Why the Delaware Way could prevent livestreaming of General Assembly

From The News Journal

The so-called “Delaware Way,” the bipartisan tradition in which First State politicians make decisions and work out tensions behind closed doors, could get in the way of the latest efforts to increase transparency.

In a state that’s been frequently criticized as having one of the least transparent governments in the country, a group of mostly Republican lawmakers is proposing that the General Assembly start recording its public meetings and posting them online for anyone to watch.

It’s something that the vast majority of states and several of Delaware’s local governments, in some capacity, already do.

But one of Delaware’s highest-ranking lawmakers, who controls the 41-member House chamber’s schedule, could try to block the effort over fears that private conversations could end up being recorded.

“I’m not too crazy about it,” said House Speaker Pete Schwartzkopf, D-Rehoboth Beach, when asked about livestreaming. “I’m not putting cameras and microphones installed in our caucus rooms because we’d be at the mercy of anyone who’d want to tap into it and listen to us have our discussion.”

The bill does not mention recording private caucus meetings, which take place in some of the same rooms used for public meetings. Those caucus meetings are about as common as public meetings when the General Assembly is in session.

The proposal, House Concurrent Resolution 69, would create only a blueprint for how to livestream public floor debates and committee meetings in the General Assembly. Lawmakers would have to introduce a separate bill to actually execute it.

Read more:

https://www.delawareonline.com/story/news/politics/2020/02/14/delaware-lawmakers-lack-transparency-could-prevent-livestreaming/4543708002/

Bloom’s latest blemishes: Delaware job cuts and multimillion-dollar ‘accounting error’

From The News Journal

Bloom Energy, the Silicon Valley company subsidized by Delaware, blamed an “accounting error” for misstating the amount of money it made in recent years.

Startling investors, Bloom said its revenues over the past four years are off by “less than 10 percent,” a limit that amounts to nearly $200 million.

“The adjustment has no impact on Bloom’s total cash,” said the company, which builds fuel cell electricity generators at a plant in Newark.

Released after stocks stopped trading on Wednesday, Bloom Energy’s statement follows rumors of layoffs at the company’s Delaware factory. Asked last week whether the claims were true, Bloom spokeswoman Natalia Blank said “some specific roles in Delaware were eliminated” because of changes to its operations.

Blank said a “small percentage” of its total Delaware workforce lost their jobs, but declined to disclose the number. She revealed only Bloom’s current Delaware head count when combined with the number of people it plans to hire.

Read more:

https://www.delawareonline.com/story/money/business/2020/02/13/blooms-latest-blemishes-delaware-job-cuts-and-multimillion-dollar-accounting-error/4741488002/

Banning Dollar Stores Hurts Underserved Communities More Than It Helps

From The Foundation for Economic Education

According to the US Department of Agriculture, at last count, 12.7 percent of US census tracts fell under the banner of “low-income, low-access.” This simply means a large portion of that tract’s population lives more than one mile from a food store in an urban area or more than ten miles from one in a rural area.

Dollar stores exist in these areas because of the lack of direct competition. Economically depressed areas often struggle to encourage new businesses, like full-service grocers, and struggle to maintain the ones currently operating. Dollar stores fill a very real need for families across this country. If they didn’t, they wouldn’t exist.

By banning dollar stores, especially without the assurance of a full-service grocer, governments are limiting families’ options, forcing them to travel farther and longer to purchase things like tuna, sugar, Pampers, or other name-brand, discount items.

Sarah Nassauer summed it up in her article about Dollar General:

“Dollar General is expanding because rural America is struggling. With its convenient locations for frugal shoppers, it has become one of the most profitable retailers in the U.S. and a lifeline for lower-income customers bypassed by other major chains.”

This statement rings true for both rural and urban low-income communities.

Banning or limiting dollar stores does not, in turn, usher in an age of full-service grocery stores in underserved neighborhoods. It just means fewer options for those who live there.

Read the whole article:

https://fee.org/articles/banning-dollar-stores-hurts-underserved-communities-more-than-it-helps/

Most business incentives don’t work. Here’s how to fix them.

From Brookings Institute

In 2017, the state of Wisconsin agreed to provide $4 billion in state and local tax incentives to the electronics manufacturing giant Foxconn. In return, the Taiwan-based company promised to build a new manufacturing plant in the state for flat-screen television displays and the subsequent creation of 13,000 new jobs.

It didn’t happen. Those 13,000 jobs never materialized, and plans for the manufacturing plant have been consistently scaled back. Even if the project had gone through as planned, there is no way the Foxconn subsidy would have made money for the state, or provided earnings benefits for residents that exceed its costs. It now appears that few of Foxconn’s promises will be fulfilled, even though local governments have gone into debt over the project.

From 1990 to 2015, the size of these types of business incentives tripled. Foxconn-level incentives would escalate them another 10-fold, to 30% of state and local tax revenue. Such a surge threatens public services and the social safety net, turning a tool used to promote jobs and growth into a political and economic disaster.

Research suggests that at least 75% of the time, typical incentives do not affect a business’s decision on where to locate and create jobs—they’re all cost and no benefit. Furthermore, even when incentives do tip a location decision, they do not pay for themselves. They may create new jobs, but frequently they also bring in new workers from outside the city or state, which raises costs to public services that offset at least 90% of any increased revenue.

On average, only 10-30% of new jobs go to state residents who are not already employed. Only when new jobs increase employment rates—thus boosting local earnings and putting upward pressure on local wages—can they provide large and broadly shared local benefits.

https://www.brookings.edu/blog/the-avenue/2019/11/01/most-business-incentives-dont-work-heres-how-to-fix-them/

Delaware deserves a sustainable budget that curbs irresponsible spending

The state budgeting process begins in February, and groups like A Better Delawarefounded by Chris Kenny are concerned that it will once again force tax increases onto Delaware residents without improving their quality of life.

The budget increased by more than 130 million last year, yet Delaware still ranks 45th in the nation for fiscal health, based on the inability to pay its debts, according to a report from the nonprofit Truth in Accounting. State revenues only cover 96% of expenses, and that percentage continues to decline.

A budget that doesn’t cover normal expenditures year-to-year is not sustainable – that’s just common sense – and it’s time to take a hard look at a budgeting process that continues to fail Delawareans.

How the budget is made

The current budgeting process is not transparent, and doesn’t leave much room for voter input. It begins in January, when the Governor submits a recommended budget to the Joint Finance Committee.

The Governor holds a significant amount of power in the process, which results in a near-complete state budget before hearings even begin in February. The Joint Finance Committee then operates within strict limitations of that budget, with pre-allocated funds for schools, government agencies and more, and must find ways to fund any additional projects.

The easy solution for lawmakers is to take more hard-earned money from Delawareans – who are already owed billions in unpaid, unfunded pension debts – by increasing taxes.

Why it’s a problem

With a budgeting process that gives the Governor so much sway, residents need to be able to count on their leader to make decisions in their best interest. Delaware Governor John Carney approved large tax increases in his first year, including higher corporate franchise taxes, realty transfer taxes, alcohol taxes and cigarette taxes—totaling around $200 million annually.

It’s no surprise that Carney received a D-rating from the Cato Institute, a libertarian think tank based in Washington, D.C., on a recent report card of governors’ fiscal spending. When tax increases resulted in a surplus, Governor Carney allocated the money to new spending projects, instead of paying down the state’s unpaid debt, or returning the money to over-taxed residents.

Delaware’s money problems aren’t going anywhere, anytime soon. The state’s long-term debt liabilities are higher than the national average, and the unfunded pensions that have been promised to residents total $13.75 billion; more than triple the current total state operating budget. With rising unemployment rates, stagnant economic growth, and, according to policy nonprofit Tax Foundation, a poor business climate, now is not the time for our Governor to continue to spend, but instead to focus on genuinely improving the economic outlook in the state.

What needs to change

A Better Delaware, a pro-growth issue advocacy group, believes it’s time for Delaware lawmakers to actually address the ever-growing budget, instead of choosing to raise taxes.

By instituting a policy of data-based spending, lawmakers can use existing funds more efficiently, investing in programs that improve life for the state’s residents, provide more economic opportunity, and begin to pay down the state’s crushing debt.

It’s time for a real solution. Delawareans deserve responsible budgeting of their money, a budget that can weather an economic storm, and better choices from their Governor to ensure a brighter future for the state.

To learn more, sign up for the A Better Delaware email newsletter at abetterdelaware.org.

Wesley College to receive $3 million in state funding

From Delaware State News

DOVER — A state panel this week approved a request for $3 million from Wesley College, with conditions.

The funding is expected to help the college continue operations until it can come to an accord on a merger with another higher education institution, which could be announced in the coming weeks.

In November, the private school submitted a request for $3.2 million from the state’s Higher Education Economic Development Investment Fund. The group, which consists of the director of the Office of Management and Budget, the secretary of state, the co-chairs of the General Assembly’s Joint Legislative Committee on Capital Improvement and the controller general, previously awarded $2 million to the college in 2019.

Wesley also was given permission in the spring to move $1.375 million earmarked for it the prior year to renovate the former Dover library.

College officials were informed in the summer they would not receive any more funding without first submitting a long-term strategic plan to the state, which they have not done as yet.

Read more:

https://delawarestatenews.net/schools/wesley-college-to-receive-3-million-in-state-funding/

Why pro-business is not anti-worker

Supporting the economy isn’t a partisan issue—so why has it become one?

In Delaware, “pro-business” is frequently tied to “anti-worker,” but the opposite is true.

Who employs these workers that we want to support? Businesses!

By hurting these employers, workers and their families suffer lower incomes, less hours, and even layoffs.

Think of it this way: if the government passed a restrictive regulation on public housing, there would be an uproar about its impact on the recipients of that program and their access to housing. The move would be seen as one that hurts the people, or an “attack” on lower-income families.

The same is true with a restrictive regulation on business. In this instance, the providers are the companies, stores, and small businesses, while the good are the jobs they supply. Legislation that is anti-business is blatantly anti-worker and anti-jobs, and should be seen as a move that hurts the people as well.

It’s odd that a policy position that offers more jobs, better job security, higher pay, and higher government revenues divides Democrats and Republicans from the local level up through the Presidency. These benefits support groups that fall on both sides, including low-income families, middle-class families, communities, minority groups, children, schools, churches, and more.

In a better informed government, lawmakers would work across the aisle to support legislation that actually promotes job growth, supports businesses, and strengthens the economy, in an effort to work for the people, instead of duping them.

If our elected officials could agree on better fiscal policy, both sides would have the capability to help their respective communities, and the public would finally win in this political game, not to mention that more money would naturally go into the budget to support programs for education, health care, infrastructure, housing, and more.

So why is it so divisive? The answer is the same thing that causes most strife in governance: politics.

What is truly best for the people can make for bad headlines in the short-term and impact re-election or donor support.

“New Policy Erases Student Loan Debt for Millions Nationwide” is a far better headline for student loan forgiveness than what the headline for the true, long-term outcome would be: “Erasing Students Loans Cripples Economy as Trillions of Dollars go Unpaid.”

The next time you hear a lawmaker denounce a pro-business policy for being anti-worker or for putting business over the people, consider how a business can support its workers when their operations take a hit, and why both sides can’t align on this issue.

Prosperity Partnership’s project pipeline got a lot busier in 2019

From Delaware Business Times

One of the Delaware Prosperity Partnership’s core functions is to assist companies looking to relocate to Delaware or expand within Delaware, providing a range of support services from identifying potential sites, to providing detailed labor and business cost data, to connecting with key state agencies and local partners, to explaining and coordinating incentive options, and more.

DPP calls these engagements with prospective companies “projects,” and collects and analyzes data to better understand and communicate the types of projects that DPP works on, job creation potential, and more. These projects are all at different stages, from initial conversations to pending final decisions by the company. Projects that ultimately choose to locate or expand in Delaware are referred to as “located projects,” and are moved off this active pipeline, as are projects where DPP has lost contact with the company or the company chose a location outside of Delaware, all of which are referred to as “closed projects.”

DPP’s project pipeline grew considerably in 2019. In January 2019, DPP was working 49 active projects. These projects represented the potential for at least 3,302 new jobs, 922 retained jobs, and $186 million in capital investment. By December 2019, DPP was working 63 active projects, with the potential for at least 5,069 new jobs, 515 retained jobs, and $747 million in capital investment.

https://delawarebusinesstimes.com/news/delaware-prosperity-partnership-busy-2019/

Intern Delaware hopes to stem brain drain in state

From Delaware Business Now

Formed in September 2019 by local business leaders, the organization is focused on connecting interns working in Delaware with the local culture, economy, business leaders, and opportunities.

In the current environment, more than 70 percent of graduates from local colleges and universities are moving outside of Delaware to start their careers, creating a talent drain in the state, the group noted.

Intern Delaware will support companies throughout the state in attracting and retaining intellectual capital by providing their interns with a series of experiential marketing events that highlight Delaware and run parallel with their corporate internship programs.

“In our initial cohort, we are bringing over 350 like-minded individuals together from 21 corporate partners to experience Delaware,” commented Scott Malfitano, co-founder and board chair of Intern Delaware. “These interns will be provided access to signature events, discounts to local merchants, and opportunities to take part in a dynamic summer program designed to open their eyes to all that Delaware has to offer.”

Intern Delaware has initially collaborated with 21 local companies, along with local colleges and universities. Partner companies include Adesis, Agilent, Big Fish Restaurant Group, Buccini-Pollin Group, Capital One, Chemours, Christiana Care, CompassRed, CSC, DowDuPont, EDiS, Epic Research, Goodwill of Delaware and Delaware County, Highmark, Kelly Benefits, M&T Bank, Marlette Funding, The Mill, White Dog Labs, Wohlsen Construction Company, and WSFS Bank.

https://delawarebusinessnow.com/2020/01/intern-delaware-hopes-to-stem-brain-drain-in-state/

Delaware economy projected to shrink within 6 months

From the Philadelphia Fed

Commentary from A Better Delaware

In addition to higher unemployment and poor economic rankings, Delaware’s economy is projected to shrink within the next 6 months.

Delaware is one of only 9 states whose economy is projected to contract in that period.

“The leading index for Delaware was -0.7 in November. The state’s coincident index decreased, and building permits decreased in November. Additionally, the index of delivery times from the Institute for Supply Management’s manufacturingsurvey increased in November, while initial unemployment claims decreased. Overall, Delaware’s leading index forNovember suggests contraction in the state’s economy in the second quarter of 2020.”

Read the full report:

https://www.philadelphiafed.org/-/media/research-and-data/regional-economy/indexes/leading/2019/leadingindexes1119.pdf?la=en&fbclid=IwAR3dusBkbBP8P3m_DCMda_zhm-pjw_i6PC3T8VyVb6Xqq8deXmDb4YwPC1w