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What’s New

Good Intent Doesn’t Guarantee Good Outcomes

Companies in Delaware may soon reach a breaking point. Recent legislation from Dover has made the First State less favorable for business, through various taxes, regulations, and other “bad business” bills.

These actions have been in the pursuit of a better standard of living for Delawareans, but could they be the ones at risk?

Delaware’s franchise tax, corporation income tax, and taxes on limited liability companies, limited partnerships, and general partnerships can add up to a big problem for businesses, who may owe more than one of these to the state. Add in a minimum wage increase and bottom lines come into question.

Unfortunately, the answer to this has been to replace workers with robots. McDonald’s has order stations, grocery stores feature self-checkouts, and a few Walmart stores in Delaware have brought in autonomous floor cleaners, or “Auto-C’s.” Technology has begun to replace what has become an expensive workforce.

Businesses are not in the wrong to take these actions—in fact, they are doing what is best for business, and therefore best for the employees they are able to retain, as well as the communities they serve. However, it does result in minimum and low-wage workers facing layoffs as companies seek to protect their own operations against the assault from our legislators.

At the end of the day, the decisions from Dover have hurt the people they were intended to help.

Ben duPont, Chris Kenny launch ‘non-partisan’ advocacy group

From The Delaware Business Times

Chris Kenny, president and CEO of The Kenny Family ShopRites of Delaware, and Ben duPont, philanthropist and entrepreneur, today announced the formation of A Better Delaware, a “non-partisan grassroots organization” that will advocate for pro-growth, pro-jobs policies and greater transparency in government.

“I speak with employers and workers every day who share my concern about Delaware’s business climate and our competitiveness with other states,” said Kenny, who operates six ShopRite stores in the state.

Zoe Callaway, a recent graduate of the University of Delaware, will serve as executive director. She told Delaware Business Times that the advocacy group will focus on fighting regulations and high-tax policies, including new income tax brackets and the real estate transfer tax.

 

Read more:

https://www.delawarebusinesstimes.com/local-leaders-launch-advocacy-group/

Business Haven or Business Has Been?

Delaware has long maintained a reputation as a business haven but that may soon change.

A new study from WalletHub ranked Delaware as the 7th worst state to start a business and in the bottom ten for business climate. This is nothing new.

According to the Federal Reserve Bank of Philadelphia, Delaware’s business conditions recovered from the Great Recession at a noticeably slower pace than the rest of the nation, taking three more years to stabilize than the average. During that recovery period, the state’s real GDP (the change in real GDP from 2009 to 2013) was approximately -2%, while the national average was closer to +8%.

Delaware’s recovery still leaves something to be desired by many. At a Delaware Business Roundtable (DBT) panel in June, former Delaware Economic Director Alan Levin expressed his concern, stating, “I want to get to the point where…people are knocking on our door saying, ‘I want to come to Delaware because we see things are happening here.’ That’s not really happening…Until legislators and the administrators… realize that their most important thing is to serve the people as opposed to getting re-elected…things are not going to change.”

It is time to create this change. At this point, we stand at a critical juncture for our economy. It is time to make decisions with the future in mind instead of putting elections above Delawareans.

As we prepare for the second half of the 150thGeneral Assembly, it is time to demand better practices and legislation in Dover that promote a better business climate and strengthen our economy, such as Governor Carney’s “Rainy Day Fund” included in the FY 2019 and FY 2020 budget appropriations.

Delaware has the industries, bond ratings, and location needed to be business-friendly again and have a robust economy, if legislation from Dover allows it.

The First State can be a leader in business again if we take the right steps forward.

 

Delaware launches new ‘One Stop’ business registration site

From Delaware State News

DOVER — After about three years of collaborative multi-agency work and an approximately $1 million investment, the state launched Delaware One Stop — a website that pulls all the business registration, licensing and other obligations and resources into one place for companies looking to open their doors in the state.

Dana Rohrbough, the director of Government Information Center, says they’re still making tweaks to the site, which is in a soft-launch phase that started mid-August, as they receive user feedback. Ms. Rohrbough says the site is technically a full revamp and relaunch of an earlier “one-stop” resource from 2005.

Read more:

https://delawarestatenews.net/business/delaware-launches-new-one-stop-business-registration-site/

Robots show up in Delaware’s Walmarts

From Delaware State News

MILFORD — Over the past month, Delaware Walmart shoppers may have caught a rather surprising glimpse of a floor scrubbing machine driving itself up and down the aisles.

In July, the Camden, Milford and Middletown Walmart stores all got autonomous floor cleaners, or “Auto-C,” as they are known.

According to Walmart spokesman Ragan Dickens, these are just the most recent robots the retail giant has introduced in its stores in the state. Walmart began testing several types of robots in their stores across the country in 2018.

Read more:

https://delawarestatenews.net/business/robots-show-up-in-delawares-walmarts/

A proposed tax, just for one nonprofit: Behind the DE Turf bill

From Delaware Online

A new hotel tax in Kent County, if it gets final approval, would benefit the DE Turf athletic complex. Reporters Karl Baker and Sarah Gamard looked into this story with a series of articles.

Connections don’t mean conflict of interest, brothers say

Pushed by Dover Sen. Trey Paradee, the tax law that could inject nearly $1 million a year into DE Turf in Frederica has a notable beneficiary – a private development championed by Paradee’s brother. They both strongly object to any idea that this was intentional.

Read more:

https://www.delawareonline.com/story/news/local/2019/08/22/behind-de-turf-bill-new-tax-just-one-nonprofit/2060073001/

Gov. Carney announces new Downtown Development District designations

From Delaware Business Times

Clayton, Delaware City, Middletown and New Castle on Monday were designated Downtown Development Districts, joining Dover, Georgetown, Harrington, Laurel, Milford, Seaford, Smyrna and Wilmington.

Private construction projects within these districts can receive rebates of up to 20 percent of their capital construction costs,from this year’s $8.5 million pool of state funding.

“The workforce of the future wants interesting places to live in and cool things to do,” Gov. John Carney said at a Aug 19 announcement ceremony in Delaware City, also calling the state program “one of the most successful” that he has known in his nearly 30 years in state and local government.

Read more:

https://www.delawarebusinesstimes.com/downtown-development-districts-auguest-2019/

Viewpoint: Why Delaware’s economy will remain constrained

From Delaware Business Times

Editor’s Note: The authors participated in our first Delaware Dialogue, published in the July 23 issue, and offered to write the following on the state of Delaware’s economy.

Over the past 10 years, using the standard measures — e.g., output, employment, personal income, annual wages and median household income — the Delaware economy has been performing poorly. Even Delaware’s low unemployment rate, the 11th-lowest among the states, is due primarily to slow growth in the state’s labor force.

Will these slow times pass? After all, the Delaware economy has been hit with some major blows: the closing of two automobile plants, the downsizing of DuPont and AstraZeneca, and the impact of the 2008 Recession on the financial services industry.

Read more:

https://www.delawarebusinesstimes.com/economycaesarrodneyview/

First State begins looking at sugary drink tax

From Delaware Public Media

The Delaware Department of Health and Social Services is in the early stages of examining the possible effects of a statewide tax on sugary beverages.

Cities like Philadelphia, Seattle and Berkeley, California have passed soda taxes. Chicago passed and then repealed one.

The American Academy of Pediatrics and the American Heart Association earlier this year issued a joint statement supporting a tax on sugary beverages, limiting marketing to children and financial incentives for choosing healthier options.

Read more:

https://www.delawarepublic.org/post/first-state-begins-looking-sugary-drink-tax

Proposed Dover lodging tax takes big step forward

From Delaware State News

DOVER — Dover Councilman Tanner Polce called it a “call to action and a full-court press.”

That’s after he learned the General Assembly had authorized legislation to allow Kent Levy Court to establish a tax on hotels and similar establishments — and to then direct that revenue to the DE Turf sports complex.

That bill, which passed on June 30, enables Kent County to place a tax of up to 3 percent on hotels, motels and tourist homes — including those in the city of Dover — with the proceeds designated for the Frederica-area sports complex.

Read more:

https://delawarestatenews.net/news/proposed-dover-lodging-tax-takes-big-step-forward/