Sixty-seven percent of surveyed nonprofits said they need financial support to pay for the cost of personal protection equipment required by state order, and 52% of nonprofits who received Personal Paycheck Protection loans from the Small Business Administration will need more to retain employees, according to a survey of over 100 Delaware nonprofits by the Delaware COVID-19 Emergency Response Initiative.
But much of this funding will be gone by the fall.
The survey found that despite assistance from the philanthropic community and funds from the federal government, nearly a third of responding nonprofits have less than 10 weeks of available cash on hand.
Take Modern Maturity, which doubled its production when the pandemic began and went from delivering 1,500 meals a day to almost 3,000 for several weeks. Now, the center is back to 1,500 meals but has added services like phone check-ins to make sure the seniors are receiving care.
Employees also keep an eye on clients like Hutson. Recently, she told the carrier that her fan was broken during one of Delaware’s particularly hot weeks and the center provided her with one – free of charge – and set it up.
Only two things in life are certain: death and taxes. For Delawareans, this isn’t just an old adage, but real life.
Without caution from the people, this will not stop. Only the limited balance in the Delaware senate is currently keeping things in check—but only a little. Delaware’s tax increases over the last two General Assemblies (2016-2018, 2018-2020) were the 6th highest in the nation.
Delaware’s has the highest per capita revenue from corporate license fees and the fifth-highest per capita corporate income tax revenue. Corporate license fees accounted for 12.8 percent of Delaware’s state and local general revenue in 2017 (for comparison, the national average was 0.2 percent), but we risk losing this source of funding if we force businesses to incorporate out of state.
You’ll hear many people tout Delaware’s status as a “tax-free” state, but that simply is not the case. Yes, Delaware does not have the sales tax, but we more than make up for that. Take for example the reason why we are able to avoid having a sales tax: the gross receipts tax.
Delaware is one of only seven states with a gross receipts tax. These invisible sales taxes raise prices as these taxes are shifted onto consumers, and tend to impact lower incomes the most. Moving away from these economically damaging taxes can thus be a part of states’ plans for economic recovery.
As if that wasn’t enough, the state’s individual income tax burden is on the top half of the nation, with one of the highest individual income taxes. This has been an ongoing issue, but the impact of this tax will be felt harder as we continue operating under a COVID emergency order that has wrecked our economy.
Since 2016, Governor Carney approved large tax increases but he did not work alone. The taxes started as bills heard and voted on in Dover that were approved for his final vote.
These bills raised corporate franchise taxes, realty transfer taxes, alcohol taxes, and cigarette taxes. Delaware now has the highest real estate transfer tax in the nation and some of this highest excise taxes among all fifty states.
These tax increases were estimated to raise more than $200 million annually, the exact amount the state claimed was a “surplus” less than one year ago.Over-taxing residents is not a surplus or a celebration to commemorate with additional spending.
Have these measures even been worth it?
No. Delawareans get very little bang for their buck. Our taxpayer return on investment (ROI) is near the bottom nationally, despite having some of the highest taxes per capita. We spend more on education and health care than most other states, yet continue to see outcomes that put us in the bottom of national ranks.
Our representatives are not representing our best interests when they continuously raise taxes, taking money away from hard working Delawareans. The results speak for themselves, and what they’re saying is that it is time to change what we’ve been doing.
In November, Delawareans have a choice: taxed to death or death to burdensome taxes.
Delaware: banks, beaches, Biden. We’re the First State and the Diamond State—a small wonder. We are known by and for many things, but home means something different to everyone.
Delawareans take a lot of pride in our little state, and so do we at A Better Delaware. That is why we are working to improve the state for every Delawarean, and for our future.
Delaware is 34th nationally in the Best States to Live Inreport from WalletHub. A lot of things factor into that position.
Delaware’s quality of life ranked low at 47th nationally, based on indicators like the average commute time, access to public transportation, and more. The same report had Delaware’s economy at 38th, based on the unemployment rate, general tax-friendliness, entrepreneurial activity, and more.
Delaware has room for improvement on all of these indicators.
Improving these issues, either through legislative or regulatory change, would have a massive impact on the state. Not only would it be better for Delawareans to see these changes, but these measures would help to attract businesses into the state as well. Right now, Delaware plays a costly game of corporate welfare at the taxpayer’s expense, despite that being at the bottom of the listof what businesses look for when selected a location.
We consistently rank poorly nationally for unemployment, and are currently 36th for July 2020. There’s no amount of money that can be given to a corporation to hide our shortcomings in these important areas.
Even if a business does select Delaware, are we attracting workers?
Delaware ranks 29th overall for its affordability, and is even lower for its cost of living and housing affordability. That’s quite unattractive for prospective residents. We have one of the highest income taxes and Delaware’s real estate transfer tax being one of the highest in the nation. Even if we attract businesses and worker to the state, the extra thousands involved in buying a home may make the workers second-guess their decision.
It’s issues like this that need to be fixed in order to make our home a great place to be. Education, quality of the job market, a trained workforce and so much more are the key to improving Delaware.
Currently, our representatives and leaders are not working to truly improve Delaware. Every action seems like a band aid for a bullet wound, and Delawareans are tired of seeing their state crumble because of it.
Now is the time to critically think about the decisions that have been made in Dover, who is making them, and why. The 2021 Legislative Session could be the one to solidify these national standings and push us further down the path of our status quo, or could be the one that makes a decisive change that could put the First State back on top.
Delaware continues to see a slower recovery than its neighbors from the coronavirus pandemic.
The WalletHub website reports that the state ranked 19th in the decline in unemployment claims stemming from the shutdown of schools, businesses, and nonprofits from Covid-19.
Florida, which has been struggling with a surge in cases, ranked 51st. Two other states with a surge in cases, Texas and California, ranked 37th and 40th respectively.
Neighboring Pennsylvania ranked third in the decline of jobless claims, with Maryland seventh and New Jersey in the 10th spot.
Delaware saw a decline in its June unemployment rate, but ranked 10th from the bottom among the 50 states.
The hospitality industry has seen a sizable loss in jobs, even though the state was quicker to reopen than neighboring New Jersey and Philadelphia.
The state of Delaware and New Castle County have launched a new program that will offer $100 million in relief grants to small businesses and nonprofits across the state who have been affected by COVID-19.
The DE Relief Grants program will be funded by some of the state’s and county’s share of money from the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Delaware Division of Small Business director Damian DeStafano said during Gov. John Carney’s weekly press conference about COVID-19 Wednesday afternoon that the fund would be “at least” $100 million, but will be re-evaluated if the need is higher than anticipated.
The program is expected to reach more than 3,000 small businesses and nonprofit organizations with grants ranging from $30,000 to $100,000, a press release from Carney said.
The Division of Small Business will be taking applications in early September at delbiz.com/relief. Funding rounds will follow in October and November.
The site is live now, he said, and the division will be hosting online webinars about how to apply. DeStafano recommended that business owners and nonprofits sign up now in order to be alerted by the webinars.
The program is designed to reimburse people for changes required by COVID-19 or who want to make changes because of it, DeStafano said.
The grants can be used for:
Purchasing equipment to make a workplace suitable for COVID-19 safety (such as PPE, plexiglass, air purifiers, etc.)
Refinancing of debt incurred due to COVID-19 (including State of Delaware HELP loans)
Advertising efforts undertaken as a result of COVID-19
Fixed expenses the applicant accrued during COVID-19
The size of the relief grant will be based up the business or nonprofit’s 2019 revenue:
$0-$500,000: Up to $30,000
$500,000-$1 million: Up to $50,000
$1 million-$2.5 million: Up to $72,500
$2.5+ million: Up to $100,000
“Multiple programs are necessary to address the challenges Delaware’s small businesses face,” DeStefano said in the press release. “We believe this assistance, coupled with other efforts, including the Hospitality Emergency Loan Program (HELP) and the COVID-19 Customer Protection Standards, help make the difference for some of our small businesses.”
Press Release from our sister organization, A Better Delaware PAC
A Better Delaware has formed the A Better Delaware PAC to participate in the 2020 election cycle
Wilmington—A Better Delaware, a pro-business, pro-jobs group that also promotes more accountability and transparency in Delaware government today announced the formation of A Better Delaware PAC to expand their advocacy efforts into 2020 campaigns.
“We must apply pressure at the grassroots level. We must educate legislators in the State House,” says founder Chris Kenny. “But we will never see real change if we keep sending the same anti-taxpayer, anti-business lawmakers back to Dover, and we must protect legislative allies who understand what makes for a stronger economy.”
A Better Delaware (ABD) was launched last year in response to the direction our state was headed due to decisions made by our lawmakers in Dover. Kenny believed the state lacked a voice for taxpayers and small businesses, and recognized that the First State was far from first when it came to economic, business, and employment rankings nationally. In fact, Delaware was consistently in the bottom for fiscal stability, employment, business climate, and tax rates.
Since then, ABD has spoken out on numerous issues impacting Delaware’s business climate, transparency in government, taxes, the Certificate of Need process, and many others. In less than a year, it has gained a following on Facebook of nearly 10,000 people.
A Better Delaware PAC takes ABD’s efforts to the next level through direct voter contact during the campaign season to help ensure the election of pro-taxpayer, pro-business, good government candidates.
“For too long, Delaware campaigns have been dominated by special interests who stand to benefit from more government spending at the expense of taxpayers,” said Kenny. “ABD PAC will be a counterweight that backs candidates who put Delaware first.”
Delaware is going to spend $40 million to help residents who are struggling to pay rent or mortgages during the coronavirus pandemic.
Eligible renters and homeowners can get up to $5,000 in aid. The money would be paid directly to the property owner or mortgage servicer.
Gov. John Carney and the Delaware State Housing Authority announced Monday that the state is resurrecting the Delaware Housing Assistance Program to help people who are missing payments because they lost income due to the coronavirus pandemic.
The program was originally launched in late March but then halted a few weeks later because it was swamped with applications. At the time, they received requests from three times more tenants than they originally set aside funds to help.
The $40 million to pay for this program comes from the federal CARES Act, which Congress passed in late March to help states and local governments cover coronavirus-related expenses. The state is paying half from its share of the federal money and New Castle County is paying the other half.
Using weekly Census surveys, the financial consulting firm Stout Risius Ross LLC found about 29% of renters in Delaware at the end of July had no or only slight confidence in their ability to pay the next month’s rent. That firm also estimated a monthly shortfall of $10 million in rent statewide.
MILTON — Live entertainment venues look to get a boost, as Sen. Tom Carper, D-Del., discussed his newly introduced bill at Milton Theatre on Monday, which will give live entertainment venues across the country a tax credit to make up for revenue lost to canceled shows amidst COVID-19.
The Entertainments New Credit Opportunity for Relief & Economic Sustainability (ENCORES) bill was introduced by Sen. Carper and Sen. Jon Tester, D-Montana, to Congress on July 29. The bill has been assigned to the finance committee in the House of Representatives to await further discussion.
Sen. Carper said his love for the arts is what pushed him to create the ENCORES bill.
“I love music, I love live performance, it’s one of the joys of my life, and I think it’s one of the joys of a lot of people’s lives,” Sen. Carper said. “If we didn’t have music and the arts, we would be missing a whole lot. You don’t have to be in New York City, Philadelphia, Boston, or LA to find great music. We have it here.”
The live entertainment industry has dealt with show cancellations, ticket refunds and strict health regulations since the spread of COVID-19, making it one of the hardest-hit industries by the pandemic thus far. Live entertainment simply does not exist in the same way since March, as they were one of the first industries to shut down and have faced many hardships in trying to reopen safely.
Milton Theatre Executive Director Fred Munzert spoke Monday about how COVID-19 has taken a significant toll on its staffing and revenue.
“On the 13th (of March), we shut down. It was just so emotional for us and everyone who worked here. (For) almost 30 employees and contractors, this was our life blood, our passion, our love, and for many, our mortgage payment, putting food on the table for our kids, all of those things,” Mr. Munzert said.
“We let everyone go. We had to. Our income stopped in a day. Then, the influx of calls for refunds. $150,000 almost immediately of requests for refunds came in. It was remarkable, the impact and terrifying.”
Delaware employers and workers are scrambling to get back to normalcy and get back to work. Our economy is suffering and many are left to wonder what will happen to their businesses and livelihoods if lockdowns persists, or a second wave of COVID—19 hits.
Things are tough now, but they have never been easy. Pre-pandemic, Delaware was the 7th worst place to start a businesses and ranked 34th for employment. Many factors contributed to the First State being left in this position, but one stands out: regulations.
As of last year, Delaware’s regulations included 104,562 restrictions, 6.7 million words, and would take 9 weeks to read through—and all of this is in addition to federal regulations. For a small state, that’s quite a regulatory burden.
Delaware ranks 42nd for its regulatory environment and 37th for economic environment. The state ranked worst in the nation for its regulatory environment, West Virginia, also ranks 48th for its economic environment, and this trend holds for the states with the worst regulatory environments. Regulations are an economic plague.
Now, more than ever, we must address our codified limitations to an economic boom and a better business climate. Currently, one out of eight Delawareans included in the labor force are unemployed and the state has lost close to 50,000 jobs since last year.
Governor Carney recently signed an Executive Order creating the Rapid Workforce Training and Redeployment Training Initiative to assist Delaware workers and their families who have lost jobs and income due to the COVID-19 crisis. This program will help identify key areas for employment and implement rapid training and certifications to get people back to work faster.
Other actions like this could be done swiftly to help Delaware workers and businesses.
In last week’s blog, we mentioned the apprenticeship ratios in Delaware that are massive job killers. Other items, such as licensing requirements and permit processes could be fixed through rapid action to reduce the regulatory burden on employers and workers. These regulations hurt the ability for places like barber shops and nail salons to start their businesses.
The state’s prevailing wage sets an artificially high price on contractor wages on government projects, effectively reducing the total number of jobs that are filled and limiting the work that can be done.
Helping independent contractors has been an important issue that has come to light during the pandemic, as many statewide were unable to file for unemployment due to regulations that technically held up the process for benefits to be distributed to these workers. Other restrictions on licensing and independent firms also keep doctors and lawyers from locating and developing their practices in Delaware.
Environmental, energy and utility regulations place a major strain on many businesses, especially manufacturing businesses.
Long term, Delaware should take steps to address its massive regulatory body. Regulatory reform is not a new wave idea springing from the ashes of coronavirus. Notable regulatory reform programs exist in Indianapolis, San Diego, New York City, Colorado, Minnesota, Virginia, and in our neighboring states Pennsylvania and New Jersey. In May 2019, Idaho did an entire regulatory reset, where their state government eliminated all regulations and will only bring back the ones it chooses.
While mimicking Idaho would be a massive undertaking, the state could create an independent reform commission, and address regulations by deciding which are truly beneficial, focus on outcomes instead of processes, simplify regulations to make it easier for businesses to understand, and be transparent in their process.
Last May, a bill was introduced in Delaware that would have required an economic impact statement for regulations, as well as a timeline for review of regulations with an emphasis on minimizing the economic impact they would cause. This bill was stalled in committee and never received a vote.
This should be a consideration for the Delaware legislature in the next legislative session, but more immediate actions like those listed above can be taken now to help Delawareans.
In a move uncharacteristic for our current state leadership during the pandemic, the Delaware Department of Transportation (DelDOT) recently announced new efforts to support small businesses in Delaware. The Small Commercial Entrance process will reduce costs and wait time for eligible small businesses, and an expedited review and approval process is expected before the end of summer.
More businesses and business groups are speaking out about the lack of attention and help they have received from state leadership, after 4 months of the State of Emergency and little clarity or assistance. For small businesses and new businesses, the DOT rule changes are a bit of hope at this time.
If this can be done in the DOT, other agencies could potentially issue rule changes to help employers and workers since the administration refuses.
Businesses have been crying out for help after being forced to shut down, but workers are still suffering through the impact of COVID-19 in Delaware.
Delawareans who were laid off at the start of the shut downs and applied for unemployment in March have yet to receive benefits. Often it is difficult to get an answer when contacting the office for answers or help with payments. Without work and without unemployment being delivered in a timely manner, this has left Delawareans wondering how they will stay afloat for the remainder of this pandemic. This would position the Delaware Department of Labor (DOL), as the next logical entity to make rule changes in order to help struggling Delaware workers find jobs.
A big concern with current DOL anti-business regulations is the mandatory and restrictive apprenticeship ratios that prevents Delaware businesses and contractors from hiring new workers now.
Delaware’s ratio means that you can have 1 apprentice for every 3 journeyperson. Businesses and contractors are not permitted to hire a second apprentice until there 6 journeypersons, and so on as you hire more apprentices. These overly restrictive rules sideline Delaware workers from good paying jobs right now.
Bottom line: these mandatory ratios are job killers.
For instance, there are close to 30 trades that are restricted to only hire one apprentice for every 5 journeypersons. The DOL touts 1,500 current apprentices, but if this ratio was adjusted to 1:1 or 1:2, this would result in thousands of new hires immediately.
By DOL making this change in the manner that the DOT issued their rule changes to help small businesses, trade workers in Delaware would have more opportunities for employment, and the state could see an increase in total jobs available. There are likely other opportunities for the DOL and other agencies to readdress their rules and regulations to help Delaware’s workers.
State regulations reduce job opportunities and limit the workforce—especially for unskilled or low-skilled workers—and must be addressed in order to get people back to work.
A better Delaware would establish an inter-agency committee immediately to help put Delaware back to work right now.
