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What’s New

Delaware cites system error amid prolonged wait for Pandemic Unemployment Assistance

Many Delawareans are still waiting for unemployment benefits following confusion over a system error for self-employed and independent contractors who are out of work due to coronavirus, according to the Delaware Department of Labor.

The announcement refers to unemployed residents who filed for Pandemic Unemployment Assistance, which in Delaware was launched in May thanks to the federal stimulus package passed by Congress.

After going weeks without benefits, most of those claimants still haven’t been paid and have been confused by the department’s handling of their payments. Claimants watched their claims go from being erroneously marked as “processed” to not processed. The system marked “far more claims as processed than had been reviewed and approved by staff,” according to a Wednesday morning Facebook post from the department.

“As a result of this system error, the online view for many claimants was changed to show a payment was going to be made,” the post says. “We corrected this problem and as a result, the ‘Processed’ status was reversed for claims which had not yet been approved for payment.”

Several informational flyers were posted on the glass doors of the Delaware Department of Labor's Wilmington office building on Thursday, April 2.

Those claimants already had to wait several weeks longer than other unemployed Delawareans, who have been able to apply for benefits due to coronavirus in mid-March, because the department was waiting for guidance from the federal government on how to roll out this program, according to Labor Secretary Cerron Cade.

Since the program launched on May 16, more than 6,000 claims have been filed that would lead to more than $14 million in benefits, according to a Friday news release from the department. That’s about 6 percent of the total number of people who have filed for unemployment.

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A sad farewell: Delaware restaurants and cafes closed for good due to the coronavirus

Delaware restaurant dining rooms, closed since March 16 because of the coronavirus, were allowed to reopen on a limited basis on June 1.

But the loss of revenue for the past 10 weeks apparently has been too devastating for some operations.

The Delaware Restaurant Association predicted that 20 to 30 percent of restaurants in the state would likely close permanently because they could not overcome financial hardships.

J.B. Dawson's Restaurant at the Christiana Mall.

EDITOR’S NOTE: This list was updated June 18.

Here are some restaurants and cafes that are going out of business:

Nal Restaurant in Hockessin

In 2018, Miriam Peregrina and her husband Ruben open the new Nal Restaurant in Hockessin, a Latin American dinner-only restaurant. The restaurant permanently closed June 18, 2020.

Owners Ruben and Miriam Peregina had grand hopes of bringing foods from Brazil, Peru, Argentina and their native Mexico to their new restaurant in Hockessin when they opened two years ago.

The dinner-only restaurant at 1304 Old Lancaster Pike, across from the Wawa store, was named Nal after the Mayan god of maize (corn).

The pair, first-time restaurateurs, renovated a former barbershop into a sophisticated, minimalist 40-seat eatery.

Nal Restaurant in Hockessin was a Latin American dinner-only restaurant. It has permanently closed after two years in business. Owners made the announcement on Facebook on June 18.

On Thursday, the couple announced the restaurant was permanently closing “after a deep evaluation of our current situation and the near-term economic outlook.”

The Pereginas thanked customers for their support in a note posted on therestaurant’s Facebook page.

Half Baked Patisserie in Middletown

A Facebook post on June 8 said the business at 13 W. Main St. was closing after eight years. “It’s no secret that being a small business owner comes with endless challenges. There are battles we have won, and some we have lost,” the post read. “The time has come that we will lock our storefront up for the last time and focus on what matters most, our family.”

Last day of business is June 10. Owners said “all pre-existing confirmed orders will be honored. “

JB Dawson’s at the Christiana Mall

The restaurant at the mall, operating for the past 10 years, announced June 4 that it would not be reopening. It has been closed since March.

A Facebook post read:

 “It is with heavy heart to tell all of our loyal customers of our Christiana Mall JBD’s that we will not be re-opening this location. We had a great 10 years but we will not be renewing our lease.

We are sorry to disappoint of our wonderful customers but with Covid-19 we had to make this very difficult decision.

Sincerely,

J.B. Dawson’s Staff

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Keep Sussex Strong looks to bolster local economy

Bill Clifton, executive chef and co-owner of The Counting House restaurant in Georgetown, keeps his spending dollar local when he can.

“It can be hard when you’re buying something like televisions. But I don’t buy from chain restaurants or fast food,” he said. “See, my family had the cannery in Milton, so everyone would come in at one time. Everyone knew my family, and my family would know everyone. I like to keep that connection.”

Now Clifton is sharing that drive to support small businesses in his home county with the “Keep Sussex Strong” advertising campaign created by the Sussex County Economic Development and Southern Delaware Tourism. He’s one of 14 business owners, ranging across different industries across Sussex County, featured at work and stressing the need for customers to shop locally.

“If you want to improve your local economy, you need to shop here,” Clifton said. “The money stays here. They pay taxes in your town and county. They help out your local charities and churches. They know what it means to be part of the community.”

Three commercials produced by W. Films will air on regional television and on social media throughout the month. Sussex County Economic Development spent $40,749 on the campaign.

Now that Delaware is taking the first steps in reopening, the goal is to inspire residents and visitors to spend money at small businesses where it is needed the most, said Sussex County Economic Development Director Bill Pfaff.

“We need to put customers on high alert that now more than ever, local businesses need them. They have been shut down or on part-time. We need to keep them alive,” Pfaff told the Delaware Business Times. “Without our local businesses, we would not exist.”

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Public-private partnership aims to make Wilmington stronger (Opinion)

Many business owners are attempting to navigate rapidly changing COVID-19 regulations and are applying to state and federal loan programs. The fortunate businesses that do receive loans face the uncertainty of knowing if they will be eligible for forgiveness or if they will be stuck with enormous debt. Some federal programs also require a relationship with a lending institution, adding an additional barrier to businesses located in low-to-moderate-income communities of color, which often lack access to capital and are at risk of ineligibility.

In Wilmington, small businesses are making hard financial decisions that may not be the best option for them.

Small businesses drive our national economy. According to a 2018 U.S. Small Business Administration report, 30.2 million small businesses employed 58.9 million individuals, or 47.5% of the working population. An April 2020 report by the National Bureau of Economic Research indicates the impact of COVID-19 on small businesses nationally has resulted in 43% of businesses being forced to temporarily close and, on average, staff reductions of 40%.

The City of Wilmington has an estimated 1,500 small businesses. In a local survey conducted by West Side Grows Together, a coalition of Wilmington’s West Side residents, businesses, churches and community groups, business owners reported on average a 60% decrease in sales revenue since stay-at-home orders took place.

Public safety measures, such as non-essential vs. essential business designations, have left many owners wondering why certain businesses can operate when others cannot. Once our state reopens, sustained social distancing practices will likely result in low attendance at events such as summer farmers markets, the Clifford Brown Jazz Festival and events at the GRAND and the Art Loop, reducing the much-needed foot traffic upon which small businesses rely. Safety and our public health are top priorities, but if we are unable to help our businesses now, we will see the end of our Wilmington small business community.

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Starter kits designed to help Kent County businesses get back to work

DOVER — The Central Delaware Chamber of Commerce, in collaboration with the Kent Economic Partnership and the Greater Kent Committee, are ready to get Kent County businesses closed by the coronavirus pandemic back to work.

That is the primary reason they have created, and recently distributed, 100 “Getting Back to Business Starter Kits.”

The starter kits are designed to be given to small businesses (those with less than 20 employees) who did not have access to some of the supplies they would need to reopen to their customers following Gov. John Carney’s emergency orders that closed non-essential stores and businesses.

Each starter kit, valued at more than $350, contains masks, gloves, wipes, hand sanitizer, disinfectant spray, and no-contact thermometers, as well as coupons and offers that could assist businesses during their restarts.

Each kit also contains a “Getting Back to Business” brochure, which outlines the various procedures and precautions that business owners need to consider prior to a relaunch. The kits were funded through donations by a variety of partners and supporters, including Kent County Levy Court, the city of Dover, Calpine, Chesapeake Utilities, First State Janitorial, Office Pride, Staples and W.B. Mason.

Business owners were eager to pick up their kits last week.

“I was super-duper excited to receive a kit and even more excited after I opened it,” said Nicole Ali, owner of Trini Quizeen. “The items in there will last me for several months and will be a tremendous help.”

Others who received the kits were excited as well.

“It was so awesome,” said Hoong Chow, of Keller Williams. “The items in the kit will help me to protect my clients and myself.”

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Del. unemployment reaches 14% in April as about 75K jobs lost

DOVER – Delaware’s unemployment rate reached a modern record of 14.3% in April, as the state reportedly lost nearly 75,000 jobs in response to the coronavirus pandemic, officials reported Friday.

The state’s seasonally adjusted unemployment rate was in line with the national rate, which sat at 14.7% in April, but it marked a huge jump from Delaware’s 5% March unemployment rate.

At 14.3%, it is also the state’s highest recorded monthly unemployment rate, according to the U.S. Bureau of Labor Statistics (BLS), which started tracking state figures in 1976. It is also 46% higher than the previous record of 9.8% in November and December 1976. The highest monthly rate recorded in the past decade was 8.8% in January 2010, just as the full impact of the Great Recession was felt.

The Delaware Department of Labor’s report, which is taken monthly during the calendar week that contains the 12th day, showed that 66,700 workers were unemployed. Tom Dougherty, chief labor market economist for the department, explained that the monthly unemployment figure is created from looking at continuous unemployment insurance claims as well as a BLS survey of residents on their employment status.

The official monthly unemployment statistic tracks not only those receiving benefits, but also those who ineligible, such as terminated employees and the self-employed, who only became eligible for assistance under a special federal program established under the CARES Act.

While more than 95,000 workers have filed for unemployment assistance in the wake of the pandemic, most because of statewide business closures mandated by Gov. John Carney to stem the spread of the virus, the state also had 19,400 unemployed workers in January, before the pandemic struck the U.S.

Dougherty said it’s important to remember that the monthly report is just a “snapshot” of one week in time.

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Vermont spends $310M of CARES funds helping businesses– will Delaware?

Two months into its emergency order, Delaware has yet to reveal what help businesses may receive and how as we recover from the coronavirus, while other states are offering hope.

An upcoming episode of A Better Delaware’s livestream seriesA Better Discussionwill feature Betsy Bishop, President of the Vermont Chamber of Commerce to discuss Vermont Governor Phil Scott’s recently announced $400 million economic relief and recovery package (stay tuned on our Facebook page for an announcement of the date).

The proposal, funded by the $1.25 billion the state received from the Federal CARES Act, includes $310 million for immediate emergency relief to the most impacted sectors and businesses, as well as $90 million in long-term recovery investments, and offers support for Vermont businesses includes funding for financial, housing, and technical assistance.

“These ideas are the result of talking to many local employers over the last two months to identify what they need now, and what they will need on the other side of this,” said Agency of Commerce Secretary Lindsay Kurrle.

In Delaware, we have yet to take any similar action.

State leaders requested flexibility in use of CARES funds, with no plan in place for how to use it.

In Tuesday’s episode of A Better Discussion, guest Bob Older, President of the Delaware Small Business Chamber of Commerce, expressed that when it came to Delaware’s response to the virus, “our small businesses were left in the dark.”

Older continued, saying businesses have been forced to remain closed for longer than was necessary, and much to the detriment of their operations and ability to reopen. The two month long stay at home order will force many businesses to shutter permanently.

Delaware was near last in the nation in the U.S. Small Business Administration Paycheck Protection Program funds and offered state assistance through the H.E.L.P. loans, only to the hospitality industry, leaving many businesses helpless. State reserves, such as the $252.4 million in our Rainy Day Fund, tens of millions in the Strategic Fund, and $126.3 million from budget smoothing weren’t utilized to help either.

As we continue to wait for a phased reopening and an announcement of an economic plan, watching other states move forward with economic and business assistance feels like salt in the wound—a wound that has been left open for far too long.

Unfortunately, this isn’t the only instance of Delaware lagging behind in an economic response during the virus. Other states launched business and economic task forces weeks before announcing stay at home orders, whereas Delaware’s Governor joined with other states in a task force weeks after forcing businesses to close, and has yet to proceed with a state-focused initiative.

Early on, state leaders responded to industry pleas by telling them that the health side was their only priority, and businesses would have to wait.

Two months later, and with other states pushing forward, you have to wonder: just how long are our floundering businesses and 100,000 unemployed Delawareans expected to wait for our state leaders to act?

Was Delaware’s unemployment system prepared for coronavirus crisis?

From the News Journal

Facing more than 90,000 initial jobless claims since the coronavirus pandemic hit Delaware, state officials estimate they will run out of unemployment funds around the end of June, when they plan to start borrowing from the federal government to pay out benefits.

Like other states, Delaware has been draining its unemployment insurance trust fund during the pandemic-triggered economic downturn. But unlike more than half of states, Delaware didn’t enter the crisis prepared.

Instead, Delaware is one of 22 states and territories whose unemployment trust funds weren’t funded to a level of solvency that the U.S. Department of Labor says is adequate to weather a recession. The state had close to $173 million in its unemployment fund this January.

Delaware Secretary of Labor Cerron Cade said the way the state taxes employers has hindered the unemployment fund’s growth.

Experts and the federal government recommend building up the state’s unemployment reserves while the economy is strong, and drawing on the funds during recessions. Unemployment funds are maintained with taxes employers pay on wages for workers.

Nineteen states increase the amount employers must pay into the unemployment fund as wages grow.

But in 2013, Delaware lawmakers mandated that the higher the unemployment insurance fund, the lower the tax burden on businesses. That means the fund grows at a slower rate the closer it gets to solvency.

“On the back end of that, as the trust fund begins to get to a lower balance, we start taxing employers more,” Cade said. “During a time period when you want employers to hire more, why would you make it more costly for them to hire someone?”

Cade said the state was considering other formulas to administer the unemployment insurance tax.

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General Assembly Announces Plans to Reconvene Legislative Session

From Delaware House Democrats
House, Senate will conduct business through virtual session to meet constitutional obligations

DOVER – The leaders of the Delaware General Assembly announced plans Thursday to virtually reconvene the second half of the 150th legislative session, starting later this month.

Following extensive legal and logistical research, the General Assembly will implement a plan that allows the House and Senate to meet to their constitutional obligations efficiently and effectively, while also protecting the public, staff and legislators from the risk of spreading COVID-19.

“From the moment we first postponed session in March, legislative leaders said our priority was protecting the health of legislators, staff and the public. That priority has not changed,” said House Speaker Pete Schwartzkopf. “During this State of Emergency, we have worked with and through the governor’s office to implement many of the policies we normally would have passed through legislation.

“But we also have been working on how the General Assembly can resume session during this public health crisis. Unfortunately, it is not as simple as setting up a video conference call. We have to lay everything out carefully so that we are prepared and can function as normally as possible when we reconvene. We believe we have a responsible plan to share with the public.”

Until recently, Delaware law required the General Assembly to meet in person in Legislative Hall to conduct business. However, the Legislature amended the Delaware Constitution in 2018 to allow for session to take place in alternative locations during an emergency. Given the current circumstances, legislative leaders have determined that the best and safest way to meet is through a virtual session.

“Thankfully, we have the technology to hold this unprecedented session in a way that will protect the public’s health while also allowing the public to follow the proceedings in a way that’s very similar to how we conduct business at Legislative Hall,” said Senate President Pro Tempore David McBride. “Our main priority will be to ensure our state agencies can continue to provide the vital services our residents depend on. That means passing a balanced budget that accounts for a sharp decline in revenue and the cost of protecting the health of our most vulnerable residents.”

Under the plan, legislative leaders issued a joint letter to all General Assembly members Thursday (attached to this release) outlining the process for the next meeting of the Legislature.

 

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Desperation grows for restaurants, retail as recovery in sight

From Delaware Business Times

“Desperate times call for desperate measures.”

That’s how Dominic Marino, general manager of Gallucio’s Italian Restaurant, recalled his decision this week to dress as Santa Claus and walk the streets near his Trolley Square-area business to drum up some attention from prospective customers.

The days at the restaurant are a hit-or-miss experience due to state-imposed limitations to takeout or delivery service only, Marino said. On Mondays, it’s common for the restaurant to ring up only $200 in total sales.

“If we don’t open up soon, we will be forced to shut our doors permanently,” he said.

Marino isn’t alone.

With Delaware’s economy still largely shutdown amid the spread of the COVID-19 virus, many small business owners in the state are growing weary of the lack of customers and fearing that their doors may never reopen.

A late April survey of 285 Delaware businesses found that one in four believed they only had enough cash to last another four weeks and more than 80% of respondents reported declining revenues. Workers have already suffered, with the survey by the state’s economic development agency Delaware Prosperity Partnership (DPP) and the state’s chambers of commerce finding that 1,900 workers had been furloughed, laid off or terminated by respondents amid the pandemic, accounting for about 17% of their total workforces.

Gov. John Carney has faced increasing public pressure to begin easing restrictions on businesses as the lockdown lingers on. This month, he has opened Delaware’s public beaches, community pools, ice cream shops, and salons and barbershops under strict limitations, but many of those hit hardest, including restaurants, small retail shops and hotels, are still waiting for significant help.

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