Business, unions and politicians agree that Delaware needs to grow its economy as it did with the Financial Center Development Act in the ’80s. What they don’t agree on is how to grow it.
Or even how to fund the current state government.
As the 148th Delaware General Assembly enters its second week, everyone is looking at the dollars.
They know state revenues will likely fall in 2016, based on estimates from the Delaware Economic and Financial Advisory Council, the group of volunteers and state employees that has been providing nonpartisan and objective revenue estimates to Delaware governors since 1977.
“The biggest issue—and it’s the biggest issue every year—is the financial situation,” said lobbyist Bob Byrd, a former majority whip in the House. “DEFAC is forecasting less money for 2016 than for 2015, so that means there’s going to be a lot of pressure on the revenue. They’re going to have to come up with ways to increase the revenue or cut programs.”
State revenue comes from five sources: personal income taxes, corporate franchise taxes, abandoned property recovered from companies incorporated here, gross receipts taxes, and gambling taxes. Several of those revenue streams are volatile in the current economy. Last week, Gov. Jack Markell said he would not pursue a gas tax.
“We’re all Delawareans, and we’re all in this together, and we all have to work together,” said A. Richard Heffron, president of the Delaware State Chamber of Commerce. “We did it in the ’70s, and we can do it again. Everybody has to give a little bit to get a little bit. We’ve got to get through this together. The governor and the legislature understand that.”
Here’s what business and union leaders will be watching in Dover this session:
Caesar Rodney Institute: Its big push this session will be for school choice and right-to-work. President John Stapleford points to other states where right-to-work introduced into schools tipped teachers’ unions. “If you had a right-to-work law, a lot of teachers would leave the union, and you would see more reform in the public schools,” he said.
Stapleford knows right-to-work would be a tough sell in a state as blue as Delaware, so his plan is to push right-to-work county-by-county or even establish a single right-to-work zone in the city of Wilmington to bring jobs where unemployment is high.
The Committee of 100: Near the top of its list is reviving infrastructure funding, with revenue strictly dedicated to the state’s transportation trust fund. “You just risk your economic competitiveness as things gradually deteriorate. It’s a lot easier to maintain something than to rebuild it. There is a series of projects statewide that need to be done,” Executive Director Paul Morrill said.
Morrill said his group will also be following the budget process, as they are concerned about the state’s revenue structure—especially gambling, abandoned property, and franchise fees.
“There’s no silver bullet. It’s just going to be a hard slog. You find things where you can save some dollars here or there. It’s a political process, to be sure,” he said.
Delaware State Chamber of Commerce: The chamber will be following revenue sustainability, workmen’s comp, infrastructure funding and education. President A. Richard Heffron said the state needs to consider all practical proposals to fund infrastructure improvements at an affordable cost. “There are different ways to bake that cake, and we’re going to look at them. We’re going to try to put something together everybody can live with,” he said. “We’re working with the governor and the legislature to find an answer.”
GOP: Party Chairman Charlie Copeland’s top issues are schools, prevailing wage, new taxes, the regulatory process, and the high cost of state government.
“The streets of Wilmington are stacked up with unemployable people who came out of those schools. We should be focusing on making the schools better,” Copeland said. “This legislature seems to be more interested in helping union bosses than helping families and kids and the quality teachers who are stuck out there in a failing system.”
Central Delaware Chamber of Commerce: The chamber will be tracking the moves of the state’s Blue Collar Task Force, which successfully passed a $7.75 minimum wage for Delawareans in June that will automatically rise to $8.25 next June—$1 higher than the federal minimum. It will back the Kent-Sussex natural gas line proposal, support tax relief for casinos, and oppose any attempts to revive Gov. Jack Markell’s proposal for a new tax to pay for his $800 million water-improvement plan.
“They really think that, before the state can start applying taxes, the state needs to look internally to see how they can cut some of their costs,” Chamber President Judy Diogo said.
New Castle County Chamber of Commerce: The chamber will be following the budget, infrastructure funding, health-care laws, and the prevailing wage—the negotiated amount the state pays union members who work on public projects. “The prescribed prevailing wage is the highest wage possible, above market rate,” said chamber President Mark Kleinschmidt.
And the chamber will be watching the state’s and the horsemen’s cuts of gambling revenues. Last year, Delaware casinos paid more than 60 percent of their gross profits to the state, horsemen, and video-lottery vendors.
AFL-CIO: Union President Sam Lathem said his 29,000-member organization will oppose the introduction of any right-to-work legislation and will campaign to keep the prevailing wage. “Prevailing wage insures a livable wage,” he said.
Home Builders Association of Delaware: The cost of excessive regulation and infrastructure investment is on Vice President Howard Fortunato’s mind as the legislators return. “I think we need the infrastructure investment,” he said. “The issue is how are you going to fund it?”
Bob Byrd, lobbyist: Byrd, a former House majority whip, said the legislature is going to have to cut programs or come up with new ways to pay for them. “Dollars are going to be the most important thing that gets watched,” he said.
He said nonperforming schools will be another focus. He pointed out that public school offerings have slowly improved since businesses got involved a decade ago. The ball started rolling in 1996, when the school-choice program was adopted and the Charter School of Wilmington was founded by six companies—AstraZeneca, Christiana Care Health System, Delmarva Power, Hercules, Verizon, and DuPont.
National Federation of Independent Business: State Director Jessica Cooper said her group will be tracking the Affordable Care Act, minimum wage, workmen’s comp, workforce education, and “any bill that will help the state’s job creators.”
“We’ve got a serious issue with the overall state budget. The spending is a big problem,” she said. “Everyone wants more money, and, all too often, business owners are the go-to for solving budget issues. It all adds up. Money doesn’t grow on trees. It’s going to break the business community’s back.”
The 148th General Assembly opened last week.
The assembly consists of 62 part-time legislators who meet from the second Tuesday of January until June 30.
It’s a bi-cameral legislature with 21 senators and 41 members of the House of Representatives.
Here is the calendar for January:
January 21: Legislature in session
January 22: Legislature in session; Governor Jack Markell delivers his state-of-the-state message to legislators
January 27: Legislature in session
January 28: Legislature in session
January 29: Legislature in session; Governor Markell presents his budget
Anyone can follow legislative progress online.
You can find agendas, committee assignments, contact information for legislators, and the ready list, a list of the bills that are out of committee and ready for consideration.
You’ll also find links to previous General Assembly facts, FOIA requests and the Delaware code.
Some legislative committees post their schedules online; some post their meeting minutes.