DOVER — In his first budget proposal, Gov. Matt Meyer is likely to focus state dollars on programs that improve Delaware’s quality of life rather than on stand-alone programs that have offered grants for businesses to come to or grow in Delaware.
The governor told the Delaware Business Times this week that he believes the best way to attract companies is to make the First State a desirable place to work and live.
“I’ve spent over a decade starting and owning a couple of companies and eight years running the state’s largest local government. I’ve learned that when businesses are looking to start or grow here, they want a great public education system,” Meyer said. “They want quality and safe affordable housing for their employees. They want safe streets. I really believe that.”
“When we talk about economic development, let’s invest our dollars in those things,” the governor continued. “That doesn’t mean we will never give financial assistance here or there, but it means we should not be putting all our money in one pot and thinking about how we can give it back.”
As Delaware is a small state compared to its neighbors Pennsylvania, Maryland and New Jersey, it does not have the funds to land and sign megadeals alone. For example, Pennsylvania Gov. Josh Shapiro’s last budget included $500 million to provide grants or loans to developers or local government agencies so they can prepare sites for industrial or mixed-use projects.
In the past, the Delaware General Assembly has consistently passed budgets that support the Strategic Grant Fund, which has paid out grants to various businesses over the years that add jobs or want to build or expand here. Legislators have allocated $133 million through the course of eight budgets.
Former Gov. John Carney’s economic development policy also focused on listening to the business sector and creating policies for a modern age while ensuring that the taxpayers do not pay for bad or failed deals. During his time in office, he established the Delaware Prosperity Partnership (DPP), a public-private nonprofit that was tasked with investing in workforce development programs, site selection and start-up business support. Grants that are offered by the state through this program are designed to serve as reimbursements - meaning that the company gets paid once the jobs or construction is done.
[caption id="attachment_469687" align="alignleft" width="300"]
Incyte received $14 million in state taxpayer-backed funds to turn the former Bracebridge buildings into its new headquarters. | DBT PHOTO BY KATIE TABELING[/caption]
Over the years, the DPP has also had a major hand in supporting Delaware’s largest projects and lobbying for funds from the Strategic Grant Fund, such as
$14.8 million for Incyte’s new headquarters in downtown Wilmington,
$19 million for the WuXi STA Pharma site in Middletown and the
$3 million grant for the Delmarva Corrugated Plant outside Dover.
But the DPP has also shaped Delaware's past budget policies as it worked to respond to developer needs, such as programs for infrastructure improvements and adding more lab space in the state.
In response, Carney included funds that legislators supported for the Graduated Lab Space Fund in Fiscal Year 2021 and the Site Readiness Fund in FY 2022. Those programs received $30 million and $40 million, respectively, over the past three years in the state budget.
Delaware also added the Transportation Infrastructure Investment Fund (TIIF) in FY 2020 and the Sports Tourism Fund in FY 2024. The TIIF is designed to offer grants to build the infrastructure for businesses in Delaware and has been allocated $35 million in the past five budget cycles. The Sports Tourism Fund, which is new and offers grants to support sports facilities, was allocated $22 million over the last two budget cycles.
But Meyer has said he’s less interested in winning companies with deals and more interested in creating a stronger school system. He pointed to Amazon’s HQ2 where the multinational tech company solicited bids for its second headquarters and local and state governments made deep tax break offers for the project.
“This may not be popular for a politician to say, but I’m not into winning a company deal. That’s not where we want to be. Where we want to be is to look internally and make the best public schools in the country,” he said. “If we invest in our schools, economic development will follow.”
When running for governor, Meyer made improving the education system
the cornerstone of his campaign. But he also made it clear that he sees Delaware’s schools as an entry point for workforce development for the jobs of tomorrow. Moments after his inauguration, he signed an executive order to study how the state can break down barriers in youth apprenticeships in the trades.
The governor told DBT he does see the DPP playing an integral part in his economic policy, as they have offered critical services that have supported the state. As governor, Meyer is now the co-chair of the DPP board of directors, along with
CSC CEO Rod Ward.
DPP Marketing and External Relations Director Joe Lewis told the Delaware Business Times that the governor has every right to propose his own strategy for economic development.
“Once we talk about the details and create a strategy for economic development, the DPP is confident that we can adapt and continue to present Delaware as a great place to do business in the marketplace,” Lewis said. “We look forward to meeting with the governor and having a conversation about his vision for Delaware's economic development future.”
Investments in innovation
[caption id="attachment_445355" align="alignright" width="300"]
Gov. Matt Meyer said he wants to focus on investing in a "one-stop shop" for permitting for residential and commercial home builders, to help cut costs. | DBT PHOTO BY KATIE TABELING[/caption]
Meyer can mark up the $7 billion proposed budget in the spring. While there have been some complications, such as the abated
federal funding freeze and a possible trade war, Meyer said he plans to deliver on his campaign promises on education. His administration’s goal is to update the funding formula with a sense of urgency, the governor said. Another focus would be programs that would bring Delaware kids up in reading skills.
“We have to make sure that we're investing in a 21st century economy and that we're preparing kids for the highly technological and innovative problem-solving kind of jobs that employers are looking for,” Meyer said. “It doesn't matter how much we give [in grants] to people. If we can't provide that, then we're not going to build the economy of the future.”
Given Delaware’s small size and ease of access to larger markets like Philadelphia and Washington D.C., Meyer believes the future lies in financial technology, banking and life sciences. With Delaware’s foundation as the credit capital and hundreds of former scientists from DuPont starting their own companies, the governor thinks that Delaware can win with companies on the cutting edge of innovation.
“There are people right now in Delaware who are some of the leading thinkers on money as digits and technology. We have some of the leading scientists in the world in material sciences and biotech. Incyte is working to cure cancer. The question is how to replicate that and grow it,” Meyer said.
One way would be to focus on the
“one-stop” shop for permits and regulations in Delaware, something that the governor has been bullish on to support development. Making strategic investments in that concept would help cut tens of thousands of dollars in legal and engineering expenses before construction could start.
As Meyer heads into his third week in office, he’s also tasked with leading a state in unpredictable times, with President Donald Trump’s administration making bold assertions of power when it comes to federal funding and immigration policy. The Meyer administration is watching internal budget forecasts closely when it comes to the national forces at work.
“On one hand it’s not that different than when things were a few months ago, but on the other hand, I do think because of what the president’s doing, eggs and things are getting more expensive and the pressure on families is increasing,” he said. “Fifty governors out of 50 in this country would tell you that when the federal government is not picking up their slice of the pie, it’s the states that need to deliver. So, the pressure is on to deliver.”
