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Were recent job losses a wake-up call for state policymakers?

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Rep. Jeffrey Spiegelman talks with legislative assistant Dawn Hopkins and House Minority Leader Daniel B. Short at Legislative Hall in Dover. // Photo by Luigi Ciuffetelli

Rep. Jeffrey Spiegelman talks with legislative assistant Dawn Hopkins and House Minority Leader Daniel B. Short at Legislative Hall in Dover. // Photo by Luigi Ciuffetelli

By Kathy Canavan

Members of the 148th General Assembly should be sympathetic to small businesses – one out of every five legislators owns one. Twelve members of the House and two senators run their own small businesses.

And, legislators of all stripes are paying more attention to business since Chrysler and General Motors vanished and DuPont and AstraZeneca shrank, business leaders said.

DuPont’s layoffs last month tipped the scales. “We’re in a situation now where they know how dire it is,” said A. Richard Heffron, president of the Delaware State Chamber of Commerce.

Even legislators who would not have been considered “business-friendly” five years ago are listening a little more closely to chambers and business federations and their own small-business constituents.  As one business lobbyist put it,  “Most of them in the House, we can talk to. The Senate’s different. The Senate’s a little bit more liberal, but, once again, most of them will work with you. Even the union guys, we can work with.”

“I think there’s a recognition by almost every legislator that you’ve got to be pro-business and pro-growth or else you’re not going to have a successful economy,” said John Casey, government affairs director of the Delaware Contractors Association. “Since the closing of the auto industry and the shrinking of the economy, people from the governor on down are focused on creating jobs.”

A major voice for business grew out of the Small Business Caucus, a bipartisan group created by Democrat Rep. Bryon Short of Highland Woods and Republican Minority Leader Daniel Short in 2008. The caucus holds regular public sessions where business people can expound on pending legislation or explain issues that affect their companies.

“That caucus has been very, very helpful on business issues like eliminating regulations that are burdensome or antiquated or overly restrictive,” Casey said.

Last month’s smooth passage of the Delaware Competes Act simplified the way corporate taxes are calculated. Now small-business owners are focused on minimum wage legislation, tripling health insurance costs, workers comp costs, costly storm water management regulations and the threat of higher taxes.

“¢ “We’re always concerned about any bill that increases taxes and fees. They are one of the draws to Delaware – why people are leaving other states and moving to Delaware,” said Bob McVey, president of the Delaware Association of Realtors. 

“¢ “Passing anti-job and anti-business legislation like minimum wage just sends the wrong message to companies that are looking to settle in Delaware,” said Mike O’ Halloran, state director for the National Federation of Independent Business.

“¢ Fifteen percent of the businesses that make up the Central Delaware Chamber of Commerce could close if the legislature passes more laws that make it difficult for them to make their bottom line, Chamber President Judy Diogo estimated. “That’s huge for Kent County – to think that 15 percent of the businesses that are employing our people are put in a situation where they can’t operate anymore,” she said.

“¢ Businesspeople facing tripling health insurance costs at their own companies are crunching the numbers on what state employees pay for their health insurance and what part of the tab the taxpayers pick up. “It’s not fun to tell your employees they’re going to have to pay more, but every business person has had to do that.  At one time, the state employee didn’t get paid as well as other employees and they made it up in benefits, but that doesn’t appear to be true anymore. That’s how it appears. We have to wait for the data,” Heffron said.

“¢ Business leaders and business-receptive legislators say they want to guarantee clean water but they fear overregulation could tip things in the wrong direction for Delaware farmers and builders. “We don’t want to make regulations so costly that we can’t build any more chicken houses. Then we won’t be able to keep up with the demand for chickens – or that chicken house will get built somewhere else in another state and we’ll lose that business altogether,” said Rep. S. Quinton Johnson III, the Middletown Democrat who co-chairs the Small Business Caucus. “The bottom line is what looks good on paper may have a catastrophic effect once it’s implemented.”

House Minority Leader Daniel B. Short said state regulations are so burdensome that small-business people have taken to calling the agency that regulates roads “DelDON’T” instead of DelDOT. “I’d like to see that changed,” he said.

Short said he’s encouraged by the appointment of Transportation Secretary Jennifer Cohen, who transformed the Division of Motor Vehicles with her customer-service emphasis, but he thinks DelDOT and DNREC employees leave their offices and try their hand at getting a builder’s project through their own system. “I’d think they might change the system, because they’d realize what folks are doing every day to make ends meet,” he said.

“In some cases, through a variety of agencies, what we have created in the state is an adversarial relationship with business,” Short said. “With the economic development office, we’re trying to say, “˜Come do business here and, if you are here, stay.’ We just changed the corporate tax structure to help with that. So, on the front end, we’ve got the governor’s office and the economic development office working hard, and we’re doing a good job advertising. We just changed the corporate tax structure to help with that. But when they try to go get their storm water permits, for example, it seems like we create barriers for them to jump over. And when they get over them, we put up another barrier. What I would like to see is to have those barriers removed.”

Business leaders say more legislators are willing to listen as high-paying jobs vanish, but, a solution requires cooperation.

“¢ “With the Dupont change, I think even some of the least pro-business legislators will realize now that you’ve got to think about maintaining the quality jobs that are still in play,” Casey said.

“¢ “We have a lot of serious problems. We need to start working together,” Heffron said. “We’re going to have a new governor. Let’s go back to the model of the ’70s and the ’80s when we worked together. We all have different opinions, but we need to respect each other and focus on what’s good for all Delawareans.”

“¢ “I firmly believe that, if the legislators would be willing to work with the chambers of commerce and the other business associations, there are ways for us to find solutions so we can save these businesses and attract other businesses,” Diogo said.

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