Business interests come away from Dover satisfied
Following the surprise announcement of Sen. Harris McDowell’s retirement, lawmakers got a lot of business done late June 30 and in the wee small hours of July 1. They finished work on the state’s budget package ““ sending Gov. John Carney a record $1.2 billion capital budget and a $55 million Grants-in-Aid budget, which funds fire departments and a slew of nonprofit agencies.
One thing Carney didn’t get is a constitutional amendment setting up a so-called “budget smoothing” fund – essentially a second rainy day fund that would skim a percentage of the state’s revenue into a reserve fund to help pad the budget in the event of an economic downturn.
Although he didn’t get the amendment, lawmakers set aside money as well as putting large sums into one-time payments for capital projects and programs, largely in keeping with what the governor wanted.
That move earned praise from business leaders, including Business Roundtable Chairman Bob Perkins.
“The General Assembly had far more revenue than it needed, they were very responsible by setting aside a substantial portion of that additional revenue in case in the future there’s a downturn. That way they will be able to avoid raising taxes or cutting programs, which they’ve done in past years,” he said. “When you are in the circumstance where this is more than enough revenue to set the state budget, you do have the opportunity to do large priorities.
“They also took steps toward some good things in educational areas, setting aside money for dual language students and disadvantaged students,” he added. “We would have liked to have seen more work on a permanent education funding program but they did make progress.”
Along the way, lawmakers cleared the way for Dover and Sussex County to increase hotel bed taxes. Dover’s increase would help fund activities at the DE Turf, the increasingly popular Frederica-area sports complex, that frequently has the lion’s share of Dover hotels booked on weekends when it hosts tournaments and sports clinics. Sussex County’s increase would be on hotels in unincorporated areas and would help fund various infrastructure improvements.
While hot button issues, like marijuana legalization and big gun issues, didn’t get action. Lawmakers worked on the edges, decriminalizing possession of small amounts of pot converting first offenses to a civil penalty. However, some issues, such as a constitutional amendment allowing “no excuse” absentee voting fell short.
But there was no legislative hostage-taking this year. Last year, lawmakers had to work well into July 1 to finish their work as Republicans held up legislation, demanding a compromise on minimum wage legislation.
In 2017, there was a short state shutdown while lawmakers haggled over issues.
“It was a good session. We were efficient this year,” said Senate President Pro Tem David McBride, D-Hawks Nest. “We were able work together to get the budget bills through and get other business done. It’s not something a lot of people on the outside might notice, but working together efficiently is the mark of an effective legislature.”
House Speaker Pete Schwartzkopf, D-Rehoboth Beach, agreed.
“We move a lot of bills this year,” he said. “We made progress on criminal justice reform and some environmental issues. We did a very good job of working together and that made for a very smooth session.”
Lawmakers moved incrementally on some issues this year. For example, they approved a ban on single-use plastic bags in supermarkets, but stopped short of an all-out ban.
“It didn’t go as far as I would have liked,” said McBride, long one of the Senate’s leading environmental advocates. “There are a lot of loopholes in the bill. But it’s a first step.”
On the other side of that debate, Senate Minority Leader Gerald Hocker, R-Ocean View, says the bill will make life tougher for business, like his supermarket while convenience stores and other retailers can still use the bags.
Lawmakers proposed upping the minimum wage to $15 per hour and making changes to the way tipped workers are paid. Neither made headway in the closing days of the session and, while they’re likely to be debated next year, Hocker predicted there will be a fight.
“If you look around Delaware, you won’t find a lot of people making the minimum wage. At my business, the only people making minimum wage are 14- and 15-year-old baggers, and they also make tips ““ so they aren’t really making minimum wage,” he said. “My problem isn’t so much with the minimum wage itself. But if you increase it to $15 an hour, then the people who aren’t making the minimum are going to expect more. It can kill small businesses.”
James DeChene, the Delaware State Chamber of Commerce’s Vice President for Government Affairs, said stopping the increases was a big win for business but that he expects the minimum wage debate to return when lawmakers come back in January and he said the general increase will spark a lot of discussion.
“One thing that came out was the effect this will have on the nonprofit community,” he said. “When the minimum wage is in the $9-ish range they can plan for that,” he said. “When it gets up to $15, I think the state will have to look at their reimbursement rate and that could cost a lot more than the fiscal note they attached to the bill.”
But as other states move toward a $15 minimum wage, James Maravelias, president of the Delaware AFL-CIO, said it will put pressure on the state to make the change.
“If places like New Jersey and Philadelphia go to $15, I think people will drive to those jobs for the extra $5,” he said. “We’ll need to do something to keep our workers.”
But, on balance, Maravelias said it was a good year.
“We got Senate Bill 8 (expanding collective bargaining for state employees), apprenticeship legislation and unemployment legislation,” he said. “It was a good year for us.”