VIEWPOINT: Delaware attractive to outsiders, but more work to be done

Rod Ward

With the Covid-19 pandemic changing the way people work and where they live, Delaware is increasingly seen as an attractive option to out-of-state residents – with a low tax burden, high quality of life and scenic beaches and countryside.

A Delaware State Chamber of Commerce survey of more than 80,000 people released in October found that hundreds of residents from California, Georgia, Texas, Illinois and Florida were interested in moving to the First State.

Interest in Delaware – which must compete with larger regional neighbors – is encouraging news. And the survey findings should compel state policymakers to enact economic policies that will make the state even more attractive to employers who will offer quality, high-paying jobs to bring even more new residents to Delaware.

Gov. John Carney and the General Assembly prudently enacted a new $125 million Budget Stabilization Fund to ensure Delaware remains on sound financial footing even through economic downturns and budget shortfalls. We have seen the wisdom of this fund during the COVID-19 pandemic, as the state has not needed to make cuts to vital programs that benefit Delaware families. With Delaware’s economy recovering slowly from the initial impact of the pandemic, we also have seen encouraging news that the state’s revenue picture has improved to the point where tax increases – which would be extremely difficult for struggling families and businesses trying to recover – appear unnecessary.

Longer term, however, the state must do more. And it must start with enacting the proposed Ready In 6 initiative, which is designed to make Delaware more economically competitive with other states by cutting the permitting timeline from 24 months to six months.

This initiative is needed for a simple reason: The permitting and regulatory process is too slow and cumbersome, especially compared to neighboring states.

Delaware’s approval process can stretch up to 24 months, placing the state at a distinct economic development disadvantage when it comes to attracting jobs and growing businesses – especially since approval timelines in Maryland and Pennsylvania are closer to six months.

These findings were included in an independent analysis conducted by professional services firm KPMG, which concludes that Delaware would be better positioned to attract high-paying jobs if its permitting processes were strengthened through streamlined communication between state agencies, greater transparency and cost predictability, and a fast-track approval program for high-priority projects, among other recommendations.

The analysis finds, “With significant competition between states for jobs, talent and investment, an efficient permit process is critical to demonstrate a favorable business climate and provide a predictable outcome for businesses seeking to locate or expand in Delaware. Because prospective businesses target locations which can achieve permitting in as few as six months, those states with longer permit timeframes experience reduced interest and missed economic development opportunities.”

In response to these challenges, the business community has formed the Ready in 6 Coalition, which is committed to working with state and county leaders to make improvements in three key areas to streamline the permitting process in Delaware: Enhance communication, increase efficiency and reduce paperwork, and track and use data more effectively.

Recommendations for improved communication include creating a state project concierge to help streamline communication among state agencies; creating a permitting action committee to help with implementation of permit process improvements; integrating information technology solutions among the state, counties and cities; and implementing permit-focused economic development training to improve cooperation and coordination.

As for increasing efficiency and reducing paperwork, the analysis recommends creating a prioritization program for significant economic development projects; streamlining the Department of Transportation’s review process to ensure all departments review and provide comments on proposals during the initial review cycle; implementing Transportation Improvement Districts in targeted areas; and implementing prepackaged approvals for targeted investment sites. In fact, under Secretary Jennifer Cohan’s leadership, DelDOT has made significant strides toward a number of these goals, particularly for small businesses.

Finally, Delaware does a poor job of tracking and using data to identify potential opportunities. The analysis suggests generating data that measures permit process timelines, allowing regulators to develop key performance indicators and drive accountability among permitting agencies. Delaware needs to capture more and better economic development data to help the state to constantly improve as it seeks to attract employers.

Coupled with low taxes, a prime location and a high-quality workforce, a more favorable permitting environment would make it significantly more likely that Delaware would be more competitive as we work to grow, retain and attract jobs, talent and investment to our state. We are committed to working together and with the governor and General Assembly to strengthen economic development in Delaware to make the state more viable for generations to come.

As the recent chamber survey found, people are ready to move to Delaware. To ensure they have somewhere to work, we must do all we can to make the state hospitable to high-quality employers.

In short, we must be Ready in 6.

Rod Ward serves as chair of the Delaware Business Roundtable.