Legislative Update

This Wednesday, May 19, the New Castle County Chamber of Commerce will go to Washington for a day of special political and policy briefings. Small business owners, public officials and corporate representatives will travel by train to meet with our Congressional delegation in the U.S. Capitol, hear from the Republican National Committee and the Democratic National Committee about prospects for the 2010 midterm elections, and enjoy a fun and informative day of networking. For more information, or to register for this event please click the following link: http://www.ncccc.com/cwt/External/WCPages/WCEvents/EventDetail.aspx?EventID=620

The General Assembly began budget mark-up break after session on May 13. June promises to be hectic, as the last month of any session always is. Adding to the sense of urgency is the fact that the end of this session also marks the end of the 145^th General Assembly. Any legislation not passed will expire with this General Assembly and will have to be reintroduced.

The Delaware Economic and Financial Advisory Council’s revenue subcommittee met Friday morning and made no changes to last month’s revenue forecast of $39 million additional for FY 2010 and $64.6 million for FY 2011. Since, unlike in recent years, the State is not deficit spending toward the end of the fiscal year, that $39 million can be carried into next year, making for a total of $103.6 million additional for FY 2011.

Though a relatively modest structural shortfall of approximately $130 million for FY 2011 still exists, legislators on the Joint Finance Committee appear optimistic and are considering the restoration of last year’s 2.5% pay cut to state employees. Discussion begins on Monday, May 17.

On Tuesday, May 11, the House passed Senate Bill 234 as amended by Senate Amendments 1 and 3, by a vote of 26 to 12 (1 not voting, 2 absent). The bill awaits action by the governor. This legislation replaces the 5-cent deposit on bottles to a temporary recycling fee. Retailers will collect this fee at the point of sale and will be required Funds derived from this fee will go into the newly established Delaware Recycling Fund. Retailers will be required to remit 4 cents of the 5-cent fee per container to the State of Delaware on a monthly basis, accompanied by a report.

This Delaware Recycling fund will be used to establish and administer a statewide, comprehensive residential and commercial recycling program in which private haulers and municipalities will have to participate. Additionally, the bill creates the Delaware Recycling Public Advisory Council.

Last year, the Chamber supported House Bill 201, legislation which eliminated the 5-cent deposit in Delaware. This bill passed both houses but was subsequently vetoed. The Markell Administration expressed a desire to see the deposit replaced with a recycling program rather than be eliminated outright.

There is some debate over whether the “temporary recycling fee” actually constitutes a tax. If it does, then the legislation would have been constitutionally required to begin in the House of Representatives as opposed to the Senate. House Republican leadership also argued that the bill required a 3/4 vote rather than a 2/3 vote due to the fact that bill creates a fee that goes to municipalities and other third parties. Some expect a legal challenge prior to implementation.

To view a copy of this bill and its amendments, please click the following link: http://www.legis.delaware.gov/LIS/lis145.nsf/2bede841c6272c888025698400433a04/8113d395f2d823b5852576f70073e022?OpenDocument&Highlight=0,beverage

Representative Bill Oberle (R-Beechers Lot), joined by Minority Leader Richard Cathcart (R-Middletown) and Minority Whip Dan Short (R-Seaford), introduced legislation on May 12 which clarifies the State of Delaware’s intention to escheat unrefunded bottle deposits. Proceeds from the escheating of these deposits would be earmarked for a Universal School Breakfast Fund. The Chamber is currently reviewing the legislation and seeking input from potentially affected members. For a copy of the bill, please click the following link: http://www.legis.delaware.gov/LIS/LIS145.nsf/vwLegislation/HB+401?Opendocument

On Thursday, May 13, Wilmington City Council passed Wilmington’s FY 2011 budget. The $147.7 million budget includes a property tax increase of 10% and a water and sewer fee increase of 19%. The Chamber opposed these increases.

According to the Philadelphia Federal Reserve projections, Delaware is expected to experience negative growth into the third quarter of this year while Pennsylvania and New Jersey experience modest expansion. Additionally, according to the Delaware Department of Labor’s Monthly Labor Review for March of 2010, unemployment in the City of Wilmington is 13.1%, 4% higher than in unincorporated New Castle County. This is precisely the wrong environment for tax and fee increases.

The City’s FY 2010 budget, passed last year, included increases in both the head tax and the wage tax. The Chamber remains concerned about the impact of year-over-year tax and fee increases on economic development in and around the City of Wilmington.

Join us for a breakfast installment of the Policy Makers, Movers and Shakers Series featuring New Castle County Executive Chris Coons.  Mr. Coons is in his second term as New Castle County Executive and has led County Government during challenging economic times. He also serves as co-chair of the New Castle County Economic Development Council, a partnership with the Chamber designed to foster economic growth in our county and region. Come and hear the Chris Coons’ perspectives on growth and the economic challenges facing our New Castle County and the State of Delaware. For more information, or to register for this event, please click the following link: http://www.ncccc.com/cwt/External/WCPages/WCEvents/EventDetail.aspx?EventID=663