CAESAR RODNEY INSTITUTE

The Caesar Rodney Institute is a 501(c)(3) non-profit, nonpartisan public policy research organization that promotes and advocates for civil liberties, economic freedom, and limited government in the state of Delaware.

The following articles and or statements are not necessarily supported or endorsed, nor do they reflect the opinions or the views of the 38th District Republican Club, PAC. They are provided as an informational service to its members and the public at large. 

 

CRI NEWS: Tuesday, October 12, 2021

The Beat Goes On

Delawareans per capita incomes trend continues the nine-year record of being lower than the national average
by Charlie Copeland, Co-Director
Center for Analysis of Delaware’s Economy & Government Spending
October 12, 2021
The following is an update on the data release that CRI issued on July 2, 2020. CRI, periodically, will continue to update releases like this to demonstrate with data whether Delaware’s economy has started to improve in overall terms or to improve in relation to the nation or not. Regrettably, in economic terms, Delaware continues its relative decline.

Delaware Per Capita Income Over Time (Earnings, Investment, Government Support)

Per capita (per person) personal income is one important measure of the economic well-being of a society. In 2002 Delaware’s per capita income was 18% above the nation (see chart below). It has been downhill ever since. 2020 extended the decades-long downward trend as Delaware’s per capita income now registers 5% below the nation.

(GRAPH SOURCE: U.S. Bureau of Economic Analysis)
As indicated in the graph above, the early 2000s were an economic catastrophe in Delaware with the closure of automotive manufacturing plants, the downsizing of the Dupont Company, and stagnation of the credit card industry.
However, these events from well over a decade ago do not explain the ongoing post-Great Recession erosion of Delaware’s economy. Perhaps that can be explained by the continued shift in our economy from one driven by entrepreneurial activity to one driven by government expenditures.
Economists track personal income as three major components: earnings (wages and proprietor’s income), investments (dividends, interest, rent), and transfer payments (Social Security, Medicare, Medicaid, TANF-Temporary Assistance for Needy Families – aka Government Support).
Earnings are the largest component of personal income, accounting for 60% nationwide. From 2002-2020 total earnings in the U.S. increased 88% but rose only 47% in Delaware – and actually decreased by around $64M in Delaware during the pandemic.
This loss of high-wage earners in Delaware has been accompanied by a slowdown in income from investments. The loss of high-wage earners also caused an increase in the negative effects of Covid-19 in Delaware versus the rest of the nation. From 2002-20 nationwide income from investments rose by 129% (versus last year’s reported 133% – a 4% yr/yr decline), but Delaware took a larger hit – 2002-2020 income from investments rose just under 89% in Delaware (versus last year’s reported 94% – a yr/yr 5% decline).
As shown in the chart below, in Delaware, the growth in the third component of personal income – transfer payments (aka Government Support) – continues to outpace the nation. Total transfer payments increased 332% in the U.S. from 2002-2020 while rising almost 400% in Delaware.
The state rose faster than the nation in all categories of transfer payments, most notably in Social Security and Medicare (beach retirees) and Medicaid (liberal eligibility requirements).

(Graph Source: U.S. Bureau of Economic Analysis)

 

The Impact of Delaware’s Relative Poor Economic Performance
The data are clear. As Delaware’s economy slows and its government grows, stagnation ensues.
This economic stagnation has a real impact:
One, our youth leave the State for growth locations and job opportunities elsewhere.
Two, entrepreneurs and growth companies skip Delaware for States that have pro-growth policies.
Three, government becomes more and more central for economic support, increasing costs to taxpayers.
All three of these forces drive the economy further into a negative feedback loop. The data above show the effect of the lack of entrepreneurial, high-value job growth in the State as well as Delaware’s government expansion into the local economy.
In the past nine years, we at CRI have implored Delaware Governors to adopt policy changes proven to increase economic activity, which in turn would increase personal incomes such as:
  • Streamline the antiquated process of directing funds to schools, which will improve student outcomes and make Delaware public schools attractive again,
  • Lessen the burden of high business taxes on small & family-owned businesses to spur growth,
  • Take the recommended and proven steps to lower the highest industrial electric rates in our mid-Atlantic neighborhood, and
  • Eliminate the Health Resources Board, whose activities have reduced easy access to healthcare in our inner cities and rural areas while failing to control high prices.
These policy recommendations have been ignored. If the status quo continues, stagnation will too.
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The Caesar Rodney Institute is a 501(c)(3) non-profit, nonpartisan public policy research organization that promotes and advocates for civil liberties, economic freedom, and limited government in the state of Delaware.

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CRI NEWS: Friday, October 8, 2021

100% Wind and Solar. 100% WRONG

By David T. Stevenson, Director
Center for Energy & Environmental Policy
October 8, 2021
Proposed legislation nationally and in some states would establish a requirement 100% of electricity be generated from “renewable” sources such as wind and solar power. This policy will lead to unacceptable electric price increases and blackouts.
Virginia approved such a plan, and now we have solid evidence of the impacts on electric rates we can expect as electric utilities file compliance plans. Dominion Power provides 80% of the Commonwealth’s electricity. Its plan would essentially double electric bills by 2030 but would only get 60% of the way to zero carbon dioxide emissions by that year. Residential electric rates would increase $800 a year, according to the utility commission staff1. The estimate rises to $1,500 a year, adding in needed transmission and distribution line additions to bring wind and solar power from distant locations. Also, actual residential demand is higher than the assumption used by the commission staff. Large industrial energy users would see bills increase by several million dollars a year.
Large increases in industrial electric bills would likely lead to companies moving elsewhere taking high-paying jobs with them, and the Virginia Plan will likely have a $25 billion a year negative economic impact. The nine states participating in the Regional Greenhouse Gas Initiative (RGGI) that taxes emissions from power plants saw Goods Production fall 7% while comparison states saw a 20% increase2.
In 2020 Texas generated 25% of its power from wind and solar, but during a cold snap, these sources fell to as low as 1.5% of available power, contributing to a four-day blackout3. Two hundred people died from the cold. California generated 30% of its power from wind and solar in 2020, but during a heatwave, generation from those sources fell to as low as 2% contributing to two days of rolling blackouts4.
Requirements for a high percentage of renewable power are often accompanied by expected increases in imports of electricity from other states and for promises from large energy users to cut usage when electric supplies are low, known as demand response. During both the Texas and California blackouts, demand response did not occur in the quantities expected. States California depends on for imports had similar power shortages and couldn’t send power, and the Texas grid is largely isolated from other states.
Both wind and solar are highly seasonal. For example, in the mid-Atlantic region, solar generation in December is just 60% of the generation in June, and of course, goes to zero after sunset while electric demand typically peaks about 7 PM (actual measurement from a solar facility in Delaware). Right now, the United Kingdom is struggling to reopen coal and natural gas-fired power plants to make up for unusually quiet winds5.
When we look at states from Virginia to Maine, with some of the most aggressive requirements for wind and solar power along with taxes on emissions from power plants, we see two disturbing trends. One is more reliance on imported power. The Virginia plan drops reliable power generation from 95% now to 45% in 2035, and imports from other states grow from 25% to 40%. The RGGI states have increased imports from 5% in 2008 to 17% in 2019. Electricity exporting states are also under pressure to reduce conventional power generation. Pennsylvania’s Governor Wolf would like to cut generation by 30% by 2030, which would end exports6. Massachusetts is importing 57% of its power, Delaware 50%7. It is likely there will be very little export power available, requiring each state to generate 100% in state.
The second trend is to require a high percentage of wind and solar be met by buying renewable energy credits. The mid-Atlantic and New England states typically have renewable mandates above 20% in 2020 yet only generated about 5% in state8. The difference was made up with renewable credits bought from other states. These high mandate states are the same states facing the highest opposition from locals to locating wind and solar projects. That opposition is growing nationally. Robert Bryce reports 317 examples of wind projects rejected by locals objecting to noise and the sight of the turbines9.
Wind and solar power also require importing large amounts of minerals, sometimes mined under deplorable conditions10. The EPA reports recycling is not economically feasible, and wind turbine blades, potentially hazardous solar modules, and batteries used for power backup will likely end up in local landfills11.
We don’t have to guess what will happen with large mandates for unreliable wind and solar power. Electric bills will at least double, manufacturing will move elsewhere, and power blackouts will occur more frequently. Rather than rush to require massive amounts of wind and solar power, we need to see how much progress can be made on new, reliable, low emission alternatives, such as carbon capture, nuclear, and hydrogen.

 

 

CRI NEWS: Friday, October 1, 2021

In Memoriam: this report was co-authored by our long-time Senior Economist and co-founder of CRI, friend and colleague, Dr. John Stapleford who sadly passed away soon after this analysis was completed. Today (October 1st) would have been John’s 75th birthday and we at CRI send our condolences and prayers to his wife (Linda) and family.

Congestion in Sussex County

Co-authored by:
Dr. John Stapleford, Co-Director, Center for Analysis of Delaware’s Economy & Government Spending
and John Toedtman, Executive Director
Released: October 1, 2021
While low property taxes, exemption of Social Security from the Delaware personal income tax, the aging baby boomers, and mild weather help attract retirees to coastal Sussex County, the major attraction is the beaches and the inland bays.
Yet, the supply of developable land near the ocean and the bays is fixed, limiting future growth. And the current limits on infrastructure, especially roads, creates an additional barrier. There is a limit to the extent of congestion that retirees will tolerate.
The latest projection (2020) of Sussex County population growth by the Delaware Population Consortium shows a steady decline from the recent annual population gains of over 2% down to 1% in ten years (2031) and 0.5% in 20 years (2041). This mirrors the experience of beach communities around the nation (think of Cape Cod).

(Source: Delaware Population Consortium)

The Consortium’s sharp drop in Sussex County’s population growth in 2021 is questionable, but the long-run trend is undeniable. The Baby Boomers generation of 60+million has precisely hit the midpoint of turning 65 years old in 2021. About 10,000 people a day from this generation are hitting 65. That will continue for another ten years, then drop rather sharply since the Generation X population (born between 1965-1980) is substantially smaller. Our guess is that the down ramp shown in the above graph will not be as sharp through 2026, but then decline will set in.
A slowdown in the population growth of Sussex County will be a blow to Delaware’s economy. Compared to Sussex County’s annual population growth of 2.3%, the annual population growth in New Castle County is 0.4%. Over the past decade, total personal income grew 40% in New Castle County and 71% in Sussex County, and per capita income increased 34% and 42%. Income from dividends and interest rose 48% in New Castle County and 80% in Sussex County. Similarly, total employment increased 13% in New Castle County compared to 24% in Sussex County.
Can anything be done to change this future scenario? There might be investments to enlarge highway infrastructure, but there are obstacles in the way.
First, the Delaware Population Consortium projections are the official numbers issued by Delaware State Planning Office and thus are investment guidelines for DelDOT and other agencies. DelDOT, for example, would look at the current projection and see little urgency for immediate highway projects in Sussex County.
Second, there have been various political roadblocks to expanding Sussex County’s infrastructure. In the 70’s when Republicans were governors, offers were made to fund expansion of east-west highways in Sussex County like routes 16, 24, and 26 (that’s the route to the beaches from metro DC and west Baltimore) but were rebuffed by some large farmers/landowners/ politicians from Sussex County that wanted to keep their rural ways.
Then, for 30 years with Democrats in the Governor’s mansion, the infrastructure dollars were nearly all spent in New Castle County in the billions spent on I-95 Christiana Mall and I-95 Astra Zeneca 202 interchanges, Middletown connector from the C&D Canal, new Bridge to Route 13 and all the highway work in and around Newark. The money goes where the votes are, and New Castle County had the votes and still does.
Finally, about ten years ago, Sussex County Government gave over complete control of all county roads to the state in exchange for promises of expansion and modernization. It didn’t happen. There were lots of planning and public meetings but no construction. That said, over $1.3 billion of desperately needed highway and road projects are in the DelDOT budget for Sussex projects and have started in earnest this year.
There may be some investments in Sussex County’s highway infrastructure, but not with speed or at the magnitude required to prevent rising road congestion from curbing the residential demand around the beaches and inland bays. The more than 7,000 already approved residential building permits currently in the pipeline mean the congestion will get worse.
What will be the impact on the Sussex County residential construction industry? Overtime spending will continue on the renovation and remodeling of existing housing. According to the Harvard Joint Center for Housing Studies, approximately 55% of residential construction spending each year comes from renovation and repairs of existing homes, including everything from new plumbing, roof replacement, and home modifications to accommodate aging owners. Construction spending on new housing is what is threatened by increasingly congested roadways.

 

 

CRI NEWS: Monday, September 27, 2021

The “Success Sequence” offers a long-term solution to Delaware violence

by Charlie Copeland, Co-Director
Center for Analysis of Delaware’s Economy & Government Spending
September 27, 2021
Delaware policymakers have promoted policies for years that have led to the breakdown of civil order in several communities in our State. These policies have promoted a sequence of “failure behaviors” that have led directly to the violence and poverty we see. If we really want to build back better, it is time to promote a new sequence – the “Success Sequence.” It really works!
Introduction
According to Delaware Online data from August 19, 2021, in the past 365 days, gunfire in Delaware has caused 249 injuries and 90 deaths. The News Journal titles its piece, “A year of gun violence.”
(See graphic below – Source: Delaware News Journal)

Gun violence in Delaware has been bad for a really long time (Perhaps you might remember the “Murder Town USA” moniker applied to Wilmington by Newsweek magazine back in 2014.). In desperation, Wilmington’s City Council asked the Center for Disease Control (CDC) for a health assessment of the city and to make recommendations to solve the problem. In 2015 the CDC issued a lengthy report with numerous recommendations (largely shelved).
And six years on, the violence grows and further threatens Delaware’s reputation and quality of life.
Delaware and the City of Wilmington’s policy leaders have been looking in the wrong places for solutions to gun violence. In fact, the policies implemented by Delaware’s government might have actually led to this violence because these policies have destroyed the foundations upon which successful long-term poverty eradication, and therefore, violence eradication rests.
A Thought Experiment – Delaware’s “Failure Sequence”
Let’s try a brief thought experiment. Imagine dropping out of high school (think back to your 16-year-old self) – and when you dropped out, you were two, four, or even eight years behind “grade level” (specifically, imagine your 16-year-old self with only a 4th-grade education).
Further, imagine that you had been raised by a well-meaning, single parent who also missed out on an education, rarely held a job, and never married, and had always been receiving some type of welfare without work requirements.
Finally, imagine that you cannot get a job because few employers will risk paying a high school drop-out Delaware’s minimum wage (which will soon equate to a $30,000 per year salary.).
So, put yourself in the position of no education, no family support structure, and no job opportunities while living in a neighborhood where everyone else is in the same position as you. What would you do at the age of 18, 20, or 25 years old? You have to eat and clothe yourself – indeed, you want to survive.
Suddenly, the idea of joining a gang and moving up the hierarchy of that gang by whatever means necessary starts to look like a good option.
This is Delaware’s “Failure Sequence,” and Delaware public policy actively supports it.
The “Success Sequence”
In 2009, Brookings Institution scholars Isabel Sawhill and Ron Haskins proposed a different model of social development. They called it the “Success Sequence.” Sawhill and Haskins demonstrated from demographic data that if a person followed the “Success Sequence,” they had a less than 5% chance of ending up in poverty. The sequence to success?
1.    Graduate from high school,
2.    Get a job – any job,
3.    Get married prior to having any children.
That’s it. A simple set of goals to create effective government policy that lifts thousands of Delawareans out of poverty, thereby reducing violence in our State.
Evidence that the “Success Sequence” works continues to roll in
Recognizing that Progressives were calling the “Success Sequence” racist and/or “old fashioned,” in 2017, American Enterprise Institute scholars Brad Wilcox and Wendy Wang conducted a study to measure the impact of the “Success Sequence” on millennials.
Could they confirm the outcomes of the Success Sequence remain as effective as the original research discovered? According to Brad Wilcox, “We found that 97% of millennials who followed the success sequence are not poor and are in the middle-income track by age 30.
“Based on every indicator, from our perspective, the success sequence is still quite relevant and compelling.” Dr. Wilcox goes on to state, “Fully 86 percent of young adults who married first have family incomes in the middle or top third. Compare that to only 53 percent of millennials who put childbearing before marriage.”
The research also confirmed that the success sequence holds true for racial and ethnic minorities, as well as young adults in lower-income families with “76 percent of African American and 81 percent of Hispanic young adults who married first are in the middle or upper third of the income distribution.”
Conclusion
A definition of insanity is doing the same thing over and over again while expecting a different result. According to this definition, Delaware’s policymakers are insane. They pour more & more money into failed government-run schools with no evidence of improvement or accountability thereof.
They continually raise employment costs ensuring the young people cannot get jobs. They have turned a social safety net into a hammock – trapping families in a web of lost opportunity and gun violence.
The good news is that we know the policies that need to be in place for our young people to move out of and stay out of poverty – that is, get a high school education, get a job, and then get married prior to having children.
In our urban and rural settings, Delaware policymakers have made this sequence very hard to follow. The results of Delaware’s failures are plain for all to see in the violence in our communities.

 

 

CRI NEWS: Tuesday, September 15, 2021

If I Were a Rich Man

by John Toedtman, CRI Executive Director
September 15, 2021 (originally published 9/14/2021)
Governor Carney is a rich man with over $1 billion in the bank! See below our recommendations on how the state can spend this money wisely.
Buy-Out Bloom Energy Contract with Delmarva
The commercial electric rates for manufacturers in Delaware are high, so businesses don’t locate here if they use a lot of electricity and why some companies (like the steel mill in Claymont) have moved away.
The state can lower electric rates by (a) negotiating a buy-out for the high-priced long-term Bloom Energy contract for $125-$150 million (there is about $400 million in remaining payments); (b) and by eliminating the “Gross Receipts Tax” on electric utility revenues that collect less than $50 million.
Both cost less than $200 million and would result in Delaware having more competitive electric rates to compete with other states (a win-win for businesses and the Delmarva power customers).
Buy-Out Bloom Energy Contract with Delmarva
The commercial electric rates for manufacturers in Delaware are high, so businesses don’t locate here if they use a lot of electricity and why some companies (like the steel mill in Claymont) have moved away.
The state can lower electric rates by (a) negotiating a buy-out for the high-priced long-term Bloom Energy contract for $125-$150 million (there is about $400 million in remaining payments); (b) and by eliminating the “Gross Receipts Tax” on electric utility revenues that collect less than $50 million.
Both cost less than $200 million and would result in Delaware having more competitive electric rates to compete with other states (a win-win for businesses and the Delmarva power customers).
Renovate Delaware’s Abandon Sites/Buildings
Because it can take a year or more to get necessary approvals, potential companies looking to locate in Delaware don’t want to go through the hassle of moving here.
The state should renovate six abandoned sites/buildings throughout Delaware (upgrade parking, electric, lighting, etc.); when these renovations are completed, they can be sold or leased. These buildings were built there in the first place because of the terrific location; Advertise them in the Factory Relocation magazines, “Ready to move in factories with no waiting.”
This will cost under $75 million and result in good-paying factory jobs and erase some industrial blight.
Adjust Delaware’s Personal Income Tax Rate Structure for filers $25k-$60k
According to the 2019 IRS data, Delaware filers with incomes between $25,000 and $60,000 account for 12.2% of the state’s income but are paying 25.1% of the state’s total income tax collected- grossly not fair.
To be fair, the state should direct the Delaware Division of Revenue to adjust the rates for this group (Delaware filers $25K – $60K) to eliminate this disparity. Also, note that nearly 65% of all Delawareans pay the top income tax rate of 6.7%.
This will cost under $200 million and will yield higher economic growth for Delaware.
Save the Indian River Power Plant in Millsboro
The Indian River Power Plant in Millsboro, DE, is scheduled to close in 2022 due to low income earned as a standby facility. The plant employs about 70 union workers at an average annual salary of $75,000. Delaware buys more than 50% of its energy from out of state.
“Carbon Capture” is a new technology that strips the CO2 out of the emission stream and has been shown to work effectively in large demonstration projects like the “Petra Nova” project. The ‘captured’ CO2 is compressed and sold for different applications at prices ranging from $30 per ton to $90 per ton.
The Indian River plant produces 322,000 tons of CO2 per year. Total costs to implement the carbon capture process are estimated at $80-$100 million.
The state should put $40 million on the table to start negotiations. As Chairman of the Senate Environment Committee, Senator Carper can play a key role in getting the DE Department of Energy to help with funding.
This will cost under $50 million and Delaware can get a nice slice of the CO2 sales for many years.

 

CRI NEWS: Tuesday, September 14, 2021

Why Offshore Wind Faces Lawsuits

By David T. Stevenson, Director
Center for Energy & Environmental Policy
September 14, 2021 (originally released on 9/13/2021)
Nantucket residents have filed a landmark lawsuit over federal approval of Vineyard Wind, the first industrial-scale offshore wind project in the U.S. Federal law protects existing ocean uses: commercial fishing, vessel traffic, the viewshed, and endangered species from new energy projects. Since federal approvals of all offshore wind projects will likely use the same flawed process, a court win for this lawsuit may stop all the projects.
Those Nantucket residents are not alone. Beach communities from North Carolina to Maine and the Great Lakes joined together to form the American Coalition for Ocean Protection. The groups share information, resources, and strategies to be watchdogs against misguided federal and state offshore wind policy and have started a common legal defense fund.
President Biden set a goal of 30 gigawatts of offshore wind to reduce carbon dioxide emissions. The EPA created a calculator that shows the impact of such cuts would reduce global temperature by an insignificant 0.004 degrees Fahrenheit. The US Bureau of Ocean Energy Management (BOEM) and the NOAA Fisheries Service failed to use the best available science in its approval process.
Loud turbine installation activities and continued turbine operations threaten the critically endangered North Atlantic right whale. New studies found more frequent whale sightings and more operational noise interference from a switch to larger turbines by the developer. The threat of a lawsuit resulted in the NOAA Fisheries Service promise of a new study, but with no timeline for completion. The plaintiffs want the development stopped until the study is completed.
Turbine blades sweep an area the size of eight football fields with blade tips whirling at up to 180 mph, posing a hazard to birds in the Mid-Atlantic Flyway. Thousands of miles of high voltage cables will bring power ashore. Acres of concrete and rocks will be placed on the seabed to prevent scouring, changing the ocean habitat risking death to marine life at the bottom of the food chain. No studies have been done to estimate the potential loss of marine and avian life.
Thousands of Chrysler Building-sized turbines could occupy Vineyard Wind and six other adjoining leases covering an area the size of Rhode Island. Tourists may not return to beaches with visible turbines. A BOEM study with smaller turbines determined they would “dominate” the horizon at 15 miles, and a second study showed up to 38% of beach renters would not return if turbines were visible. BOEM ignored both studies. Instead, BOEM used a tourism impact study that one of its authors has stated is not applicable for the larger turbines planned for the Vineyard Wind project.
BOEM moved a lease area near Kitty Hawk National Park 28 miles from shore to protect the view. New York State created a 20-mile exclusion zone based on the BOEM study, canceled a lease area 12 miles off the Hamptons, and BOEM approved the cancelation. However, BOEM still supports turbines as close as 14 miles from Nantucket and between 10 and 15 miles in most of the 17 lease areas planned along the east coast.
Experiences in Europe and BOEM’s own remarks suggest commercial fishermen will abandon prime fishing grounds covered with turbines. Concerns over potential damage to fishing gear increased vessel collisions, and the higher cost of insurance are the driving factors. The 900 feet tall turbines drove a Coast Guard determination that the Search and Rescue operations would be compromised, adding to safety concerns.
Turbines also eliminate the ability to do estimates on the population of commercial seafood species to establish “take” limits. BOEM decided finding a new population estimate procedure would take too long. Timing on a solution was left indeterminate, if ever.
The lack of answers to so many critical questions is a direct result of BOEM releasing a “Final Environmental Impact Statement” just nine days after accepting the developer’s permit request. BOEM has provided a target-rich arena for litigation.
Besides the legal issues, Vineyard Wind will cost about 10 cents/kilowatt-hour over its expected 20-year life, according to the National Renewable Energy Laboratory, over three times as much as the current wholesale price of power. Even solar and onshore wind power is much less expensive at about $0.04.
Considering the higher cost of electricity, lost tourism, and fishing, the President’s offshore wind plan might cost half a trillion dollars and 150,000 jobs. Over $250 billion may go to Europe to pay for turbines, vessels, installation crews, and subsidies paid by Americans.
David T. Stevenson is Director of the Center for Energy & Environment at the Caesar Rodney Institute and a founding member of the American Coalition for Ocean Protection

 

CRI NEWS: Wednesday, June 30, 2021

Delaware Manufacturing Job Growth Opportunity

By Charlie Copeland, Co-Director
Center for Analysis of Delaware’s Economy & Government Spending

Delaware has suffered a 31% decline in high-paying manufacturing jobs over the last 18 years. With federal funds from Covid stimulus legislation and tweaks to the State’s site and business permitting process, Delaware could position itself for decades of manufacturing job growth.

The Situation today

Delaware, its counties, and several municipalities are set to receive an enormous amount of money from the Federal government’s pandemic-driven federal legislation. While one can argue whether these funds are necessary given the rapidly growing US economy, the money is coming.
With this incoming cash, our local governments are now debating what to do with these funds. The proposals tend to reflect one end or the other of the adage, “Give someone a fish to eat today, or teach them to fish to eat for a lifetime.” But these proposals miss an important point… Are there even fish in the lake? In other words, are there high-paying skilled jobs in Delaware for our citizens? The answer to this question is increasingly “No.”
As the chart below shows, since the early 2000s, Delaware’s economy has lost 31% of its traditional manufacturing base. During this same period, the credit card industry in the State reached maturity. It began shedding high-paying jobs – replacing them with lower-paying call center and operational positions. Demographically in the State, CRI’s senior economist Dr. John Stapleford recently pointed out troublesome demographic shifts in Delaware, which will further curtail economic growth.

 

Preparing for Delaware’s Manufacturing Opportunity

But, all is not lost; Delaware has an opportunity to “restock” the lake with fish. Northern Delaware has over half a dozen former industrial sites waiting to be cleaned up and waiting for infrastructure upgrades. By making a one-time investment from one-time federal funds into these sites, Delaware can create a magnet for private sector business investments in these locations. Imagine close to a dozen industrial sites ready for new, clean American manufacturing.
This true infrastructure investment would be a good start, and the next step will not cost any money. Delaware needs to dramatically improve its permitting process for business site investments. This requirement was made clear in a 2019 report released by the Delaware Business Roundtable on Delaware’s job-killing permitting process.
As stated in the report, “The permitting process plays an important role within the site selection process. Site selectors and investors often view the process as a barometer for measuring how business-friendly or supportive a state or local community is to economic development and new investment.” And Delaware is viewed as unfriendly. As a matter of fact, one national manufacturing site selection expert stated that “Delaware is not on anyone’s list.”
Adjacent states can often complete site and business permitting in six months. In Delaware, it can take as long as two years. Job creators have options, and they are opting to go to other states where they can get their businesses operating in one-quarter of the time than it takes in Delaware. The proof of Delaware’s failure is in the continued decline in our manufacturing employment, while nationally, manufacturing has been growing as the US continues to on-shore production from China.
Delaware’s site and business permitting process could be quickly streamlined by reassigning a few State employees into “permitting-process concierges” who would keep track of the status of major projects (e.g., over $5 million in investment). At the same time, the State should create a government website “dashboard” giving the status of all aspects of investments in the permitting process detailing when permits were submitted, the amount of time waiting for initial comments, and what agency is currently holding a permit (and for how long). These two steps – the concierge and the dashboard – would bring transparency and accountability to a very diffuse process.
As seen in the diagram below, the efficiency gains and job growth tax benefits would create a windfall for Delaware – helping to restock our “lake with fish.”

(Chart Source: Delaware Business Roundtable “Ready in 6” report)

 

Conclusion

Let’s be honest, Delaware does not have the ability to simply hand out money into perpetuity, and provide job skills when there are no high-paying jobs available.
With some simple improvements in the permitting process combined with the preparation of over half a dozen former industrial sites, Delaware could prepare itself for economic growth for the next 25 years.

 

 

CRI NEWS: Thursday, June 24, 2021

Delaware Population Numbers Promises Low Economic Growth

By Dr. John Stapleford

Growth in population drives economic growth. A growing population increases demand for goods and services, and a growing working-age population means increased production.

How is population growth doing in Delaware?

ANSWER 1: Since the last published census (2010) through 2019, Delaware’s population has grown at 0.9% per annum-see bar chart below.

ANSWER 2: Delaware’s overall growth rate of 0.9% masks tremendous differences in population growth across its counties-see bar chart below.

Two components comprise population growth: natural increase (births minus deaths) and net migration. Statewide, Delaware net migration accounted for 70% of the population change between 2010-19. In Sussex County, net migration accounted for 102% of the population change (deaths exceed births) compared to 67% in Kent County and only 12% in New Castle County.

Young people move into counties with good job opportunities while older folks migrate to counties with warmer weather, amenities (e.g., beaches, lakes), and lower taxes. Employment is not growing in New Castle County. The total regional population over age 55 is soaring and thinking about retirement.

Net migration includes both domestic migration (U.S. residents changing location) and international migration. Over 97% of the net migration into Sussex County from 2010-19 was domestic and 67% of the Kent County net migration. New Castle County had net domestic out-migration that was offset by net international in-migration.

What may be expected looking forward?

Sussex County’s net migration will slow as a growing population clogs the roads and the beaches. Regardless, the population growth in Sussex County will continue to add to consumption demand while doing little to boost economic productivity in Delaware. Burdened by strict environmental land use regulations and poor public schools, net domestic out-migration from New Castle County will continue.

Ultimately, below-average population growth will constrain future Delaware economic growth.

 

CRI NEWS: Tuesday, June 22, 2021

 

To be or not to be Vaccinated

by Dr. Christopher Casscells, M.D.
Director of the Center for Health Policy
Caesar Rodney Institute
June 15, 2021

According to the U.S. Food and Administration’s (FDA) Emergency Use Authorization Act (EUA), it is illegal to require someone to get vaccinated. All vaccines are designated as cleared for experimental use only and not required by any legal entity in the United States.

So, is it wise for you to get the COVID-19 vaccine? First, you should check to see if you have been exposed to COVID-19.

If you have been exposed, having already had COVID-19 is a contraindication to vaccination, as confirmed by a recent medical research by the Cleveland Clinic Health System. The study showed no additional benefit of vaccination in those individuals who have previously been infected with COVID-19. This is a cardinal principle of epidemiology and infectious disease.

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