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Written on: July 30th, 2013 in Effective & Efficient Government
At a time when partisan talking points too often drown out genuine attempts to improve government, Delaware’s Democrats and Republicans have found common ground on an issue central to putting people back to work: getting rid of bad regulations.
Thoughtful, effective regulations help ensure that we live in safe communities and give businesses a fair chance to compete. But too many rules are outdated, ineffective or overly complicated. They slow economic growth, overburden government and distract all of us from our priorities.
In Delaware, we recently completed a yearlong review that evaluated regulations based on whether they serve a necessary purpose or could be made simpler and more effective. Our wide range of prominent industries, from biotechnology to poultry processing, generates diverse regulatory concerns and allows Delaware to serve as a useful national model.
For example, the state Department of Transportation used to require new entrance permits for commercial properties every time a property changed hands. Even if a business was a drugstore, had always been a drugstore and would always be a drugstore, each property sale required new permitting. That was burdensome and didn’t make anyone safer. It will no longer be required.
Another regulation required installing sidewalks for all new development, adding unnecessary costs to homes, businesses and even firehouses built in rural areas.
The result was the construction of sidewalks to nowhere. Although sidewalks have many benefits, the overly broad application of this rule had little public benefit and added costs to new construction. We will be modifying the requirement to provide builders with more flexibility.
Previously, business owners who needed to retrofit above-ground storage tanks had a limited time — just 60 days — to complete a project or they would need a new permit. That put undue pressure on companies trying to run their day-to-day operations. We’ve extended the time frame to a year and required the agency involved to respond swiftly to requests for approval of retrofitting proposals.
In sum, we are modifying or eliminating 140 regulations out of about 400 considered, with a focus on older regulations that most likely need to be updated.
There will always be a need for regulations that protect our health, environment and public safety. One clear example: a proposal to require Delaware homes that are dependent on well water to perform a test when the property is being sold to provide the buyer with water-quality information. Some argued that we should just let the buyer beware, but we disagreed. Clean drinking water is too important.
Although state employees and politicians came up with some good ideas about making our regulatory systems smarter, some of the best ideas came from the people who know best: local businesses and individuals who have to comply with the rules in the first place. Twelve state agencies that oversee regulations held three town-hall meetings to allow the public to express their views.
The revisions to the rules on entrance permits and sidewalk construction were among those that arose from public comments. In other cases, we explained why proposed changes, such as allowing asbestos workers to complete their annual license renewal by mail rather than in person, would not work. We opposed this due to past instances of fraudulent documentation.
This process of public engagement will continue. In an era when businesses have more choices than ever about where to locate, being smart about our state’s regulatory system is even more important.
Many politicians impede progress by reflexively condemning regulations without distinguishing between rules that work and those that don’t. This approach only produces political theater. By collaborating with business and responding clearly to everyone’s concerns — whether we eventually agree or not — leaders can make regulatory reform a part of economic growth plans.
This blog was originally published on BloombergView.
Written on: July 29th, 2013 in Helping Our Neighbors
Guest post by the First Lady of Delaware, Carla Markell.
Four years ago, Wilmington’s H. Fletcher Brown Boys and Girls Club nearly closed its doors, ending the phenomenal services they provide children at critical times in their development. When my husband, Jack, his staff and I signed up to paint the building as a community service project, we learned the building had much more serious problems: a need for heating, ventilation and air conditioning (HVAC) system repairs, faulty boilers and a leaky roof, to name a few.
It was a dispiriting situation; however, the disappointment spawned a great Delaware success story. A combination of efforts by businesses, community leaders and kindhearted volunteers transformed the facility from an apparent state of disrepair into a welcoming place with a bright future for serving area children.
Astra-Zeneca stepped in with initial seed money to help with HVAC, electric and roof repairs. Other companies followed, providing for renovations of the computer lab and lobby, new electronic equipment, furniture and a book drive. Meanwhile, compassionate citizens who never gave up on Fletcher Brown donated increasing amounts of their time to run programs at the center. The effort at the Brown club inspired additional companies, foundations and individuals to come forward to renovate the Clarence Fraim Boys and Girls Club.
Project Renewal has demonstrated the chance for every individual to make a difference, as well as the endless possibilities to build a better Delaware when we all work together. With continued community support and wonderful leadership from the Boys and Girls Club Board, this effort was duplicated during the 2013 Governor’s Week of Service Kick-Off and April Week of Service at the Laurel Boys and Girls Club. Renovations and upgrades also are underway at the Smyrna-Clayton facility, including a new roof, electrical system and flooring. If you are interested in taking part in the project, please contact Sharon Biddle at 658-1870.
At the Wilmington, Smyrna and Laurel facilities alone, more than 1,700 kids ages 6-14 attend the after-school programs. Sixty percent of club youths come from low-income families. Students receive assistance with schoolwork, pursue interests from arts to athletics and have a safe place to grow, learn and build great futures.
Project Renewal represents just one of hundreds of programs run by nonprofits, schools and other organizations to help Delaware reach its potential. They mentor children, deliver meals to seniors and serve the disabilities community. Others renovate dilapidated buildings, beautify our natural resources and give struggling families a path to self-sufficiency. Almost none can reach their goals without volunteers.
The Corporation for National and Community Service (CNCS) has confirmed Delawareans’ commitment to serving others, even after many volunteers’ families were hit hard by the national recession. Our state had the greatest percentage increase (5.3 percent) in volunteering from 2010-11.
According to CNCS, in 2011:
• 65.4 percent of Delawareans did favors for their neighbors.
• 186,760 people volunteered.
• 21.2 million hours of service were performed.
• $462.8 million of service was contributed.
Giving back goes well beyond specific acts of service. It offers a sense of purpose, provides opportunities for physical activity and helps build social relationships, while binding us together and enhancing our sense of community. As the only state that offers a Volunteer Credit for high school students, we must support efforts that give our next generations ways to contribute in their communities. According to a study by CNCS, volunteering even makes us healthier, as shown by lower mortality rates, greater functional ability and less depression later in life among those who volunteer.
The weeks of service held each year since Jack became governor have given us the opportunity to highlight the incredible outpouring of kindness displayed toward friends, neighbors and total strangers every day across our state. We’ve been proud to join the thousands of mentors and tutors who provide that extra measure of support and encouragement for Delaware’s children. At shelters, food banks and mobile health clinics, we’ve seen those who are more fortunate offering comfort to individuals facing hard times.
As part of increasing momentum behind volunteerism, Jack and I will present the Governor’s Outstanding Volunteer Awards this fall. You can nominate Delawareans who have performed extraordinary service in our communities by visiting https://volunteer.delaware.gov. It’s important that we demonstrate our gratitude to those who make a special commitment to keeping Delaware a wonderful place to grow up, work, raise a family and retire.
While you’re on the site, I hope you will seek out opportunities to get involved with one or more of the many organizations listed. If you have any questions or want to participate, please contact Carrie Hart at 857-5006 or carrie.hart@delaware.gov.
There are ways to get involved that tap into everyone’s strengths. I encourage you to use them as a chance to follow your passion. Together, we can replicate the story of Fletcher Brown across our state, improving the lives of Delawareans and creating a positive and healthy future for all.
This blog was originally published in the News Journal.
Written on: July 22nd, 2013 in Effective & Efficient Government
On July 17, I signed into law a bill enabling the formation of a new type of corporation that is hard wired to compete to be the best in America at being the best for America.
These new Delaware public benefit corporations will harness the power of private enterprise to create public benefit. In the short term, they will create high quality jobs and improve the quality of life in our communities. In the long term, as many enter the public capital markets, they will help combat the plague of short termism that we have seen over the last five years can undermine a shared and durable prosperity.
Some of the most innovative and fast growing private companies in America — like eco-home care brand Method, organic baby food business Plum Organics, fair trade company Alter Eco, and green paper supplier New Leaf Paper — will be among the first to register as Delaware public benefit corporations on August 1st when this law goes into effect.
These businesses, and over 100,000 like them, are profitable, but consider profit to be the means — not the exclusive end goal — of their business. They see profits as a means to fuel growth in social impact as well as to generate attractive returns for stockholders.
Through meetings over the last several years with my staff, the Corporation Law Council of the Delaware Bar, and the Court of Chancery, it became clear that a new Delaware corporate entity was possible that can bring together these innovative business leaders and the investors who want to back them, while maintaining the high standards that are the hallmark of Delaware corporate law.
Many of the businesses considering this new corporate structure — like waste management firm Rubicon Global, e-commerce platform Etsy, and eyewear industry disruptor Warby Parker — feel understandably constrained by existing corporate law that recognizes only one legitimate corporate purpose — to maximize value for stockholders.
Delaware public benefit corporations will function like and enjoy all the same benefits as traditional Delaware corporations and they will have three unique features that make them potential game changers. These three features concern corporate purpose, accountability, and transparency.
The creation of Delaware public benefit corporations is a powerful, no cost, market-based solution to the systemic problem of short termism and an innovative approach to using market forces to solve our most challenging problems.
Because of Delaware’s leading role in U.S. corporate law, enactment of benefit corporation legislation in my state is critical for these businesses that seek access to venture capital, private equity, and public capital markets.
Public benefit corporations are not a replacement for traditional corporations in America. But as the next generation of publicly-traded companies comes into being, benefit corporations will be among them, helping to build public trust in business, and becoming an attractive investment opportunity for the growing number of investors who increasingly want to make money and to make a difference.
And that’s best for America.
This blog was originally published in the Huffington Post.
Written on: July 19th, 2013 in Job Creation
In Delaware, we listen to the priorities of our businesspeople. By working with them on all fronts, from driving down costs to improving our education system, we make the First State a great place to start a new company or expand a growing one. Last month, experts from the Federal Reserve Bank of Philadelphia confirmed that Delaware’s economy is “well-positioned,” for “decades of growth ahead.” They credited our state as a “first mover” in identifying opportunities for growth and praised our portfolio of generally high-wage industries.
Delaware offers a high quality of life, with beautiful beaches, parks, scenic farmland, a vibrant arts community, and a rich cultural and historical heritage. Furthermore, our long-time leadership in corporate law and our Court of Chancery’s unmatched expertise in this area have repeatedly earned our state acclaim as the most fair and reasonable legal system for U.S. businesses.
We’re committed to taking advantage of these assets and our policymakers’ work demonstrates the state’s dedication to meeting the needs of our many innovative and hardworking businesspeople.
Recent legislation places tighter controls on workers’ compensation medical costs and ensures that insurance carriers’ requests for rate increases receive a high level of scrutiny to tackle recent increases in premiums. We have also reformed of our unemployment insurance system to reduce the burden on employers and have focused on lowering gross-receipt taxes.
As part of our efforts to ensure entrepreneurs have access to the resources they need, we helped launch Start It Up Delaware, a public-private partnership that brings together our financial, accounting, legal and real estate communities to assist new companies. To drive down energy costs for businesses and families, we’ve focused on inexpensive and cleaner-burning natural gas, and last month, Calpine Corporation broke ground on a new power plant in Dover that is expected to serve about a quarter of a million homes.
Meanwhile, we are modifying or eliminating more than 140 state regulations to make it easier to do business and to improve government efficiency. In departments large and small we looked for and found ways to reduce paperwork, streamline permit applications and eliminate unnecessary rules, without sacrificing public safety. As a result of these changes, entrepreneurs and established companies can spend time building their businesses and hiring instead of filling out forms and waiting in line.
Supported by Democrats and Republicans, the regulatory reform process demonstrates our ability to bring together the right people and engage the public to make good decisions. Our close-knit community consistently allows business leaders to work together with government representatives at the federal, state and local level to resolve challenges.
Moreover, Delaware’s convenient location provides easy access to many major cities, including New York and Washington, as well as many transportation alternatives – international airports, Amtrak rail service and interstate highways – that put the rest of the world within quick reach. Recognizing our increasing reliance on the Internet to communicate and do business, we also prioritize maintaining the country’s best broadband infrastructure. Delaware has the fastest connection speeds in the country, nearly nine percent faster than our closest competitor last year.
We understand that entrepreneurs want to locate in areas with great schools that produce a skilled workforce. After our education plan finished first in the Race to the Top federal funding competition for its capacity to improve student performance, we continue to move forward. The Education Commission of the States recently awarded Delaware the Frank Newman Award for State Innovation, which recognizes creative changes that boost student learning.
We’re increasing enrollment in high-quality early education, raising standards in our public schools as a leader in implementing the Common Core curriculum and working with the business community on STEM programs that are relevant to the job market. For current workers, our Department of Labor is partnering with employers to establish a career readiness credential that companies can respect and trust.
As global businesses choose where to locate, we understand it serves them well to hire employees who can communicate with the markets they serve. We’ve started world language immersion programs in which students spend half of each school day learning in Chinese or Spanish, beginning in kindergarten. We expect them to be able to pass their Advanced Placement Language exam by ninth grade and, over the next decade, we plan to reach more than 10,000 young people.
As concerns about jobs leaving the country intensify, Delaware companies in advanced industries are bringing jobs back from abroad. ILC Dover, known for making spacesuits for NASA and personal protection equipment for military, Homeland Security and industrial users, moved manufacturing operations — and the accompanying 115 jobs — from Mexico to Seaford. And Hologic, a leading manufacturer and supplier of diagnostic, surgical and medical imaging equipment, has decided to move jobs here from Germany.
Delaware has a strong foundation to compete, lead and win on the global stage for many years to come, and I’m confident our economic successes will continue to multiply.
This blog was originally posted on CNBC.
Written on: July 12th, 2013 in Job Creation
As U.S. policymakers focus on putting Americans back to work, we must concentrate in part on opportunities beyond our own borders.
That’s why it’s so important that Congress reauthorize the State Trade and Export Promotion (STEP) program, which is due to expire next year.
Let’s face reality: Plenty of economies around the world are growing faster than our own. Shouldn’t we do all we can to ensure that American workers can participate in that growth?
In 2012, exports generated 9.8 million American jobs. STEP has a proven track record of creating those jobs.
The program recognizes that our small businesses have high-quality products and services that are in demand worldwide, but that they don’t have the scale or training to start aggressively pursuing overseas markets on their own. Different languages, economic systems and political cultures all present barriers. Through STEP grants from the Small Business Administration (SBA), state offices of international trade offer local companies foreign trade missions, translation support, marketing assistance, trade show exhibitions and other export-related efforts.
With an investment of $30 million, out of a more than $3 trillion federal budget, STEP affected more than 1,600 small businesses across the country in its first year. According to the SBA, the program enabled $74 million in actual sales and an expected revenue stream of more than $225 million based on continuing business development activities.
In Delaware, we have worked with Department of Commerce officials abroad to match our firms with interested buyers in high-value markets, including China, Brazil and South Africa. With this little extra boost, our entrepreneurs are able to make the difficult leap into expanding economies with untapped and rapidly growing communities of potential customers. The overseas interactions have lasting benefits, as entrepreneurs build new relationships that can serve as a catalyst for growth for many years to come. Furthermore, once companies start exporting, the process of entering additional markets becomes significantly easier.
The small businesses taking part in Delaware’s international trade missions have already reported nearly $4.4 million in new business as a direct result of our state’s $430,000 in grants. One Delaware entrepreneur had tried to sell his firm’s innovative pesticide detection systems in China previously but couldn’t get the right meetings to close the sale. The STEP trade mission led to sales within a few months, and the company continues to work on new transactions with Chinese end users and distributors. If U.S.-based firms do not perform this type of outreach now, others will, and our losses will be measured in fewer American jobs.
The backing of Democratic and Republican governors shows the potential for bipartisan action, but we have often been disappointed by Congress’s ability to reject broadly supported ideas because of partisan politics.
As I wrote in a letter this month to Speaker John Boehner (R-Ohio) and Senate Majority Leader Harry Reid (D-Nev.), a long-term re-authorization of the program will create sustainable jobs and further strengthen our nation’s global competitiveness. We simply can’t expect to compete if our businesses do not have access to the 95 percent of consumers who live outside the country.
Our small businesses and start-up companies deserve certainty that the pathway STEP provides to the fastest growing marketplaces in the world has a future. Increased sales will allow those businesses to put more Americans to work, and that’s an outcome that leaders of all political viewpoints can endorse.
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