Message from the President

BY MICHAEL J. QUARANTA

WHAT WOULD YOU DO if someone handed you a bill for $250 million dollars and needed payment in full by July 1? Then later that same year in maybe November or December, you receive word that you need to pay another $250 million dollars on top of what you just paid. Going forward, it becomes clear that you need to find an additional $500 million as taxpayers who had the option to pay you are leaving. A scenario like this is more likely than some would care to admit if we don’t take care of our franchise tax and all the moving parts that make it a substantial revenue stream.

The numbers I quoted are, of course, made up. However, depending upon the circumstances, those figures could be much worse. The State of Delaware is the recipient of about $2.5 billion of revenue from outside of its borders, and that’s just over a third of the entire state budget.

The State of Delaware is the recipient of about $2.5 billion of revenue from outside of its borders, and that’s just over a third of the entire state budget.

Now, come on, Mike, that’s not at risk and we’ve had this stream of income forever; you’re just being alarmist. Really? A little history here is in order. Back in the late 1800s, New Jersey was the place to incorporate. However, with a number of laws and cases that went directly counter to the interests of business (search Woodrow Wilson and Seven Sisters case), New Jersey lost the trust of corporate America, and once that’s gone, it’s never coming back.

It took Delaware decades—starting in the early 1900s—to grow what today is a handsome revenue source. No other state in the union has this deal, and it’s not like other states won’t work hard to undermine us and take it for themselves. So what signal are we sending to businesses around the country? Are we acting unified? We certainly should be.