2012 Legislative Wrap-Up

PHOTO BY DICK DUBROFF/FINAL FOCUS

2012 Legislative Wrap-up

BY RICH HEFFRON

IN THE SPRING, the Delaware Economic and Financial Advisory Council projected just a small budgetary increase in 2012, prompting the General Assembly to pass a $3.9 billion Fiscal Year 2013 operating budget. The problem that they now face is a revenue drop of about $60 million in FY 14 and another $100 million in FY 15. With caution in mind, this legislative year actually turned out to be a rather routine session.

This year the General Assembly fulfilled last year’s promise to end its traditional last-minute budget battle by having the spending bills available for review several days before the June 30 deadline. Once again the Joint Finance and Bond committees made their decisions in open session, establishing a new tradition.

Several legislators commented that these open sessions actually made the process much less tiresome and more enjoyable.

Now, the public can truly understand how tedious the process of allocating the state’s money can be. As is usually the case, the administration was successful generating support for most of its key proposals. Investment in economic development continues to DELAWARE BUSINESS

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be a major factor in budgeting dollars, as is education, and infrastructure financing.

Beginning with the final terms of now-retired Speaker of the House Bob Gilligan and Senate President Pro Tempore Tony Deluca, most of the controversial legislation was addressed early in the session, thus avoiding of the late session contention of earlier years. All these factors contributed to a generally quiet legislative session for the business community.

Taxes & Spending Legislators fear for a potential revenue loss down the line, so very little was done with tax or fee bills this session. The General Assembly did adopt (and Governor Jack Markell signed) HB 251 (Longhurst D–Dist. 15) that eliminated the $100,000 license fee paid by firms engaging in oil lightering operations in the Delaware Bay. The abandoned property statute was amended under SB 258 (DeLuca D-11th Dist). This creates an additional incentive for 11

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2012 Legislative Wrap-up

holders of abandoned property to report such property to the state and promptly resolve claims in a process that would limit the reporting of abandoned property to 1996 or 1993, rather than the current obligation of holders to report abandoned property back to 1981.

Education Last year the General Assembly passed (and Gov. Markell signed) SB 16 (Sokola D-8th Dist), allowing school districts to base hiring and spending decisions on an estimated unit count each March, rather than the previously required September date.

There was a sunset attached to this bill, and this session Senator David Sokola sponsored and the governor signed SB 164, which eliminates this provision. Retiring Rep. Terri Schooley (D -23rd Dist.) sponsored HB 239/HA1 which repeals the April 2012 sunset provision attached to the statute authorizing it as a route to teacher licensure and certification.

Negotiations related to an update of the charter school statute continued without a final agreement. This year, the Delaware State Chamber of Commerce will continue to express its support for comprehensive revision of the state’s charter school law.

Economic Development With Bloom Energy breaking ground for its east coast plant at the former Chrysler site in Newark, Amazon constructing a facility in Middletown, and various other projects such as the rejuvenation of the Delaware City Refinery and Calpine’s plan to build a natural gas-fueled generating plant in Dover, the Delaware Economic Development Office’s efforts continue to provide opportunities. The General Assembly approved $30 million for the Strategic Fund and an additional $6 million for specific projects in the Bond Bill to fuel further job creation efforts.

Labor When the updated workers’ compensation statute was made law six years ago, the General Assembly promised to make improvements to Delaware’s workers’ compensation system. They have. In order to facilitate and hospital and surgery center compliance held within the workers’ compensation statute, the General Assembly passed SB 238 (Deluca D-11th Dist). This bill establishes a formula for calculating payment schedules that add clarity and equity to the process.

Land Use In order to allow counties a more reasonable timeframe to establish their comprehensive plans, SB 138 (Venables D- 21st Dist.) was passed and signed to bump the maximum time between updates from five year to 10 years. This legislation does not prohibit counties from doing more frequent updates if they wish.

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The end of the session saw some familiar faces leave Legislative Hall for the final time as elected officials. Rep. Gilligan retired after 40 years of service, the last four as Speaker of the House.

Senate President Pro Tempore Tony DeLuca will not return after 14 years, eight in leadership. Others leaving after years of service include: Sen. Dori Connor, Sen. Liane Sorenson, Rep. Biff Lee, Rep. Nick Manolakos, Rep. Brad Bennett, Rep. Terri Schooley, and Rep. Dennis P. Williams. Sen. Michael Katz and Rep. Lincoln Willis will not return after serving one term each. We appreciate the time all of these General Assembly members dedicated to the citizens of Delaware.

TOTAL STATE SPENDING FY ‘12 Allocation Bond Bill

$429,271 million1

Grants-in-Aid

$41.2 million

Operating Budget

$3.9 Billion2

Transportation Trust Fund

$173,271 million

TOTAL

$ 4.4 Billion

(1.) Includes the Transportation Trust Fund, and (2.) federal passthrough funds

T OT AL S T AT E S P E NDING Trans portation Trus t F und 2% Twenty-F irs t C entury F und 0%

Operating B udget 92%

B ond B ill 5% G rants -in-Aid 1%

Final Thoughts Legislation is a product of a desire to make the state a better place for all of its citizens, and compromise between those who might have a different idea of what defines better. This past session was a successful one for the Delaware business community and the residents of the state. The upcoming session will present more opportunities and challenges as we face an economic growth pattern that is not as robust as was expected to be last spring. Q Januar y/Febr uar y 2013

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