Delaware officials’ contend their push to attract international business and investment is critical to creating needed jobs in the First State, but there are those who are uncertain how effective it will be.
University of Delaware associate professor of economics Eleanor Craig is one of them. DFM News asked Craig, economic adviser to former Delaware governor Pete duPont’s 1988 presidential campaign, for her thoughts on the state’s efforts via email.
How much competition does Delaware face in courting this these types of businesses and investment. Are other states making it a priority like Delaware?
For Delaware to be competitive in attracting AND keeping business, the State has to provide economic opportunities for new and old business. These do not include chasing individual factories or establishments all over the world. They do include making Delaware a profitable place to do business: low taxes, grossly reduced State spending including privatization of many government services, providing an exceptional educational experience for our young people through more competition in schools (education vouchers), reducing the power of unions in education and government services in general – realistically funding and reducing the obligations for future funding of pensions and health care liabilities, getting rid of prevailing wages and allowing right to work laws, and deregulating energy which has increased the costs of having a business or household in our State.
What advantages does Delaware have in competing in this arena? The Governor often stresses the state’s responsiveness. How attractive is that?
State responsiveness is important, but without a serious effort towards drastically changing our uncompetitive features, our responsiveness sounds very hollow.
What competitive disadvantages does Delaware face in this arena?
Extremely high personal income tax rates which are effective at $60,000 of adjusted gross income, high corporate taxes, hidden sales taxes in the form of the Gross Receipts Tax, the 5th highest State spending on a per capita basis, the overwhelming control by the unions on State government and education, prevailing wages, not being a “right to work” state, not being willing to privatize many State services, extremely costly energy for businesses and households, and heavy indebtedness from capital spending.
Are there realistic expectations for what Delaware can accomplish?
Yes, with courage from the leadership in turning the State around to a low tax, low spending and one that encourages existing business rather than one chasing a possible external investor.
