LETTER TO THE EDITOR: Restructuring Delaware’s financial relationships

Gov. Markell should be commended for recognizing the need for Delaware to restructure its financial relationships with the new companies being formed by the merger of the DuPont Company and Dow Chemical. As plans for the reorganization of the merging companies began to unfold, it became clear, first, that many Wilmington and northern New Castle County jobs were at stake and, second, the way Delaware would be taxing the new companies was not supportive of those jobs being kept here at home. Accordingly, in January the governor proposed and the General Assembly passed the “Delaware Competes Act.” This act restructured the corporate tax laws in order to protect the jobs at the first DuPont spin-off company. Now, the governor is proposing a second bill, which will be introduced this month that further restructures the corporate tax laws to protect the jobs at the new, reorganized companies. These bills both recognize and acknowledge that as circumstances change in the job creating sector of our society, the state’s financial relationship with that sector must change, too. I voted yes on the Delaware Competes Act and I intend to support the governor’s second bill because the jobs and the economic activity these companies provide are vital not only to Wilmington and northern New Castle County but to our entire state. That’s also why I, along with 12 other legislators, have introduced SB 183, a bill that restructures Delaware’s financial relationship with the casino industry. As out-of-state casino competition escalated over the past several years, it became clear, first, that many Kent County and northern Sussex County jobs were at stake and, second, the share of gross gaming revenue the state takes from the casinos was not supportive of the thousands of jobs the casinos provide here in central Delaware. To be sure, there are New Castle County jobs at stake, too. There was a time when the state did not take as large a share of the casinos’ gross gaming revenue. When Delaware casinos were first initiated, we took about 23 percent of their revenue. Over the years, we kept increasing the state’s share. Six times we raised it. Finally, in 2009 we jacked it up a seventh time to 43.5 percent right at the same time out-of-state casino competition was burgeoning. Note that we are not talking about a share of the casinos’ profits. The state itself takes more than 40 percent not of their profit but of the casinos’ gross gaming revenue. It further requires the casinos to give more than 10 percent of gross gaming revenue to the horse racing industry. Think of it as a huge gross receipts tax, with well more than half of gross revenue taken right off the top. No business in an intense competitive environment can sustain that for long. This situation has already caused a reduction in employment in the industry and a slowing of the necessary capital investment needed to keep our casinos competitive. It is exacerbating the challenges arising from the new competition. It is tying the hands of the casinos as they grapple with the reality of the new situation. It is putting the very survival of the industry in jeopardy. And that means thousands of jobs. I urge Gov. Markell and my colleagues in the General Assembly to recognize that the time has come to restructure the financial relationship between the state and the casino industry just as the other initiatives restructure those relationships with the former DuPont companies. Casino jobs are just as important to Kent and northern Sussex County as DuPont jobs are to Wilmington and northern New Castle County.

Sen. Brian Bushweller D-17th District (All or parts of Dover, Camden and Wyoming)

EDITOR’S NOTE: Sen. Bushweller is a member of the Joint Finance and Bond Bill committees.