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Happy Tax Day Delaware!

Today Delaware celebrated Tax Day on April 20, 2015 National Tax Day is April 24, so most of the rest of the country still has to work to make sure all levels of government have access to your money so they can “invest” it in whatever causes those charged with “managing” our money have decided to use it for.

If you’re unfamiliar with Tax Freedom Day, it’s a day set by the Tax Foundation to mark when wage-earning Americans have made enough money to pay their total tax bill for the year. For some lucky Americans, their tax day comes in early April. For others, like in our neighbor states Maryland and New Jersey, tax freedom day doesn’t come until May. Last year Tax Freedom day was April 21, and we aren’t even counting our federal borrowing obligation. That is basically another tax but it’s a “future tax” so it doesn’t get counted for the purposes of our day.

Delaware’s top rate was “cut” in 2013 from 6.75% to 6.6%, despite being 5.95% as recently as 2009, applying to incomes of just $60,000 per household. You pay 5.55% of your wages to the state if you make as little as $25,000. In comparison, Connecticut which is tied for the latest Tax Freedom Day, takes 6% of pay starting at $100,000 for single earners or $200,000 for couples filing together. Even New Jersey doesn’t grab taxes as high an amount for as low an income as Delaware.

This year Americans will spend more money on taxes than on Housing, clothing, and food, according to the Foundation. Some of this is due to the modestly improving national economy, which means more money is being earned, spent, and thus taxed, bringing in record amounts of money into the federal treasury, who incredibly still manages to run budget deficits.

Meanwhile, our politicians in Dover have finally realized that there really is a tax collection problem in this state: while our overall business climate is still good (the Tax Foundation ranks us at #14 for best places for business and many corporations still choose to incorporate in Delaware), personal and corporate income tax dollar collection has decreased for the second straight year, meaning there are going to have to be tough decisions made when it comes to voting on this year’s budget. Our three casinos continue to struggle due to increased out-of-state competition, yet the state continues to tax slot machine revenue at 43%. Incredibly, some in Dover think the solution is to add more casinos to the state, in the short-sighted hopes of grabbing immediate licensing fees. Never mind that if the casinos stop providing revenue, then the state will have to make serious budget cuts and there is not the stomach in Dover to do that right now.

Delaware has been a low-cost place to retire to, and we have seen a massive influx of retirees move to the state, particularly to Sussex County. These retirees require services but are not paying income taxes to the state, our number one source of revenue collection. And we haven’t even addressed the upcoming challenge of paying for the Medicaid expansion which came with ACA. Let’s hope eventually our elected officials accept reality, preferably sooner rather than later, and make the right moves to keep Delaware free and open for business.

Medicare Cuts Benefits

As of April 1, 2015, CMS stopped payments to doctors for Medicare beneficiaries. As of April 13, CMS announced that it would begin processing claims, as required by law, but at an average 21% reduction across the board. The net effect for many physicians offices is that certain services, such as injections and medications are now being reimbursed by CMS less than the wholesale cost to the providers. Quite obviously, those treatments are no longer going to be offered to Medicare patients.

This is the long predicted adverse and unintended consequence of a poorly designed law known as SGR, past almost 2 decades ago but only now being implemented as of April 1. While the Congress has past by part ascending supported legislation to fix the problem, the United States Senate went on an extended Easter vacation for 2 weeks in yet another shocking demonstration of dysfunctional government.

The rationing of of healthcare to the Medicare population has begun in earnest.

-Dr. Casscells, Director

Center for Healthcare Policy

From Reuters, April 15:

“Congress on Tuesday approved a bill to repair the formula for reimbursing Medicare physicians, marking a rare bipartisan achievement just in time to head off a 21 percent cut in the doctors’ pay.

The bill would replace a 1990s formula that linked Medicare doctor pay to economic growth, with a new formula more focused on quality of care. It also would require means-testing of Medicare beneficiaries so higher income people pay higher premiums.

One of the government’s largest social safety net programs, Medicare is health insurance that serves 54 million elderly and disabled people.

The old formula for paying Medicare doctors has been a problem for years as health care costs outpaced economic growth. Congress had repeatedly addressed the problem with a long series of temporary “doc fix” patches. The new formula is intended to be a lasting change.

The federal government warned Congress last week that it must act before April 15 or thousands of Medicare doctors nationwide would face a 21 percent pay cut under the old reimbursement formula.

The measure passed the House overwhelmingly in March but because it expands the federal deficit, it was greeted skeptically by deficit hawks in the Senate.

They labeled the bill irresponsible because it would add an estimated $141 billion to the U.S. debt over the next 10 years, according to the Congressional Budget Office (CBO).”

What does this mean for healthcare, particularly for the elderly? For the longest time, Congress has been forced to pass the annual “doc fix” because they decided the way to “cut spending” on Medicare was not to means-test the program, ensure that only qualified persons were using the program, and ensure that actual spending was kept under control, they decided to cut the reimbursement to healthcare providers.

Medicare and Medicaid pay far below what a provider can get from a health insurance company or from a fee-based service. This is why patients who use these services consistently have trouble getting great care.

Consider this hypothetical scenario: a general practitioner owns a small clinic. He generally expects to earn $100 an hour for his own salary and for his business. A Medicare or Medicaid patient walks in and he realizes that to spend an hour on this patient will net him only $25 per patient. He has, for argument’s sake, one hour right now. Given the low reimbursement, instead of charging two patients $50 each for a half hour each, he needs to see four patients an hour at $25 in order to earn his income. The doctor must now  choose: give less time to the Medicare patients, or accept a lower fee per hour.

There are those who will say the doctor is “greedy” if he doesn’t accept the fee cut, and point to the Hippocratic Oath and the part which says, “I will remember that I remain a member of society, with special obligations to all my fellow human beings, those sound of mind and body as well as the infirm.” This will be used to say they should consider it a privilege to help their fellow human being, even if the doctor derives no benefit from doing so.

Let’s remember that doctors are people too; they have families, bills, expenses, debt, and other obligations like everyone else. Pretty much every doctor would agree that treating patients without regard to difference or ability to pay is fundamental, which is why many doctors perform charity care for the poor. However, this attitude that doctor should be lucky to treat people is arrogant, and usually put forth by non-providers who think they are entitled to things.

Thus, the problem with the fix is that every single year this charade happens: Congress ‘patches up’ the gap, to stave off already-harsh cuts to reimbursements for providers, who can make more money if they don’t treat Medicare and Medicaid patients, and have the benefit of not having the wrath of government on them if they err in filing paperwork (they feel the hassle of dealing with the insurance companies, but at least the insurance companies can’t give out fines or prison sentences for paperwork filing violations or ‘over-billing’ scenarios).

CRI, together with the Medical Society of Delaware, are the only Delaware organizations advocating for physician and patient driven health care, in opposition to socialized medicine. We want to see the power of healthcare decisions shift towards  the patients and their immediate providers, as well as the immediate costs. Doing this will mean a big step forward in getting healthcare costs under control and improve quality by encouraging innovations and cost-lowering for providers to offer patients. We see this in other sectors of our economy, so why not healthcare?

rightwisconsin.com

Today’s News Journal article “Seeking Delaware manufacturing jobs, GOP targets unions” talks about the concept of a “right to work zone”, which differs from Right to Work in that RTW laws covers whole state while a RTW zone covers only a specific geographic area. Senator Greg Lavelle has proposed one this year; he did the same last year.

As expected, the unions were out in full force against it:

“Sam Lathem, president of the Delaware AFL-CIO, the umbrella organization representing Delaware unions, called Lavelle’s legislation a “desperate reach” that would lead to lower wages.

“We need to find a way to re-create and grow the middle class. Right-to-work isn’t going to do that,” Lathem said.”

The News Journal article pointed out the problem, though whether John Starkey intended to do so is another idea.

“Now Republicans are reviving a proposal they hope will revitalize Delaware manufacturing. But the plan, which would make it harder for unions to organize, is controversial and deeply polarizing in a state where the governor’s office and the General Assembly are controlled by Democrats, who still count union members among their staunchest base supporters.

Markell, a Democrat, appears poised to oppose the legislation. A spokeswoman said available studies on whether right-to-work legislation creates jobs are “inconclusive at best.”

“Gov. Markell remains focused on efforts that employers tell him are most important for job and economic growth, such as providing training for a skilled workforce and spurring innovation,” spokeswoman Kelly Bachman said.”

To quote from Hamlet, “Ay, there’s the rub.” You can see very quickly why even just a zone- not the whole state, but an area to try this idea out- is considered a threat to organized labor and those who benefit from it.

Here’s the summary of the Law, SB 54:

“This Act allows the Director of the Delaware Economic Development Office to create right-to-work zones as part of its inducements to bring new businesses to Delaware and requires these zones to be offered for manufacturing businesses hiring at least 20 employees. It also exempts those manufacturing businesses from their gross receipts taxes for their first 5 years.”

Let’s talk about these zones. Suppose GM’s former plant on Boxwood road was turned into a right to work zone, along with say 1000 square acres surrounding the plant’s legal boundaries. Only businesses locating in these zones would be able to receive the benefit, and with only 1000 square acres there would be a limit. However, those businesses which do receive a space in the RTW zone would be able to avoid the problems which modern day labor unions bring: namely, the political activity (including which many union members may not agree with) and the pressure to give workers more money and benefits even if the company is unprofitable or if doing so makes the company unprofitable. They can make an effort to grow manufacturing and if the effort succeeds, then more zones can be replicated, or perhaps if the General Assembly and Governor see the benefit of one, they can enact a RTW law for the entire state.

On the chance the law is not beneficial, or even proves detrimental, the zone can be removed and the rest of the state is unaffected or the law can be repealed if the zones are a failure.

Now, other factors will affect the success or failure of these zones. Notice that the gross receipts tax would not apply for five years. This is because our state’s gross receipts tax is a job-killer; businesses who meet a certain income threshold pay a tax on all revenue over the threshold, not counting profit and loss. So even if your business has a bad year, you still get socked with higher taxes.

Electricity is expensive in this state, about 23% higher than the national average. Plus, the crime reputation for Wilmington, and to a lesser extent Dover, absolutely gives a negative vibe to outsiders looking to relocate a business or build a new factory. Don’t let anyone tell you Wilmington’s crime problem isn’t hurting the reputation of the entire state.

But RTW zones might give the state a chance to attract capitalists without having to “invest” (subsidize) large businesses to move here, because most of the biggest “investments” go to major companies like Fisker, Bloom, Kraft, etc.. If you owned a casual sit-down restaurant, and the only way you could get customers is to pay them anywhere from $30-50 to get them into the store, who is going to look at customers coming in and say “yes, this is a successful restaurant” just because a few customers are inside your restaurant now?

We hope the state will look at ways to improve our economic climate, to attract businesses and “job creators” of all types, from start-ups to established companies, from sole proprietorships to multinational corporations, to anyone who has job opportunities for Delawareans and is willing to invest in our state for the long-term. These goals are achievable, they work, and they offer a new chance to get our economy going again.

By the way, the courts have found right to work zones are legal. What is not currently legal (and is being challenged) is right to work at the County/City level. This is due to how local government entities are structured.

Lastly, if you need more proof that manufacturing in Delaware is in serious trouble:

Delaware manufacturing employment

1990: 43,200

1991: 48,600

1992: 44,800

1993: 44,100

1994: 44,200

1995: 44,300

1996: 39,700

1997: 41,5002

1998: 43,100

1999: 44,400

2000: 41,300

2001: 39,000

2002: 38,300

2003: 35,000

2004: 34,900

2005: 33,500

2006: 35,000

2007: 33,700

2008: 32,300

2009: 29,900

2010: 26,800

2011: 25,600

2012: 25,600

2013: 25,600

2014: 25,600

2015: 25,800

Source: U.S. Department of Labor, Bureau of Labor Statistics

Yes, we have lost roughly 40% of our manufacturing jobs, and most of these workers are NOT in a private sector labor union, which has even lower numbers. Given the situation, what can and should unions do to keep their members supporting their unions? How could union leaders improve their offering which helps both workers and employers?

In our next blogpost, we’re going to introduce a new concept called “Union Economies”. This idea is pretty interesting, and it comes from our friends at the Mackinac Center.

Just last week Sussex County officials made it clear they intend to rewrite local ordinances on how and where food vendors may operate in commercial zones. Basically, Sussex wants to make it easier for food vendors to file their paperwork and operate in the county.

From the Cape Gazette:

“Under the current county ordinance, it can take 10 months or more to acquire the proper approvals. Sussex County Administrator Todd Lawson said the process could be cut to a few days, and the cost dramatically reduced.”

Food vendor trucks face opposition from brick-and-mortar stores, who generally dislike the idea of food trucks moving around. A lot of this is regulation; restaurants are heavily regulated operations and the assumption is that food truck vendors are like “fly by night” salespeople who just show up and sell food without going through the same red tape and regulations as the stores. They, and folks who have a general mistrust of businesses perceived to be unregulated, frequently put pressure on local and county municipalities to make the cost of entry very high for food truck vendors. The result is protectionalism for brick-and-mortar stores and a loss of job opportunities for folks whose business might be a hot dog or vegetable stand by the beaches or off Route 1 during the summer tourist season.

A reasonable amount of regulation is necessary to make sure all businesses are playing by the rules. For example, checking to make sure a business is legally registered and has not been found to be using unsanitary conditions to produce or sell food is reasonable. However, we have more faith in the marketplace than in government administrators to determine the safety of a food product and a lot of government oversight is frankly unnecessary. The food vendor businesses should not be barred from entry, and we’re pleased to see Sussex County is making steps to ensure a uniform and simplified registration code for food truck and produce stand businesses to be able to sell their products.

photo: delawaretoday.com

Are you interested in learning more about our sixteenth president? The public is invited to a free presentation of “Young Mister Lincoln,” a fictionalized movie biography of our 16th President, which will be screened at the Dover Public Library on Wednesday, April 8th at 5:30. Larry Koch will host the program. Larry is a Lincoln expert, who will give you the most incredible stories about Abe, down to the types of jokes he thought were funny and when he thought they were appropriate. Don’t miss this event!

July was a typically warm month in New Salem Illinois in 1831. If you were people-watching on your porch you would not have found the tall, gawky, flat-footed farm boy particularly unique. Abraham Lincoln was 22 year old, and owned little more than the ill-fitting homemade buckskin clothes on his back. His pants barely reached his shins, and when he stretched or bent over his long underwear peeked out from the bottom of his raggedy trousers. Such outlandish, rustic attire was hardly worth a second glance in a western frontier community.

According to Lincoln “I was a friendless, uneducated, penniless boy… a piece of floating driftwood.” Needless to say, no matter how bizarre Lincoln might have appeared to a perhaps more discerning observer, the quotation that “you can’t tell a book by its cover” was never more apt. Within a few years Lincoln was a prominent and noteworthy young politician. In the future, of course, he would be elected president, confront the most deadly challenge to the Republic since its’ founding, built the greatest army in the world, defeat the formidable forces of disunion and end slavery in America. Interestingly, even on that first day in New Salem, Abraham Lincoln, perhaps inadvertently, advanced personal liberty and helped legitimize an increasingly trend-setting pattern in American society.

Social mobility in pre-bellum America was severely limited by tradition and circumstance. People in general followed in the occupations of their family and ancestors. The overwhelming occupation of Americans at that time was made up of subsistence farmers, and in the great majority of cases their children similarly followed in their parents’ footsteps. People generally lived and died within ten miles from where they were born. Special circumstances and survival issues (apprenticeship opportunities or loss of land fertility, for example) of course were exceptions to these accepted patterns, which otherwise continued for  generations.

Lincoln rejected the expected option to be a farmer, like his father, for startlingly different reasons. He would often say his father taught him farm work, but not how to like it. He enjoyed poetry, theater, and reading history, and simply did not find fulfillment in the hard physical, demanding work of the agrarian lifestyle. His desire to do something else was based on personal preference and ambition rather than any particular disaster or specific marketable skills.

The Lincoln who arrived in New Salem had no money, no contacts, and no idea initially about what he wanted to do. A nineteenth century observer would hardly find that Lincoln had left the world he knew to simply survive, and the Town of New Salem, population 100, hardly offered any special opportunities. It was enough, however, for Lincoln. The 22 year old and future president did have ambition, a pleasant personality, a willingness to learn and work hard, and eventually rose in New Salem society to become a surveyor, a postmaster, a storekeeper and eventually a lawyer and party leader.

Today it is not unusual to find people who choose an occupation and lifestyle based in large measure on what they enjoy doing, not what was the traditional occupation of their family, class or region. In fact it is the basic American promise that here one can exceed one’s parents’ station through commitment, hard work and learning. Generations have been assured that they can grow up to be anyone they want to be, even the president of the United States, as long as they apply themselves. The man who more than anyone else established that national ideal was the farm boy who moved to the town of New Salem in July of 1831.

Interested in this pivotal American story? The public is invited to a free presentation of “Young Mister Lincoln,” a fictionalized movie biography of our 16th President, which will be screened at the Dover Public Library on Wednesday, April 8th at 5:30. The director is the legendary John Ford, and, in perhaps his best performance, Henry Fonda stars as Abraham Lincoln. Lincoln defends in court two brothers accused of murder. As a movie prequel to the great events that would follow, you will gain insight into the life events that shaped a future president. A brochure will be shared with the audience that will identify historical accuracies and errors, movie goofs, and other information about “Young Mr. Lincoln.” I will be hosting this program, and I look forward to seeing you, and telling you about other Dover Library offerings celebrating the 150th anniversary of the end of the American Civil War.

Larry Koch, EdD

Rational thought underlies conservative Christian views on climate change and the environment
by Dr. David R. Legates
Although he has rarely been willing to discuss or debate energy or environmental issues with those who do not share his views, environmentalist David Suzuki frequently challenges them on other grounds. In his recent article, “Religious Right is wrong about climate change,” Suzuki claims that some US and Canadian scientists hold religious views that are “anti-science”.
Suzuki asserts that some climate scientists – including me, by name – put “misguided beliefs above rational thought.” His implicit assumption is that conservative Christian views are irrational and incompatible with science, and that I have replaced Almighty God with the “almighty dollar,” believing the economy matters more than the environment.
As a co-author of the Cornwall Alliance’s Renewed Call to Truth, Prudence, and Protection of the Poor: An Evangelical Examination of the Theology, Science and Economics of Global Warming, which forms the basis for the Evangelical Declaration on Global Warming that Suzuki criticizes, I know the Cornwall Alliance fully and carefully integrates scientific, economic, ethical and theological reasoning to support its conclusions. There’s nothing at all irrational about it – unless you consider religion irrational per se.
However, Suzuki is correct regarding one aspect of my belief: the economy does matter as much as the environment. Good environmental stewardship requires sound financial footing – and improving and safeguarding human health and welfare requires maintaining a strong, vibrant, innovative economy that can sustain continued environmental progress.
When a country is in dire need of food, clothing, shelter and other necessities for life, it cannot possibly be concerned with environmental issues. The poor people of India pour untreated sewage into the Ganges River – and then draw their drinking and “cleaning” water from it. So poor that they’re desperate simply for survival, they cannot possibly concern themselves with environmental stewardship. Only when economic improvements allow technological advancements to increase the quality of life, provide ample food and clothing, house citizens, provide clean drinking water, and treat and eradicate diseases can a thus wealthier society turn its attention to caring for the environment.
That is precisely what has happened in more developed nations. As the United States and Canada advanced economically, we developed technologies and policies that increased our quality and length of life. In turn, this has led us to be more proactive with our environmental stewardship.
We emit far less pollution and waste today, both per person and per unit of production, than we did fifty years ago. We feed more people with every parcel of land, we get more energy from every drop of oil, we are more efficient at everything we do, and we are much better stewards of our environment. But none of that could have occurred without a strong and developing economy.
Unfortunately, some so-called environmentalists wish to keep Africa and other developing nations in perpetual underdevelopment. They pay them off to be “environmentally conscious,” by giving them handouts – food and monetary aid – to keep them alive and perhaps have little solar panels on their huts. But they also ensure that those poor families never prosper or become middle class – so as to perpetuate environmentalist notions of “noble natives,” supposedly “at one” with their environment and living a “sustainable” existence.
Equally harmful, much of that money is lost to corruption, while the people are forced to continue living in a state of poverty, disease, malnutrition and deprivation, as technologies that could enhance their length and quality of life are denied to them. Among the technologies denied are modern seeds, fertilizers, and high-tech, high-yield farming methods to increase food supplies; natural gas and electricity to heat homes and cook food, instead of cutting down forests and burning wood, thereby degrading indoor air quality and causing lethal lung infections; refrigeration so that people do not have to choose between eating spoiled food and going hungry; and the use of insecticides, including the powerful insect repellant DDT, to spare them from the agonizing illness and death brought on by malaria.
Each of these enhancements requires plentiful, dependable, affordable energy. Yet in the name of “saving the planet” or “preventing cataclysmic climate change,” environmentalists like Suzuki deny developing countries the modern technologies and energy they need to improve their lives and environment – thereby perpetuating high infant mortality, significantly shortened life spans, and greatly decreased quality of life.
Climate alarmism is the rationale for these deadly policies – and that is where political ideology mixes with the new religion of environmentalism. Overstated or non-existent threats to the environment, along with impractical or imaginary ways to prevent the purported threats, are the new scripture on which the adherents develop their theologies and policies for directing and micromanaging the course of human events. Unfortunately, these eco-religionists never encounter (or intentionally avert their eyes from) the misery and devastation that their policies dramatically inflict on the world’s poorest people. That is because they are too concerned with “saving the planet.”
Back in North America, some wish to have energy rationed or be made increasingly expensive, creating artificial fuel poverty for millions. Such policies will make food, clothing, shelter, transportation, and medical care – in short, everything – more expensive and scarce, create more unemployed workers, push many people back into conditions of poverty and deprivation, and gravely impair human health and welfare. This strategy will not save the planet, as they hope, because one of its first casualties will be environmental stewardship. History and human nature both testify that, forced by economic limits to choose between a cleaner environment and food on the table, people always choose food.
In the Parable of the Talents, Jesus told of a master who gave one of his servants a single talent, and then condemned him for hiding it in the earth and not putting it to use. Often we think of the talent only as money or ability, but it really stands for every resource – including natural resources. How will the Master of all creation judge us if we hide our resources in the earth, and then on Judgment Day say, “Behold, you have what is yours”?
If we do not use the resources God has set before us in the earth to care for those in need, our Creator will likely condemn us, saying: “You kept buried what I gave you, instead of using and investing it. You failed to employ my gifts to care for the poor, the hungry, the sick, and those who were dying from disease. You have been worthless, irresponsible stewards of my creation.” We would deserve the same fate as the servant the master called “wicked and lazy.”
I fail to understand how anyone thinking rationally can argue that poverty and economic hardship will enhance environmental stewardship, or that the planet is more important than the people who live on it.
_________
David R. Legates is a Professor of Climatology at the University of Delaware in Newark, Delaware, USA. He is a Christian and a senior fellow of the Cornwall Alliance for the Stewardship of Creation. He is a member of CRI’s Advisory Council.

Today’s News Journal featured a Delaware Voice piece from Reps. Michael Mulrooney and Edward Osiensky explaining why they favor Delaware’s prevailing wage law and oppose right to work legislation. Economic Policy & Analysis Director Omar Borla will provide more detail about the economic impact of having a prevailing wage law and not having right to work, but here are our main arguments against this article (bold emphasis ours):

1. “Republicans stated in a letter to the governor and accompanying press release that they believe that right-to-work laws and “meaningful changes” to our prevailing wage laws would help grow our economy. They tell us the prevailing wage drives up the cost of state construction projects and point to outlier figures to stoke the flames.”

CRI: Prevailing wage means the government tells contractors what they have to pay their workers in order to get a government contract for construction, repair, or general maintenance. Have you seen our prevailing wage? $69.27/hour to be a cement finisher in NCC? $71.17 to be a pile driver? The average American household earns between $25-26 an hour (assuming a 40 hour workweek). Surely these working men and women could take just a small cut, save taxpayers some money, and still earn a decent living?

2. “Prevailing wage laws set pay rates and benefits for workers on state-funded projects. The prevailing wage rate is determined by surveys sent to contractors in all trades, such as carpenters, plumbers and electricians, to collect information on wages and benefits being paid in each county to tradesman working on all types of construction projects, private and public. This establishes the true, current construction market rates for the area.”

CRI:  Partially true, but not the full story. Delaware’s prevailing wage survey oversamples union-friendly contractors.This results in a higher prevailing wage than ought to be the norm.

3. “Opponents take a simplistic view that equates higher wages with higher overall costs. Wages and benefits are only about one-third of overall construction costs – and that percentage has been falling. Prevailing wage requirements help ensure that competition among contractors in the bidding process is focused on areas of overall cost efficiency, high productivity, and innovative methods. The most qualified and responsible contractors will find other cost-saving measures before cutting wages and benefits, which is exactly what the state wants from its public contractors – efficiency and productivity that doesn’t come at the expense of hardworking Delawareans.”

CRI: We have a gross receipts tax, a corporate income tax, personal income tax, high electric rates, and the heavy hand of regulation from the government. Let’s start by ending the gross receipts tax on all revenue generated, and making our other taxes and expenses more competitive with the other leading states (such as Texas, Florida, Nevada, and Virginia) to remove unnecessary burdens from the private sector. Delaware’s prevailing wage requirements have little to do with ensuring workers get a fair wage for their services, and more to reward loyal union members with high wages if they continue to back the elected officials who support the prevailing wage. Of course, this assumes the workers are able to get work in the first place. Remember what happened with the Rockwood Museum? No work ended up being done and no workers got paid.

4. “While there is always room for improvement, fundamental changes or the elimination of the prevailing wage for state projects will not result in savings for the state; it will result in shrunken wages for taxpaying citizens. Contractors will simply pay workers less and increase their profit margins.”

CRI: More likely, there will be more work for workers because it won’t be so expensive to pay them. This is a basic principle of the free markets: the more something costs, the less it will be bought or used. The less it costs, the more it will be bought or used. For example, would you be more likely to buy a book at $5 or $30? Assume it was the same book and there were no differences between the two. Read our analysis here and here and here.Better yet, visit our website and search for all our articles on prevailing wage.

5. “Similarly, the Republicans’ other proposal, right to work, is another partisan talking point masquerading as a jobs plan. Its purpose is to serve the interests of big business by diminishing the rights of workers, not supporting them. “Several states have adopted “right-to-work” laws of some form over the years, which means we can compare prosperity in states where organized labor is free to represent workers and states where workers’ rights to organize are curtailed. A 2012 report from the Congressional Research Service, a nonpartisan agency of Congress, showed there is no conclusive evidence proving “right-to-work” laws spur job growth or reduce unemployment. “The CRS did find hard evidence that shows average wages are $7,000 lower per person in “right-to-work” states than in states that respect the role of unions. That is a huge hit for families when every dollar counts. That is part of why Democrats often line up against such “right-to-work” proposals.”

CRI: Most Delawareans support Right to Work. Contrary to misinformation, right to work doesn’t ban unions; it simply says one does not have to be a union member to get a job in an area where unions have representation. And as for the ‘scab’ argument, unions are under no obligation to represent non-union members unless they declare they are “exclusive bargaining representatives”, which requires all employees in that shop to accept union representation. So said the Supreme Court. As for Delaware’s economy, we have not regained the manufacturing jobs lost from the Great Recession. A lot of this is simple: If you were a business owner thinking of someplace to build a manufacturing plant, what makes Delaware more competitive than another state or country?

Our solution: If the prevailing wage law will not be repealed entirely, eliminate Delaware’s PW survey and just use the one the US Dept. of Labor uses. This is a more fair and accurate survey of market wages. This move will keep a PW law in Delaware AND save the taxpayers money.  

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