Archive for the ‘Spending’ Category

DOVER, DE – Cause of Action, a Washington D.C.-based legal advocacy group, has filed suit today in US Federal Court, District of Delaware, against Governor Jack Markell and five members of the Delaware Public Service Commission.

The Caesar Rodney Institute (CRI), a Delaware-based non-partisan think tank, has challenged the merits of utilizing high-cost Solid Oxide Fuel Cells to produce electrical power for sale to ratepayers of Delmarva Power, Delaware’s largest energy utility provider.  CRI was the sole entity opposing the contract between Delmarva Power and Bloom Energy at the Delaware Public Service rate hearings in October of 2011, on the basis the economic impact on Delaware’s economy would be negative because of the contract.  CRI has been concerned about the constitutionality of the contract from the very beginning.

Since CRI and John Nichols, a citizen activist, were not able to convince the Public Service Commission to change its views on either the economic or environmental impact of the permit application, Mr. Nichols decided to take his case to the Coastal Zone Industrial Control Board.  He challenged the permit application on whether Bloom Energy had the right to build its Solid Oxide Fuel Cell technology in lands that were considered protected for wildlife. CRI funded expert testimony as part of Mr. Nichols’ motion to appear the permit decision.

The Board voted to deny Mr. Nichols standing at the hearing, which allowed Bloom Energy to proceed with installation of its Solid Oxide Fuel Cell units in the Coastal Zone.  Mr. Nichols opted to file a lawsuit against Governor Markell and five members of the Public Service Commission, using information CRI provided during testimony.  He was joined by Fuel Cell Energy, Inc., a company which makes fuel cells, and which feels it was denied the opportunity to do business in Delaware because of the government’s decision to not open the bidding process to outside companies.

Caesar Rodney Institute 

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Wednesday the House Education Committee tabled HB 380.  The purpose of this bill is to revise the Delaware Charter School law by among other things requiring charter school applications be submitted to local school boards for review and consideration, require a face-to-face meeting with the charter school applicant to review and discuss the application, requiring statements about the impact on school district enrollment and financial programs, and eliminating five mile draw boundary.

The objectives of HB 380 seem reasonable until questions from House Members and testimony by the Charter Schools Network, CRI, Department of Education and other interested groups pointed out issues with the bill. Problems that include the application process, impact statements, administration of lotteries, the emphasis on the system taking focus away from the student, the logistical impact on families that would have made teacher and parent interaction difficult if not impossible for some, and the potential for influence  by unions and other special interest groups with specific agendas.


Rep Jaques’ intent was to start a conversation about Charter Schools and to promote a more civil discourse. He accomplished his purpose and after hearing all the discussion decided the bill should be tabled.

The focus now switches to Rep Schooley’s ‘blue ribbon’ committee on Charter Schools. She briefly outlined her plan at the end of the discussion on the Charter School Bill.

CRI is disappointed she continues to focus on one small part of the overall education system. A part that is less than 10% of the total K-12 enrollment, has some really stunning successes, and has a 58% minority enrollment. We agree they can be even better however they do not deserve the attention given them particularly when the larger problem of how poorly prepared students are for college or careers.

The focus must be on how to improve the education experience and results for all children in the total system including charter schools.

Over the past few years across the country there has been a revolution in innovation. Charter schools were created nearly twenty years ago to improve total student learning and to encourage different and innovated learning methods in exchange for being freed from some onerous regulations and influence; but charters are not enough.

Today innovation challenges the model of single or limited school choice. One model just doesn’t fit the diversity of student and family issues when there are available many different methods with private, religious, home schooling, virtual schooling – creative greenfield approaches that have the potential to overcome the lack of change over the past 50 years and overcome the ‘tuition barrier’ by opening up more funds for parents in all income levels to pay for the best education for their children.

Over next few months CRI will feature some of these through profiles, You Tube video and print articles.

And, CRI needs your support – make your concerns known to your elected representatives. The focus must be on renewing the total school system and expanding the opportunity for all to share the benefits of a great education system.


James E. Hosley

Director, Center for Education Excellence



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Captive.com, the leading source for news involving the captive insurance industry, is covering Insurance Commissioner Karen Weldin Stewart and her department. The links include stories by CRI and other sources.

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In a recent edition of the Wilmington News Journal (Tuesday, Feb 2 2010), we were reintroduced to the saga of the table top French Fry machine which claimed its fame last year when it received $50,000 from Delaware’s FY 2010 Bond Bill in a rather conspicuous fashion.

The back story on the machine’s inventor, Fry Manufacturing’s ties to State Senator Robert Venables has been well documented (Venables chairs the Bond Bill Committee and is related to the company’s co-owner, Mike Ruggiero by marriage).

So, what was the issue this time?  Well, it seems that Fry Manufacturing is upset with our very own DEDO (Delaware Economic Development Office) for not supporting their bid to take even more of our taxpayer’s dollars.  They are threatening to go out of state, and take their jobs with them.  Virginia, they say, is the next state they will peddle in an attempt to garner easy money.

Now, this is the part that needs to be examined: why does Fry Manufacturing believe that the state of Delaware ought to be in the capital investment game?  Is it the state’s place to place taxpayer dollars at risk in a venture capital fashion?  Isn’t that the role of the private sector, and why is Fry Manufacturing not seeking to capitalize in the same way as any other enterprise?  So many questions, with one simple answer; risk assessment.  It is much easier and requires much less risk to assume debt in the form of governmental economic development because no one will come lock the doors if you are late on a few payments as happens when dealing with a bank.  Additionally, to seek assistance from a private venture capital source, such as an Angel Fund, requires the forfeiture of a large portion of business ownership.  Neither of those avenues are as attractive as simply seeking to take more of our money in the form of low-interest government loans.

The government itself doesn’t deserve all of the blame. Many individuals share the credit for expecting the government to provide, provide, provide well beyond its constitutional scope.  In fact, it brings to mind the famous quote of President John F. Kennedy, “ask not what your country can do for you—ask what you can do for your country.”  Somewhere in all the recent talk of hope and change, the message of personal initiative and perspiration has been replaced by the idea of spreading the wealth.

It begs the bigger question of government’s role in the economy.  Should the State of Delaware be in the business picking winners and losers?  Should taxpayers be on the hook for a private company’s failure – whether that company is AIG, a bank, or an upstart French fry vending company?  Or, is government’s proper role to simply set a fiscal and tax policy that is conducive to an entrepreneurial society full of hardworking men and women who are indeed willing to take the necessary risks involved with starting or expanding a business and creating jobs.

There is one silver lining to this cloud, however. DEDO said no.  They chose to do the right thing, and kudos for it.  The government, of course, cannot and should not pick winners and losers. Who are they to know who will succeed and who will fail? And they most certainly should not be using taxpayer dollars to make investments such as the $50,000 included in the FY 2010 Bond Bill for Fry Manufacturing, LLC. 50k which will be lost is Ruggiero is successful in obtaining funds from Virginians.

There were no strings attached to the $50,000, and now, the company is looking to Virginia for more funding following the state of Delaware’s refusal to provide more money. According to Alan Levin, Director of the Delaware Economic Development Office, the decision to not award more money was made back in October.

Typically, funds such as those received by Fry Manufacturing, LLC would be approved through the Council on Development Finance which would have the ability to build in requirements for the recipient to produce a certain number of jobs or meet various other metrics. However, because this money was dispersed through the Bond Bill, no such stipulations were built in.

The way this situation unfolded serves as reinforcement for increased transparency in government – specifically as it pertains to spending decisions. Fortunately, the budget committees are now supposedly open for any and all to see – a move which should limit similar situations in the future.

As Secretary Levin points out in The News Journal coverage of this recent development, if the company was poised for success and had orders for the machine, then a bank would likely provide the loan. Given the state’s fiscal situation, the absence of private support and the nepotistic nature of the original funding, the state rightly decided to not invest more money in the company.

In the end, if the only way we can convince Fry Manufacturing, LLC to stay in Delaware is to keep feeding them taxpayer dollars, then there is only one word left to say.  Goodbye.

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CRI has posted the complaint filed by DNREC against the Corps of Engineers, which seeks to stop the dredging.

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A month ago, State Treasurer Velda Jones-Potter announced the success the Treasurer’s Office has had in shifting vendors from check payments from the state to ACH payments.  The release, posted on Jones-Potter’s blog highlighted that 76 percent of Grant-in-Aid recipients have converted to ACH (electronic) payments.

Through July, 20 of 312 vendors had signed up for ACH payments. Between July and October, 201 additional vendors had signed up for the program – bringing the total to 221 out of 312 Grant-in-Aid vendors.

Check payments cost the state approximately $50 per check. ACH payments cost only $1 per transaction, saving the state $49 per payment. This savings results in nearly $11,000 in savings  quarterly, or just over $40,000 annually.

According to the Treasurer’s office, they are now working on converting more vendors to the ACH program, which could result in additional savings.

To date 70% of the fire and ambulance services receiving Grants-in-Aid have converted. Further, the the state gets a percentage back on each dollar once ACH payments exceed $70 million.

The savings from this switch will not solve the state’s budget problem. However, the small savings can add up and are exactly the type of move that should occur.

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John Stossel gets it

Governments have a spending problem.

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