The Delaware Contractors Association (DCA) hosted State Treasurer Jack Markell at its second Legislative Breakfast of 2005 on Wednesday, April 6.
Markell discussed the status of Delaware’s economy and budget as well as how the state is focusing on economic development in order to keep Delaware attractive for entrepreneurs.
“I know that the state’s economy and budget are incredibly important to all of you,” Markell said. “If business is good for you then it is most likely good for the state because you are out there on the front lines.”
He explained that the state’s economy is in great shape because elected officials have done an incredible job managing its money.
Delaware is a fiscal model for many other states, he said. The Delaware Economic Advisory Council meets six times a year to review all revenue categories line item by line item, allowing time for an early warning signal if revenues begin to drop. Another reason that Delaware has proven prosperous, Markell said, is due in part to its revenue streams.
He explained that the state’s base operating budget is approximately $2.8 billion — more than $500 million of which is generated by the franchise tax. Another $220 million of the operating budget is generated by video lottery and $300 million last year was raised from the abandoned property account.
“While all of this sounds good, it’s tough to quantify what your vulnerabilities are,” he said. “But we do know that the abandoned property money is not a constant revenue — it’s simply one-time cash that funds our budget.
“Plus, we know that other states are trying to tap into our revenue streams — particularly with the lottery. If you were an investor, our quality of earnings and our predictability is not what you’d want it to be. We don’t have a lot to count on long term,” he said.
Markell argued that one of the state’s focuses for economic development should be to attract entrepreneurs.
Markell added that in order to make Delaware more attractive to entrepreneurs, the state needs to work with higher education facilities on the commercialization of technologies. He also suggested that the state focus on the shortage of venture capital.
DCA is located in Wilmington, DE, and is a trade association made up of heavy, highway, commercial, industrial and utility contractors and suppliers of related products and services.