Attracting new businesses to Delaware and promoting job growth are certain to be major topics in this fall’s statewide elections and the race for the District 18 state senate seat will be no different.
The winner of that seat will be determined in the Sept. 11 Republican primary when incumbent F. Gary Simpson will face off against challenger Matthew Opaliski. No Democrat filed in the contest, meaning the winner of the primary will be unopposed in the Nov. 6 general election.
In separate interviews this week, each candidate said he believes the General Assembly can do more to promote economic development throughout the state by cutting taxes and reducing red tape, although they varied in their approach.
Simpson, for instance, said he believes the state needs to continue reducing the gross receipts tax, while Opaliski pointed to the estate tax as a potential obstacle to encouraging new businesses to locate in Delaware.
“I support any effort to reduce the gross receipts tax and co-sponsored legislation this year to do just that,” Simpson said, referring to a bill approved this year that cut the variable gross receipts tax by 3 percent across the board. Currently, the tax, which is levied on the total gross revenue of businesses, ranges from 0.1 to 0.75 percent, depending on the type of business activity.
“There are also a lot of other taxes that were approved eight years ago when Delaware was in the red that are slated to sunset next year,” Simpson said. “I will do my very best to make sure that they are sunsetted so we go back to our old rates.”
Opaliski, meanwhile, said businesses that are looking to relocate might be opting for somewhere other than Delaware because the First State reinstituted an estate tax in 2009.
Now, estates valued at more than $5 million may be subject to the tax, which also is commonly referred to as the “death tax.”
“Suppose there is a large business that is looking to come here and they have a CEO with a large estate,” Opaliski said. “They are not going to want to pay that tax. So they are going to look for a state without it or a lower rate than Delaware. And who do we have to thank for that? Gary Simpson, for one, because he voted for it.”
Both Republicans also pointed to electric rates and various state regulations as impediments to new and existing businesses in Delaware, although they differed in their opinions on whether progress is being made on those fronts.
“Obviously, electric rates have been in the news lately and I helped to push for municipalities in the state to reduce their electric rates, which will help businesses from leaving,” Simpson said. “Milford probably got that message before any of the other towns and acted to reduce its electric rates for businesses and I’m certainly happy that they did that.”
Opaliski said electric rates throughout the state would be even lower if the General Assembly had not required electricity suppliers in Delaware to provide a growing percentage of their power from renewable energy sources.
“The Delaware Electric Cooperative, for instance, just bought 30 acres for a solar farm to meet the RPS requirements, but that electricity costs 21 to 23 cents per hour, which is three times the cost of coal-generated electricity,” he said. “If not for the law that says they have to have it, there is no way the co-op would have invested in a deal that is not cost productive. And those added costs get passed on to the consumer.”
Concerning other state regulations, Simpson said that while some are necessary to ensure public health and safety standards, he sees others as counter-productive to economic development.
“I would like to see the state improve its permitting process at DelDOT, which can be extremely slow,” he said. “I’ve seen DelDOT’s permitting process directly cost us new business and it frustrates me to no end. It is unbelievable to me that when we are trying to attract businesses and keep employers in business that we have a government agency that is making that more difficult.”
Opaliski pointed to Delaware’s participation in the Regional Greenhouse Gas Initiative’s carbon dioxide cap-and-trade program as a regulation negatively impacting business. The bill that authorized Delaware’s participation in the program allows the Department of Natural Resources to auction carbon dioxide allowances starting this year.
“The greenhouse gas initiative, for instance, is basically Delaware’s version of the cap-and-trade program that was shot down by Congress,” Opaliski said. “Sen. Simpson co-sponsored it and I would like to see that it gets repealed.”
Simpson also pointed to public education and quality of life issues as important factors in promoting economic development.
“Providing a solid education to our residents is one of the most important things we can do because a well-prepared workforce is one of the main things companies look for when considering where to locate,” he said. “I’ve also worked with others in the legislature to bring state dollars to Milford, including $35 million in funding for school construction projects. I think the state also has been cooperative in helping to promote the Riverwalk section of Milford and helped to promote Milford’s beautiful downtown.”
Opaliski, meanwhile, said he believes the district needs a more outspoken senator willing to take a stand against issues harmful to business, rather than someone willing to ‘go along to get along.’
“There are not a lot of strong Republicans in the Legislature willing to speak up and say we need to look at some of these issues,” he said. “That’s why I’m running for office.”