39.9 F
Delaware
Saturday, March 6, 2021

State Loans And Grants Are Immaterial

Must Read

State to ramp up vaccines for teachers, has given 253,535 doses of vaccine

253,535 doses of the COVID-19 vaccine had been administered as of Friday, the state said.

Schools hope summer programs, support will avoid students being held back

  Droves of students will not be held back because of interruptions caused by the COVID-19 pandemic, Delaware educators say. Instead,...

Do More 24 shatters record in first three hours, ends with 5 times last year’s total

The grand total for the 2021 event will be announced Saturday by 8 p.m.
Avatar
John Stapleford
John holds a Ph.D. in urban and regional economics (University of Delaware), M.A. in government and planning (Southern Illinois University) and B.S. in chemistry (Denison University). He is director of the Center for Economic Policy and Analysis for the Caesar Rodney Institute and a professor emeritus of economic development from Eastern University. He most recently worked as an associate director and senior economist with Moody’s Economy.com. John was Director of the Bureau of Economic Research at the University of Delaware and the co-founder of the Delaware Small Business Development Center. He is author of a book, numerous articles in professional journals, and over one hundred applied research monographs.

Under Governor Markell the Delaware Economic Development Strategic Fund has gone wild. Annual loans and grants from the Fund are up almost three fold. Why the flurry of activity? Will it pay off?

The reason for the flurry of activity is straightforward. Delaware currently has a 67,000 job gap to regain the ground that has been lost is the past four years. This includes: an additional 32,000 jobs to climb back to the peak level of total employment, 20,000 jobs to regain the historical unemployment rate, and 15,000 jobs to absorb the discouraged workers who have left the labor force. At the state’s current projected annual job growth rate of 0.7%, closing this 67,000 job gap will take 21 years.

Will the loans and grants pay off? It is immaterial. Over the past 10 years the Strategic Fund has put $200 million of loans, grants and equity into Delaware businesses. Over the same time period, the total investment by businesses in Delaware has been over $57 BILLION. While places like the Riverfront cannot survive without state loans and grants, overall the state loans and grants are a fly speck to Delaware’s private sector.

While Strategic Fund investments in projects of opportunity are fine, the state’s primary focus should be on those factors that drive investment and long-term economic growth in Delaware. These factors include the tax burden and tax rate stability, the regulatory environment, the quality of public education, labor skills and costs, infrastructure, energy costs, and the incentives to create value, including entitlements that discourage work and contracts that encourage pleasing government officials rather than producing goods and services that meet the market test.

In the near-term one hopes that all the money and effort by state officials will have positive outcomes. And certainly it gives the appearance of action. It is should be noted, however, that the economic boom years for Delaware during the 1980s were spurred on by deregulation, lower taxes, and the institution
of fiscal constraints on state government spending.

Previous articleThe 2011 Christ Church Green Show
Next articleMSquerade
- Thank you to our sponsor -
- Thank you to our sponsor -
- Thank you to our sponsor -

Latest News

State to ramp up vaccines for teachers, has given 253,535 doses of vaccine

253,535 doses of the COVID-19 vaccine had been administered as of Friday, the state said.

Schools hope summer programs, support will avoid students being held back

  Droves of students will not be held back because of interruptions caused by the COVID-19 pandemic, Delaware educators say. Instead, schools will bear down on...

Do More 24 shatters record in first three hours, ends with 5 times last year’s total

The grand total for the 2021 event will be announced Saturday by 8 p.m.
- Thank you to our sponsor -
- Thank you to our sponsor -

More Articles Like This

%d bloggers like this: