Delaware is Small State with Big Hopes for Recovery
More than 60 percent of all Fortune 500 companies, and 50 percent of all American corporations, are incorporated in Delaware, said the state’s Governor Jack Markell.
Corporations that call Delaware home (or perhaps, their "home away from home") range from JP Morgan Chase and Google to the state’s native son, DuPont. Nearly 30 percent of the state’s total revenue is generated by the Delaware Division of Corporations.
Taiwanese silicon giant Motech recently joined the ranks of corporations based in Delaware when it merged with General Electric’s silicon business located in the state. In relation to Motech’s decision to set up shop in Delaware, Markell, a Democrat, said, “We have a fantastic workforce and we’re a very responsive state.”
The deal saved about 70 jobs in the area, and Motech officials have announced plans to hire an additional 75 people by year's end. In addition, Delaware passed a balanced budget for 2010, and as recently as May was not operating in a deficit.
“We’re very engaged in the budget process,” said Markell, explaining that his administration reaches out to state employees and citizens to court their ideas on how to spend efficiently. While a balanced budget is an integral part of economic recovery, Governor Markell is also committed to creating more jobs, saying, “We’re not going to cut our way to a prosperous future.”
Delaware is growing rapidly, with revenues expected to increase by almost $65 million dollars during the 2011 fiscal year. In addition, the state stands to receive $76 million from the federal government as part of HR1586, signed by President Obama this month. Governor Markell said the state still needs federal money, despite its growing revenue, because the demand for services has grown, as well.
“But obviously we’ve got to wean our way off of that, we’re doing that right now,” he said in relation to dependency on federal funding. “We have to continue to grow our way out of this.”
As part of efforts to reduce state spending, Markell has reduced the size of Delaware’s government by more than 500 people, cut the number of cars in the state’s fleet, moved out of leased real estate, and even renegotiated state cell phone contracts. In doing so, the state government has cut spending by about $50 million.
Delaware has also made cuts in education, but not so much as to deter the state from placing first in President Obama’s “Race to the Top” competition, in which all 50 states competed to improve their educational standards and performance in order to win federal grant money.
“Race to the Top really was what goes on in the classroom, and in the end that’s the only thing that matters,” said Markell. “We’ve got a great data system to build on following the progress of our students, and we’ve got a real focus on making sure we’ve got strong teachers in every classroom and good leaders in every school.”
“We have to do everything we can to make sure we have the right workforce, the good schools, reasonable taxes, the good quality of life. When we do those kinds of things we’re not only going to have companies incorporating here, we’re going to have companies that are employing Delawareans.”
“We live and die based on our ability to keep the folks who are employing Delaware satisfied and happy. We stop at nothing to make sure that our businesses like doing business here.”
Look for Nicole Lapin's interview with Delaware Governor Jack Markell in the first report of her "States of Pain" series Monday, October 25 on "Worldwide Exchange," 5-6am ET on CNBC.