Final report of the Delaware Tomorrow Commission

[From the U.S. Government Printing Office, www.gpo.gov]

08390

Coastal Zone
Information
Center

REPORT OF THE OCT 7 1976
DELAWARE TOMORROW COMMISSION
TO THE
HON. SHERMAN W. TRIBBITT
GOVERNOR OF DELAWARE
APPENDIX

COASTAL ZONE
IFORMATION CENTER

HC
107
.D3 January, 1976
D393
1976

FINAL REPORT

THE DELAWARE TOMORROW COMMISSION

Appendix

January 1976 COASTAL ZONE
INFORMATION CENTER

U.S.DEPARTMENT OF COMMERCE NOAA
COASTAL SERVICES CENTER
2234 SOUTH HOBSON AVENUE
CHARLESTON , SC 29405-2413

The preparation of this report was financed in part
through a Comprehensive Planning Grant from the
Department of Housing and Urban Development (CPA-
DE-03-26-1010).

Property of CSC Library

TABLE OF CONTENTS

Appendix A

Executive Order Number Forty-Eight, June 19, 1974
Executive Order Number Fifty-Three, September 9, 1974
Executive Order Number Fifty-Six, October 2,, 1974

Appendix B

Section 1 - Revenues
Section 2 - Expenditures
Section 3 - Assumptions and Methodology for Revenue Projections and
Expenditure Projections From 1973 Through 1585
Section 4 - Part V of the Report Entitled "Committee to Investigate
Delaware State Finances"
Section-5 - Extracts From the Min *utes of the July 30, 1975, Meeting
of the Delaware Tomorrow Commission

Appendix C

Economic Developm*nt Committee Summary

Appendix D

An Analysis of Changes in the Delaware Tax Code, 1960-1974

Preliminary Analysis of Delaware Employment in Nine Major
Industrial Sectors

Appendix E
Delaware Tomorrow Commission Meeting Minutes

October 2, 1974
April 8, 1975
May 27, 1975
June 4, 1975
June 9, 1975
June 16, 1975
July 2, 1975
July 10, 1975
July 23, 1975
July 309 1975
November 25, 1975
January 28, 1976

Appendix F

Dela ware Tomorrow Commission Public Hearing Transcri pts

January 6, 1976 - Kent County
January 7. 1976 - New Castle County
January 8. 1976 - Sussex County

SECTION III

APPENDICES

APPENDIX A

'TS 01F DEL,11V
f

EXECUTIvE DEPvrZTMENT
DovEiR

.EXECUTIVE ORDER
NUMBER FORTY-EIGHT

TO: Heads of All State Departments and Agencies

RE: The Establishment of the Delaware.Tomorrow Commission

WHEREAS, it is essential that the State of Delaware devise a
statewide development policy on growth in the areas of industrial,
commercial and residential development including open space, recreation,
and transportation; and'

WHEREAS, the General Assembly has recognized these p roblems by
enacting specific legislation or resolutions, such as Senate Bill 257,
House Bill 882 and House Concurrent'Resolution 49, dealing with specific
areas of this overall general problem.

WHEREAS, in 1971 the State of Delaware *enacted into law the Coastal
Zone Industrial Control Act which regulates industries in the coastal
areas of the State, and in the two years since the passage of this Act
there has been considerable controversy over it and the State's policy
on economic growth; and

WHEREAS, a comprehensive State development policy must be developed
for all, but only after considering the interests of not just government
but business, industry, labor, environmentalists, and most importantly,
the people of Delaware.

NOW, THEREFORE, 1, SHERMAN W. TRIBBITT, by the authority vested.in
me as Governor of the State of Delaware, do hereby declare and order as
follows:

1. The "Delaware Tomorrow.Commission" is hereby established.
2. The Commission.is charged with the responsibility to
develop a statewide plan for growth.

3. The Commission shall investigate development policy of other
States as well as hold.meetings and seminars throughout the State
to receive contributions from bur citizens.

4. This Commission shall submit to the Governor and the General
Assembly by June 1, 1975 its findings and recommendations. However,
the final decision as to the date of submission of the Commission's
findings shall rest with the Commission. At the discretion of the
Commission, draft legislation may be submitted to implement its
findings. Its report shall include but need not be limited to a

EXECUTIVE ORDER
NUMBER FORTY-EIGHT PAGE TWO

strategy for inddstrial, commercial and residential development,
land use and statewide zoning, a policy regarding transportation,
recreation and open space consistent with a,quality environment.

5. The Commission shall consist of 27 members who shall be
appointed as follows:

1. Secretary, Department of Highways and Transportation

2. Secretary, Department of Labor
3. Secretary, Department of Community Affairs and
Economic Development

4. Secretary, Department of Natural Resources and
Environmental Control

5. Director, State Planning

6. Mayor of Wilmington, or his designee

7.. New Castle County Executive, or his designee

SP President, Kent County Levy Court, or his designee

President, Sussex County Council, or his designee

10. President, League of Local Governments, or his
designee

11. President, Delaware State Chamber of Commerce, or
his designee

12. President, Building Trades Council, or his designee

13. President, State Labor Council, or his designee

14. President, Delawareans for Orderly Development, or
his designee

15. Chairman, Sierra. Club, or his designee
16. President, Save our Shores, or his designee

17. Chairman, Common Cause of Delaware, or his designee
18. Chairman, Coa@tal Zone Industrial Control Board, or
.his designee

19. Chairman, Greater Wilmington Development Council, or
his designee
26. 2 members of the House of Representatives, to be
designated by the Speaker of the House, one from each
political party

EXECUTIVE ORDER
NUMBER FORTY-EIGHT PAGE THREE

21. 2 members of the Delaware State Senate, to be
designated by the President Pro Tempore of the
Senate, one from each political patty

22. 4 members to be designated by the Governor

6. The Chairman of the Commission shall be designated by
the Governor and the Vice-Chairman of the Commission shall be
designated by a majority of the members of the Commission.
APPROVED [email protected]*day of-June, 1974.

ATTEST:

Secyetary of State
@Governo

ov@ DE;i@-Ajv

EXPECUTiviE DEP,%rzTMIENT
DOVER

EXECUTIVE ORDER
NUMBER FIFTY-THREE

TO: Heads of All State Departments and Agencies

RE: Amendment to Executive Order No. 48

WHEREAS, Executive order No. 48 establishes a Delaware Tomorrow
Commission to consist of 27 members, including,four members to be
designated by the Governor; and

WHEREAS, additional members are deemed desirable in order to
properly consider the interests of government, business,.industry, kaboIr,
environmentalists, and the people of Delaware.

NOW THEREFORE, I,.SHERMAN W * TRIBBITT, by virtue of the authority
State of Delaware,.do hereby,drder and
vested in me as Governor of the
declare as follows:

1. Paragraph-Sof Executive Order No. 48 is amended by:

(a) increasing the total membership of the Commission from
27 to 30 members;

(b) increasing the number of members to be designated by
the Governor from 4 to 6 members;

(d) adding a new subparagraph 18 to read as follows:
018. President, League of Women Voters, or,her designee".

2. Executive order No. 48 is amended by adding a new paragraph 7
as follows:

"7. The Chairman of the Delaware Tomorrow.Commission.may
appoint a'secretary and an assistant secretary for
the Commission, both to serve at the pleasure of the
Chairman."

3. Executive Order No.,48 is amended by adding.a new Paragraph 8
as follows;

*8. In addition to the members of the Delaware Tomorrow
Commission provided for.in this Order, the Governor,

EXECUTIVE ORDER
NUMBER FIFTY-THREE PAGE TWO

may create subcommittees and name members to such
subcommittees as he deems appropriate without issu-
ing additional Executive Orders. A letter of appoint-
ment signed by the Governor shall be sufficient
authority for such appointee to serve on such sub-
committee."

AP t 9th day of mber 1974

Governor
A--
ATTEST:

Secretary of -State

CUTIVIE DEPARTMEIVT
DOVIEIR

EXECUTIVE ORDER
NUMBER FIFTY-SIX

TO: Heads of all State Departments.and Agencies

RE: Amendment to Executive orders Number 48 and Number 53'

WHEREAS, Executive Order Number 48 establishes a Delaware
Tomorrow Commission and Executive Order Number 53 amends and clarifies
Executive Order Number 48; and

WHEREAS, certain additional changes and clarifications are needed
to refine the structure of the Commission;

NOW, THEREFORE, I, SHERMAN W. TRIBBITT, by virtue of the authority,
vested in me as Governor Of the State of Delaware, do hereby order and.
declare as follows:

l.. Paragraph 5 of Executive Order Number 48 as amended by
paragraphs 1 (a) and 1 (b) of Executive order Number 53
isfurther amended by:

,(a)
increasing the total membership of the Commission from
30 to 31 members.

(b) increasing the number of members to be designated by
the Governor from 6 to 7 members.

2. Executive Order Number 53 is amended by striking in full para-
graph 2 and substituting in lieu thereof the following:

Executive Order Number 48 is amended by adding a new paragraph
7 as follows:

"(7) The Chairman of the Delaware Tomorrow Commission may
appoint a secretary for the Commission. The Chairman
may also appoint counsel to the Commission. Both to
serve.at the pleasure of the Chairman.."

3. Executive-Order Number 48 is amended by-adding a new paragraph
9 as follows:

"(9) The Governor may appoint Chairmen to the subcommittees
created as defined in paragraph 8. A letter of appoint-
ment signed by the Governor shall be sufficient authority
for such appointee to serve as.Chairman."

EXECUTIVE ORDER
NUMBER FIFTY-SIX PAGE TWO

APPROVED this 2nd day of October, 1974

Governor

ATTEST:

Secretary of State

APPENDIX B

Appendix Bcontains the bulk of the material presented to the Commission

by the Cost of Public Services Committee in its April 4, 1975, report.

Section 1

Relates to Revenues.

Section 2

Pertains to Expenditures.

Section 3

This section includes the assumptions and methodology for revenue projections

and expenditure projections from 1973 through 1985.

In order to refine these figures relati,ng to both expenditures and revenues,

the actual expenditures and revenues for 1974, 1975 and estimates for 1976 were

included in the computations.

Section 4

This section contains Part 5, entitled "Prospects for State Needs and

Resources" from the April, 1969 Report of the Committee to Investigate Delaware

State Finances, chaired by Robert W. Tunnell. This study, completed over six

years ago, includes a thought-provoking section on forward projections of

expenditures and revenues.

Section 5

This section is comprised of extracts from the minutes of the July 30,

1975, meeting of the Delaware Tomorrow Commission, and includes commentary on

the subject of revenues and expenditures.

APPENDIX B -SECTION 1

REVENUES

COMMENTS

On the following pages are six tables which summarize revenue collections

by the major governments in the State of Delaware for. the fiscal years 1968

through 1973. Table I shows total revenues of the State, the three counties-

the school districts and the cities of Dover, Newark and Wilmington- -.-,@bles

II and I II break down these totals into revenues from each unit's own sources

and revenues received from sources beyond the control of the unit. Tables TV, V

and VI show the same data: on a per capita basis. Reviznu'L-s of governments other

than those listed above are not included in.this report because revenue data of

these other governments was not readily available and the benefits expected from

including them were not.sufficient to justify the costs of collecting the addi-

tional data. Only five years of data are presented because the purpose here is

to focus on recent trends and events that mav.influence future revenue collection..s

rather than to present a more complete hisrorical analysis of revenues. Data for

fiscal year 1974 were not yet available for all included governments at the'time

the prima ry data was assembled and, therefore., no 1974 data are presented,. The

breakdown into revenues from own sources and external sources represents an.attemri

to show clearly the importance to the various Delaware Governments of events be.vo,.d

the;,- control- The inclusion of franchise receipts in the external sources

category is legitimately debatable but does effectively emphasize the sensitivity

of revenues in the State to economic as well as political events outside of the

State.

Table I shows that local government revenues grew more rapidly than StatE
government revenues in the 1968-1973 period. Tables Il and III show that this

was true both for revenues from own sources and for revenues from externally con-

trolled sources. (In the case of local governments, the externally controlled

funds are all federal funds.) During the 1968- 1973 period, State government

revenues grew at an aver-age aT annual rate of only 13% while those of major local

governments grew twice as fast, at a rateof 26% per year. This high growth

rate of revenues of major local governments is primarily attributable to growth

in county government revenues and not to growth in city, government revenues,

While the three county governments experienced growth rates of 31%, 34% and 20%

per year, the three largest cities in Delaware experienced revenue growth rates

of only 19%, 19% and 20% per, year.

Table IV shows that the pattern of more rapid growth at the local level than

at the State government level is repeated when revenues are on a per capita basis.

Tables V and VI show that Kent and Sussex county.governments have experienced

relatively slow per capita revenue growth from their own, sources so that the high

rates of increase in per capita total revenues is attributable to very high rates

of increase in federal subsides to the counties.

In considering the per capita revenue tables it is important to remember that

the figures only show total revenue collections from all sources per person resident

in a particular jurisdiction_ They do not show the revenues being contributed for

public services, on the average,by the residents of the jurisdictions, Much of

the variation in revenues collected per resident is due to (1) differing degrees

of collection of revenues from nonresidents (as is the case of Wilmington's wage

tax), (2) differing amounts of taxable nonpersonal property (as with the capital

facilities in New Castle County) or (3) differing levels of collections for

essentially private services (as with Newark's .electricity rates),

It Is interesting to note that local revenues Of school districts have grown

at approximately the same rate as total revenues from all sources in the State and

that this is true in both total and per capita terms . While the six tables which

follow present revenues from several useful perspectives, they do not provide

enough information to permit reasonably acceptable projections into the future.

This task will require a breakdown. of revenues into categories on the basis of

sensitivity of the source to different sorts of influences. For example, some

sources are primarily sensitive to population (alcoholic beverage taxes) while

others respond to income changes (income taxes) or other national economic con-

ditions (corporate income taxes) and still others are relatively insensitive to

these influences (property taxes).

TABLE I

TOTAL MAJOR GOVERNMENT REVENUES

1968-1973

Fiscal Years

1973 1972 1971 1970 1969 1968 Growth Rate 5
In Thousands of Dollars
Major Delaware Revenues 2 $581,295 $509,974 $421,578 $356,884 $296,275 $277,452 .16

State Government 7 407,174 375,005 306,823 263,937 221,839 215,855 .13

Local Government: 174,12". 134,969 114,755 92,947 74,436 61,597
Ail School Districts 42,912 V,417 34,016 29,0056 23,6556 20,46@6 - .16
Major Local Governments 3 131,209 97,552 80,739 63,942 50,781 41,193 .26

New Castle County: 145,309 115,342 96,024 74,592 60,885 55,472
School Districts 35,633, 30,518 27,336 22,832 19,336 16,648 .16
County Government 48,320 25,574 26,796 12,719 13,455 13,093 .30
City of Newark 7,785 5,910 4,948 4,218 3,655 3,303 .19
City of Wilmington 53,571 53,340 36,944 34,823 24,439 22,428 .19

Kent County 22,556 14,343 13,945 14,105 10,232 3,306
School Districts 3,965 3,651 3,662 3,530 2,405 2,113 .13
County Government 5,173 1,644 1,464 1,434 1,459 1,193 .34
City of Dover 13,418 9,048 9,141 6,369 5 - - .20

Sussex County: 6,256 5,284 4,786 4,249 3,320 2,818
School Districts 3,248 3,018 2,642 1,915 1,642 .15
County Government 2,942 2,036 1,768 1,607 1,405 1,176 .20
174,121 134,969 114,755 9.2,946 74,437 61,596
Source: Data are from Tables 7, 8, 10, 18, 19,20, 24,25 and 26 in "Statistical Tabulations", Delaware Tomorrow Commission, Cost of Public
Services Sub-committee, January 16, 1975; and from William A. Brown, Department of Public Instruction.

DELAWARE TOMORROW COMMISSION

COST OF PUBLIC SERVICES COMMITTEE

TABLE I

TOTAL MAJOR GOVERNMENT REVENUES

NOTES

Note I Excludes municipal governments except Dover, Newark, and Wilmington and
any public agencies which receive revenues other than state, county, and
city governments and school districts.

Note 2 Includes state government. and local government with exceptions noted
in Note 1.

Note 3 Includes Kent, New Castle., and Sussex county governments and Dover,
Newark and Wilmington city governments.

Note 4 Growth from 1968-73 at annual rates, except where 19 68 data are missing.

Note 5 Approximate value estimated from trends; actual data not assembled yet.

Note 6 Sub-components do not add to total because of rounding.

Note 7 Includes Federal Funds to school districts and state-agencies.

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TABLE II

MAJOR GOVERNMENT REVENUES FROM EXTERNALLY CONTROLLED SOURCES

NOTES

Note I Excludes municipal governmen.ts except Dover, Newark, and Wilmin.-ton and
any public agencies which receive revenues other than state, county, and
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in Note 1.

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Newark, and Wilm-ington city governments;

Note 5 Growth from 1968-1973 at annual rates, except where 1968 data are
missing.

Note 6 Federal funds to school districts not available by county.

Note 7 Includes Federal.funds to school districts and state agencies.

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DELAWARE TOMORROW COMMISSION

COST OF PUBLIC SERVICES COMMITTEE

TABLE.III

MAJOR GOVERNMENT REVENUES FROM:DELAWARE SOURCES

NOTES

,Note 1 -'Excludes municipal. governments except Dover, Newark, and Wilmington and
any public agencies which receive revenues other-thanstate, county and
city governments and school districts.

Note 2 Delaware sources exclude Federal funds allocated to school districts
and state agencies, Federal Revenue Sharing funds (to the state governments,
the three county governments of Dover, Newark, and Wilmington), franchise
taxes and grants and donations.

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Note 1.

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Newark,, and Wilmington city governments..

Note 5 Growth from 1968-1973-at annual rates, except where 1968 data are
missing.

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DEIAWARE TOMORROW COMMISSION

COST OF PUBLIC SERVICES COMMITTEE

TABLE IV

PER CAPITA TOTAL MAJOR GOVERNNENT REVENUES

NOTES

Note 1 Excludes municipal governments except Dover, Newark, and Wilmington and
any public agencies which receive revenues other than state, county,
and city governments and school districts.

Note 2 Includes state government a nd local government with exceptions noted
in Note 1.

Note 3 Includes Kent, New Castle, and Sussex county governments and Dover,
Newark, and Wilmington city governments.

Note 4 Growth from 196.8-1973 at annual rates, except where 1968 data are
missing.

Note 5 Does not include data for city of Dover, 1968,

Note 6. Sub-components do not add to total because of rounding.

Note 7 - Includes Federal funds -to school districts and state agencies.

Note 8 - Population of state is used as divisor,

DELAWARE TOMORROW COMMISS ION

COST OF PUBLIC SERVICES COMMITTEE

TABLE V

.,PER CAPITA MAJOR GOVERNMENT REVENUES

FROM EXTERNALLY.CONTROLLED SOURCES1,2

Fiscal Years Growt
9 3 1972 1971 1970 1969 1968 Rate
L-7

Actual Dollar Amounts

Ma'or Delaware kcvertues3 254.7
.16

State Government 271.4 242.5 201.6 121.5 146.2 .13

Local Goverrrment
All School Districts
Major Local GovernmenLs4 42.8 12.2 8.9 6.1 4.0: 4.8 .55
=7

New Castle County,
School Districts
County Government 19.0 3.0 1.9 81 ..65 .81 .88
City of Newark .3@. 5 8.4 13..8 .10.4 9.1 .34
City of Wilmington 146.4 67.5 47.3 32.1 20.6 .42

Kent County-
School Districts
County Government 38.7 1.2 i.3 .1 -5 .1 2.29
City of Dover 2.0 8.3 9.9 .5 .83

Sussex County:
School Districts
County Government 12.1 1.3

Source: Table II and population. figtires which are U. S. Census figures,from
Delaware Statistical Abstrapt, 1974,

DELAWARE TOMORROW COMMISSION

COST OF PUBLIC SERVICES COMMITTEE

TABLE V

PER CAPITA MAJOR GOVERNMENT REVENUES

FROM EXTERNALLY CONTROLLED SOURCES

NOTES

Note 1 Excludes,municipal governments except Dover, Newark, and Wilmington and
any public agenci .es which receiverevenues other than state, county, and
cIitIy gove.rnments and school districts.

Note 2 Externally controlled sources i.nclude.Federal.fun,ds.allocated to school
district and state agenci Ies, Federal Revenue Sharing funds. (to the state
government, the three county governments and the governments of Dover,
Newark, and Wilmington), franchise taxes"and all grants and donations.

Note 3 Includes.state government and local government with exception noted
in Note 1.

Note 4 Includes Kent, New Castle, and Sussex county governments and Dover,
Newark, and Wilmington city governments.,

Note 5 Growth from 1,968-1973 at annual rates, except where 1968 data are
missing...
Note 6 Includes Federal funds to.school districts and state agencies.

Note 7 -.Population of state is used as. divisor.

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DELAWARE TOMORROW COMMISSION

COST OF PUBLIC SERVICES COMMITTEE

TABLE VI

PER CAPITA MAJOR GOVERNMENT REVENUES

FROM DELAWARE SOURCES

NOTES

Note 1 Excludes municipal,agencies governments except Dover, Newark and
Wilmington and any public agenc'ies which receive revenues other than,
state, county, and city governments and schooldistricts.

Note 2 Delaware sources exclude Federal funds allocated to school districts
and state agencies, Federal Revenue Sharing funds.(to the sta Ite governments,
the three county governments.of Dover, Newark, and.Wilmington) franchise
taxes and grants and donations.

Note 3 Includes state government and local government with exception noted
in Note 1.

Note 4 Includes Kent, New Castle, and Sussex county government and Dover,
Newark, and Wilmington city governments.

Note 5 Growth from 1968-1973 at annual rates, except where 1968 data are
missing.

Note 6 Does not include data for city of Dover, 1968,

Note'7 Population of state is u.sed as divisor.

APPENDIX B SECTION 2

EXPENDITURES

INTRODUCTION

This report summarizes historical data about the categorical costs o f
public services provided by the State of Delaware and its local governments
(counties, municipal i ties and school districts) for the fiscal years 1960'
to 1973; the categories are those of the U.S. Bureau of the Census Classi--5'-
ication System. The. year 1973 is the last for which data are as yet avail-
able under this classification system, and compar Iable data for .1974 are not
readily 4,@alilable directly from governmental financial records.

The direct categorical ;axpenditures of the state and of local govern-
ments in the aggregate are presented in five tables. The term "direct"
01
means that expenditures are assigned to the recipient level of government;
for example, state. aid to school districts is included in the expenditures
of local governments for education,.,

Table I shows the.absolute amount of, expenditures. Tables 2 and .3 show
the same data on percentage and per capita bases.. 'Table 4 shows selected.
..statistics on absolute and per.capita amounts of debt. Table 5 shows the
contributions of gove rnment to pension funds.; Each of tl@ese tablesis d,is-
cussed below with the@ .focus in the combined expenditures of state and local
governments in orden-to-s tal-cost-of
how. the-to. c --government in Delaware..

Individual data. collected for the counties.of New Castle, Kent and
4usse.., the three municipalities of,Wilmington, Newark, and Dover, and the
districts are not presented here.

ANALYSIS OF TABLE 1

The schedule below, abstracted and developed from Table 1, shows the
absolute and proportionate increases in categorical exoenditures between
1968 and 1973. Capital outlay and current operations are shown separately
for those categories where data-were available. Expenditures for all cap-
Ital outlay increased 55 percent, or 9.2 percent on an average annual
basis, from $111.7 million in 1968 to $173.1 million in 1973; current..op er-;-
ations increased 106 percent, or 15.6 percent annually, from $227.9 million
to $470.3 million. During. this five-year period the population increased
by 7 percent, or 1.4 percent. annually, from.535,000 to 573,000.

Education showed the largest absolute increase of $151 million, or
108 percent, while fire protection. showed the smallest increase of $1.2
milli-on, or 57 percent. Sewera,-e and parks and recreation showed the two
C)
largest proportionate increases of 304 percent (32 percent annual average',
and 388 percent (37 percent annual .average) respectively, while highways
had the smallest increase of 24 percent (4.3 percent annually). Education
showed the largest increase in capital outlay of $26.5 million (74 percent
or 12 percent annually) while health and hospitals. showed. no -incr.ea se a-t
all; education also showed the largest increase in current operations of
$124.4 million (120 percent, or 17 percent annually), while sewerage showed
thesmallest increase of $1.3 million (50 percent, or 8.4 percent annually).

it should be no-ted that absolute increasestor capital outlay are more
erratic.than those for current operations, so that proportionatechanges.in
the former are less instructive than those of the latter. ProT)ortionate
changes in capital outlay are miuch mote affected by the, selectlon of the
base year.

ABSOLUTE AND PROPORTIONATE INCREASES
IN CATEGORICAL EXPENDITURES BETWEEN 1968 AND 1973
([email protected] Developed from Table 1)

Amount
(Millions) % A
Annual
1968 1973 $ Total Avg

TOTAL @339.6 $643.4 @303-8 90 13.6
Capital outlay 111.7 173.1 61.4 55 9.21
Current Operations .227.9 470.3 242.4 106 15.6
Education 139.5 150.9 108 15.8
Capitaloutlay .35.6. 6.2.1 26.5 74 fl.8
Current operations 103.9 228.3 124.4. 120 17.0
Highways 66.8 82.6 15.8 24 4.3,
Capital outlay 49.8 65.7 10.9 22 4.3
Current operations. 17.0 21.9 4.9 29 5..21
@Pu@bl i c,.. Wel f ar e 21.9 49.1 271.21 124 17.5
Health & Hospitals 18.5 30..7 12.2 66 10.7
Capital outlay 3.4 3.3 0.1) (3)
Current operations 15.1 27.4 12.3 81 12.7
Pdlice Protection' @7.2 17.1 9.9. 138. 18.9
Fire Protection Ll. .3.3 1.21 57 9.5
Sewerage, 4.7 19-0 14.3 -304@ 32.2
Capital outlay 2.111 15. 11 .13.0 6.119 48.4
Current Operations 2,.6. 3*-. 9 l..3 50 8.4
Sanitati Ion 2.0 4-1 2.1 .105 .15.4
Parks--&--Re-crL-at-ion 1-7 -38.8, 37.3
Financial.Administration 5.1: 10.4... 5@. 3. -.104 15.3
General Control 7.4 17.3. 9.9 134 18.5
Interest on General Deb@ 19.9 33.0 1@3. 1 @66 10.7
All Other 43.1 77.7 34.6 80 12.5
CapitalL Ou tl-ay 31.5 10.7 51 8.7
Cur.rent operations 22.3 46.2 213.9 167 115.7

*Expressed.as a compound growth rate.

Interest on general@debt-increased,66.percent, or 10.7 percent on an
average annual basis, from @19.9 million to $33.0 million. . Debt retire
ment, analyzed in detail in Table 4, increased.48 percent, or 8 percent on
an average annual basis, from $30.5 million in 1963 to $45.0 million in 1973.
-Contributions to pension funds, analyzed in detail in Table 5, increased
from $4.9 million to $20.3 million.
in the schedule below, amounts.for debt retirement and pensions are
added to total expenditures for current operations in 1968 and 1973 to com-
plete the picture.

Amounts in Millions
1968 1973

Current Operations .(Table 1) 227.9 $ 470.3
Long-term Debt Retirement (Table 4) 30.5 415.0..
Pensions (Table 5) 4.9 20. 3
Total $ 535.6

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ANALYSIS OF TABLE 2

The sched-..
Table 2 shows the data in Table 1 on a percentage basis.
ule below, derived from these tables, shows categorical expenditures as
a percentage of total direct expenditures for 1968 and 1973. The distinc-
tion between capital outlay and current operations is made wheredata
permit.
Amounts in
Percentages
1968 @1973

TOTAL 100 100
Capital Outlay 32.9 26.9
Current'Operations 67.1 73.1
*Education 41.1 45.1
.,Capital Outlay 9.6
Current operations 30.6 35.5
Highways 19.7 12.8
Capital outlay 14.7 9.4
Current Operations 5.0 .3.4
*Public Welfare 6.4 7.6
Health & Hospitals 5.4 -4.8
Capital Outlay 1.0 0.5
Current Operations 4.4 4.3
*Police Protection 2.1 2.6
Fire Protection 0.6 0.5
!@Sewerage, 1.4 2.9
:Capital Outlay 0.6 2.3
Current Operations 0.8 0.6
Sanitation 0, 6 .0.6
Parks & Recreation. 0.5 1.3
Financial Administration 1.5 1.6
General Control 2@2 2.7
Interest on General Debt 5.8 5.1
All other 12.7 12.1
Capital outlay 6-1 4.9
Current Operations 6.6 7.2

Between 1968 and 19,73 the relative burden of certai -n categories of
expenditure (measured as a percentage of total direct ex*penditures) in-
creased in so-me insta .nces and decreased in others. The starredcatego .rie.s
are those whose relative.burden has increased, while the unstarred cate-
gories are those whose relative burden has decreased or remained unchanged.

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slightly.

The relative burden of interest on general debt decreased slightly
.from 5.8' percen t to 5.1 percent., Deb" retirement (analyzed in Table 4)
increased direct expenditure for current operation by 13.4 percent in
1968 and 9.6 percent in 1973. Contributions to pensions funds (analyzed.
in Table 5) added 2.2 percent in 1968 and 4.3 percent in 1973.

ANALYSIS OF TABLE 3

The absolute amounts in Table I are shown on a per capita basis in
Table 3. Per capita ficglures in theschedule below were abstract(@d from
Table 3 for 1968 and 1973. Per capita expenditures for capital outlay
increased 43 percent, or 7.5 percent on an average annual basis, from.
@209.25 to,$300.52, while current operations increased 91 percent, or 14
percent on an average annual basis, from $4,26.75 to $816.49.

Education accounted for the single largest increase of $242.8.9
($40.92 for capital outlay and.$201.98,for current operations). The in-
crease of $24.15 ($2.2.93 for capital outlay.and $1.92 for current opera-
tions) for sewerage and $11.35 for parks andrecreations accounted for
the two largest proportionate increases of 273.percent (30 percent annually)
and 366 percent (36 percent annually), respectively; the increase of .$18.40
for highways (@12.02 for capital outlay and $6.38for current operations)
was the smallest proportionate increase at 15.percent (2.7 percent annually.)

Per capita amounts for capital outlay are less instructive than for
current-operations f or- reasons --similar to those-: gi.verr-in-the analysis-of
Table 1.

In the schedule below, per capita amounts for debt retirement and pen-
sion are added to the per capita expenditures for current operations in
1968 and 1973 to complete the picture.,

1968 1973

Current Operations (Table.3) $ 426.75 816.49
.Long-term Debt Retirement (Table 4) 57.22 78.12
Pension5-(Table 5) 9.16 35. 41
$,493.13 930.02

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Per Capita Amounts Percent of Increase
1968 1973 Increase Total Annual Average
TOTAL $636.00, $1,117.01 $48 1.0-1 75 12.0
Capital Outlay 269.25 300.52 91.27, 43 7.5
Current Ope Irations 426.75 816.49 3819.74 91 13.8
Education 261.22 504.11, 242.89 93 14.0
Capital Outlay 66.80 107.72 40.92 61
Current Operations 194.41 396.39 .201.98, 104 15.3
Highways 125.00 143.40 ' 18.40 15 2.7
Capital Outlay 93.24 105.26 12.02 2.4
Current Operations 311.75 38.13 639 20 3J,
Public Welfare 40.94 05.27 44,33 108 .15.8
Health and Hospitals 34.67 53.38 18.71, 64 9.01
Capital Outlay .6.46 .5.88 (0.58), (9) 0.8)
Current Operations 28.20 47.51 19.31. 68 .111.0
Police Protection 13.55 29.76 .16.21 120 17.0
Fire Protection 3.85 5.64 1.79 46 8.0
Sewerage 33.00 24.15 V3 30.1.
Capital Outlay 3.96 26.19 22,23 561 46.0
Current Operations 4.89 6.81 1.92- .39 6.8
Sanitation 3.72 7.15 3.43 92
Parks and Recreation 3.10 14.45 11.36 366 36.0
Financial Administration 9.40 17.97 8.57 91 13.8

General Control 13.78 3.0.18 16.40 119 17.0

Interest on General Debt 37.25 57.81 20.56 55 9.2

All Other
80.61 134.01 54.20 67
Capital Outlay 39.02 64.68 15.66 40 7.0
Current Operations. 41.59 80.13 38.54 93 14.0

*Expressed asa compound growth rate.

Interest on general, debt increased by $20.56,,or 9..2 percent on an
average annual basis. Long-term debt re.tirement,(analyzed in Table 4)
increased from $57.22 in.1968 to $78.12iin 103, or 6.5 percent-annually.
Contributions to pension funds (analyzed in Table 5) were $7.76 in 1968
and $33.38 in 1973

ANALYSIS OF TABLE 4

Table 4 shows tha t long:.-term debt retirement ranged from $30.5 million
in 1968 to $45.0 million in 1973, and the average annual amount was $39.8
million. State debt retirement ranged from $21.5 million to $33.0 miliion,
and the average annual amount was $23.5 million. Local government debt re-
tirement ranged from 88.4 million to *16.S million, and the average annual
amount was $11.3 million.

The schedule below, derived from Table 4, shows state and local debt
retirement as a proportion of total debt retirement for 1968 and 1.973.
The relati've shares have not changed much; the state's share increased
sli-htly from 71 percent to 73 percent, while the local governments' share
decreased from 29 percent to 27 percent.

1968 1973
Amount Amount
(Millions) % (Millions)

Tot al $30.5 100 $L5.0 100
State 21.5 71 33.0 73
Local 9.0 29 12.0 27

In 1973 when total state direct expenditures were $352.2 million, debt
retirement, which is not included in the amount, of $33.0 million added
about 9 percent to rhese expenditures. Total local direct expenditures were
_$291.2 million, and debt retirement of $12.0 million added about 4-percent
to these expenditures.

On a per capita basis Table 4 shows that debt retirement ranged from
$57.22 in 1968 to @78.12, and this is an average annual 3.ncrease of 6.5
percent. State debt retirement ranged from $40.34 to $57.29 for an average
annual increase of 7.5 percent, while local debt retirement ranged from
$16.88 to $20.83 for an average annual increase of 4.5 percent. During this
five-year period population increased by 1.4 percent on an average annual
basis.
At the close of fiscal 1973, outstanding long-term debt was $512.5
million for the state, an increase of 40 percent over 1968, and it was
312.5 million for local governments, an increase of 28 Dercent over 1968.
On a per capita basis these amounts were $889.76 and $542.53 respectively,
an. increase since 1968 of 30 percent for the state and 1@ percent for lo-
cal governments.

so M a*

TABLE 4

STATE AND LOCAL DEBT, SELECTED STATISTICS: 1968-1973
ITotal Amounts in Millions)

1973 1972 1971 1970 1969 1968
Total Per Capit Total Per Capita Total _Per Cpl@tta Total Per Capita Total Per Capi a Total Per Capita
Long-term Debt
Retirement $ 45.0 $ 78.12 $ 41.3 $ 73.10 $ 42.2 $ 75.49 $ 45.3 $ 82.66 $ 34.5 $ 63.89 $ 30.5 $ 57.22
State 33.0 57.29 29.8 52.74 31.9 57.07 28.5 52.01 26.1 48.33 21.5 40.34
Local 12.0 20.83 11.5 20.36 10.3 18.42 16.8 30.65 8.4 15.56 9.0 16.88
Debt Outstanding
(end of Fiscal Year) 870.4 1,511.11 811.5 1,436.28 736.4 1,317.35 709.9 1,295.44 709.3 1,313.52 622.2 1,167.35
Short-term 45.4 78.82 37.2 65.84 31.0 55.46 22.9 41.79 13.9 25.74 12.4 23.26
State 27.8 48.26 17.1 30.26 2.0 3.58 2.9 5.29 2.8 5.18 - -
Local 17.6 30.56 20.1 35.58 29.0 51.88 20.0 36.50 11.1 20.56 12.4 23.26
Long-term (General Debt) 825.0 1,432.29 774.3 1,370.44 705.4 1,261.90 687.0 1,253.65 695.4 1,287.78 609.8 1,144.09
State 512.5 889.76 471.6 834.69 431.4 771.74 418.0 762.77 426.4 789.63 366.0 686.68
Local 312.5 542.53 302.7 535.75 274.0 490.16 269.0 490.88 269.0 498.15 243.8 457.41

Source: U. S. Bureau of the Census, Governmental Finances. Per capita amounts computed.

ANALYSIS OF TABLE 5

Table 5 shows that in fiscal 1973, $20.3 million was contributed for
pensions, and this amount includcs $17.6 million from the state and $2.7
million from local governments; on a per capita basis these amounts were
respectively, $305.41, $30.65 and $4.76.

The $55.41 represents an increase of 286 percent over the 1968 fi.aure
of $9.16, but much of this fncrease is attributable to 1973 when the state
began to contribute to the pension fund on an actuarial basis.

TABLE 5

STATE AYD LOCAL CONTRIBUTIONS TO PENSION FUNDS
FISCAL 1968-73
(Amounts in Thousands)

State -Local S&L
Per Per Per %
Year Total Capita Total Capita Total Capita in p.c.

1968 3,499 6.53 1,412 2.63 4,911 9.16 -
1969 3,722 6.83 1,399 2.57 5,121 9.40 3
1970a 4,254 7.76 1,550 2.83 5,804 10.59 13
1971 6,220 11.17 1,857 3.33 8,077 14.50 37
_a
1974 b 7,335 12.85 2,393 4.19 9,728 17.04 18
1973 17,568 30.65 2,729 4.76 20,297 35.41 108

Source: State Pension office, Financial Records of Local Governments and
U.S.-Bureau of-the-Census, Finances-of Employee Retirement-S,
;-s-
.tems of State and Local Governments 1968-73.

aAn additional $5 million in 1970 and $ 1 million in 1972 was
appropriated from. the General MOLors Divestiture Fund.

bIncludes $9 million from serial notes to supply actuarial re-
quirements. PriDr to 1973, the state pension fund was not fully funded
on an actuarial basis, and state contributions to this fund were trans-
ferr--,' annually from the General Fund to provide for payrnancs to benefi-
ciaries.

cLocal pension funds are not now, or have not al,..:ays been,fully
fundo-d in all instances on an acz:uarial basis. As a resL_Iz, contributions
to pension funds include some paymenLs to beneficiares th-It were made from
GL:@,@ral Funds.

APPENDIX B -,SECTION. 3

Assumptions and Methodology for Revenue Projections
and Expenditure Projections From 1973. Through 1985

ASSUMPTIONS AND METHODOLOGY FOR REVENUE PROJECTIONS

In each of the following sections, a relationship between revenues that

existed in Fiscal Year 1973 is used as the basis for making projections to 1.35.

To the extent that 1973 represented a "typical" fiscal year for each relationship,

the projections may be considered useful. Additional assumptions are made in

each section. The importance of these-assumptions cannot be overemphasized; the

numbers produced are completely dependent upon the assumptions.

State Franchise Tax Revenues

Revenues will remain constant at the 1973 level in real terms. The number

of dollars received will increase as more firms.pay the maximum and if enforce-

ment continues to improve. These increased receipts may be, just enough to keep

pace with expected inflation of 5.15% per year. Other states.are also becoming
more competitive with Delaware for incorporation so'that it will,be difficult

to expand revenues from the franchise tax by attracting new firms.

1973 1985 Collections 1985 Collections*
Collections (in 1973 Dollars) (in 1985 Dollars)

$43,008,488 548,008,488 $87,706,707
*1,8269 = (1.0515)1.2

State Personal Income Tax Revenues

Personal Income Tax revenues will increase as the number of people in

the State increases.. Revenues will also increase as people's money incomes

increase and as they move upward into the higher tax bracke ts of the progressive

rate structure of the tax. Increases in money incomes are attributable to two

sources: (1) simple price and wage inflation causes.money incomes to rise and
.(2) real economic growth permits real per capita incomes to grow. If only

the first factor was operative, 1973 per capita income taxes could be simply..

inflated by the exoected annual inflation rate of 5.15%,to yield the 1985

level of per capita income taxes. The probability that real economic growth

will permit an expansion.of real per capita incomes means that the per capita

income tax must increase.more rapidly than inflation. Alreasonable assumption.

for the twelve year period from 1973 to.1985 might be.that real economic growth,
will av.erage,3% per capita per year. (This.means that total..real growth will.
be in excess of N per year but some will be required just,to.maintain the per
capita incomes of an increasing number of people.) Thus, per capita.money

incomes may increase at about 8.15% per year. Without using thedistribution

of individuals in each tax bracket and sPecific changes in that distribution

an accurate prediction of what an increase of.8.15% per year in per capi.ta

money,incomes will produce in income tax revenues is impossible. A conservative

assumption might be that such taxes will, rise'.by 8.15% per year. Therefore,

percapita personal income taxes in 198.5 would be 2.56 times as high as,they

were in.1973 (1.081512 2.56).

1973 Per Capita 1985 Per Capita .1985 Total Income@
Income Tax Income Tax Tax

$192.49 $492.77. $344,939,491
Plus Fiscal Year 1974
10 % Rate Change 34,493,949

$379,433,440

Flat Dollar Amount State Tax Revenues

Revenues from the Motor Fuel, Alcoholic Beverage, Cigarette Taxes and all

Motor Vehicle fees except the'documents fee are based on a number of units rather,

than a percentage of value. Thus, these..revenues will only expand as the

number of units ih.the.State does, or aspopulation-does.. Thus, these.taxes

are projected and remaining constant in per capita terms through 1985.

All,Other State and Local Revenues

While other revenue sources might be treated indiv idually,,none is nearilf,

as large as any of the preceding ones. Furthermore, many of the larger sources

among the remaining revenue sources seem logically to be closely tied, in real

terms, to population. Thus,all other.State and local revenue sources are

projected as remaining constant in 1973 dollars in.per capita terms. The 1985

level in 1985 dollars is produced.by multiplying by 700,000 people and inflating
at a rate of 5.15% per year.

Federal Funds to State and Loc al Governments

Projecting future federal policies is extremely hazardous. However, there

are several possible constraints on the level of federal funds available to the
State. First of all, it is unlikely that.there will be a net reduction in total

federal funding in real dollars. This would require the elimination or sub-

stantial reduction of programs and such actions do not seem likely. Further-,

more, with expanded federal funding for areas such as health care and mass

transit proposed,.any reductions in 'some programs are.likely to be offset-by

expansions.in others. Thus, a floor to future federal funding might be the pr-sent

level of such fund ing. On the other hand, we have observed a continuously rising

demand for public activity as personal.incomes have risen. It would be un-

realistic to fail to expect growth in real terms in the level of federal ex-

penditures. However, expansions in federal funding are basically limited by

the willingness of taxpayers to finance.ificreased spending., If one is.willing

to assume that taxpayers will continue to support a division of.government

activity between the federal government and state and local governments

approximately like the present one, then a reasonable approach is to assume

that federal funding received by the state and local governments will remain

a constant proportion of total state and local government revenues. Thus, the
federal portion of total revenues in 1985 -may,be approximately the same as it,

is in 1973.

1973 Federal 1973 Total 1973 Non-Federal 1973 and .1985 Ratio of
@Funds Revenues Funds Federal to Non-Federal*

$132,046,Q0 $529,818,985 $397,772,985 .3320

*Note that this ratio is the same as the ratio of per capita' federal
funds to Der capita non-federal funds...

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Local Government

It was assumed that the 1973 expenditures per capita would remain.constant.
This figure was t.hen multiplied by 700,000 (projected 1985 population) to yield

1985 expenditures.

State General Fund

The 1973 per capita expenditures were multiplied by 700,000 to.1yield.198.5

costs in 1973 dollars for police protection, fire protection, general controlt

debt service and the "all- other" categories. Assumptions used.in.the remaining

categories are as follows:

Education
An estimated 1985 expenditurelevel was produced by applying the

average annual increase 1973-76 in real dollars. Itwas assumed,this

level would then remain constant 1977-85. The Public Educat ion costs

were calculated by multiplying the per capita 1976 costs times 700,000.

Highways and Transportation

Highway expenditures were determined by multiplying the 1976 per,

capita costs times 700,000. Transportation systems costs were projected

to increase 10% per year 1976-1935 in real dollars.

Public Welfare

'The.1976 per capita expenditurel.wag assumed to remain constant and

and was multiplied times 700,000 to yield 1985 costs.

Health and Hospitals

It was assumed that one half of the se expenditures are growth

responsi ve and therefore, the 1976 per capita costs were multiplied by

700,000 divided.by 2. The other increases in expenditures,are for new
program costs, and were expected to equal 50% of the 1976 expenditures

times 7% annual growth 1976-1985.

Sewera2e and Sanitation

The 1976 per capita expenditures were assumed to remain constant

and were multiplied by 700,000 to yield 1985 costs.

Parks and Recreation
the 1976 per capita costs were projected to increase.2% annually

1976-1985 in real dollars. This figure was then multiplied by the 1985

population project.ion of 700,000.

Financial Administration,

The 1973 per capita average was projected to increase 1% annually

in real dollars and was multiplied by 7005000.

Pensions

The 1976total in 1973 dollars was projected to Increase 5% annually

.1976-1985.

An estimated annual inflation rateof 3% for the 1973-1985 period was

used in conver tinq 1973 dollars into 1985 dollars.

M '90 so '1W so "am 'no AM

TABLE 11

1973 AND PROJECTED 1985 GOVERNMENTAL EXPENDITURES
BY TYPE
(Millions of Dollars)

1973 Per Total 1985 1985 Local
1973 Local 1973 Total 1973 Per Capita Local Governmental 1985 State and All Other
1973 Total 1973 State. and Other Per Capita Capita State and All Other . Expenditures Expenditures Expenditures
Governmental General Fund Governmental Governmental General Fund Governmental 1985 1973 1985 1973 1985 1973
Expenditures Expenditures Expenditures Expenditures Expenditures Dollars Dollars Dollars Dollars Dollars Dollars

Education $228.3 $126.7 $101.6 $ 398.4 $221.1 @$177.3 $ 680.6 $270.3 $ 368.1 $146.2 $312.5 $124.1
Highways 21.9 .11.8 10.1 38.2 26.6 .11.6 121.6 48.3 90.7 36.0 31.0 12.3
Public Welfare 49.1 24.01 .25.1 85.7 41.9 43.8 175.8 69.8 99.5 39.1 77.3 30.7
Health and Hospitals 27.4 21.0 6.4 47.8 36.6 11.2 87.6 34.8 67.9 27.0 19.6 7.8
Police Protection 17.1 7.5 9.6 29.8 13.1 16.8 .59.4 23.6 23.2 9.2 29.7 11.8
ire Protection 3.3 0.3 3.0 5.8 0.5 5.2 10.1 4.0 1.0 0.4 9.1 3.6
Sewerage and Sanitation 8.0 7.1 14.0 1.6 .12.4 28.2 11.2 6.3 2.5. 22.0 8.7
Parks and Recreation 8.3 1.4 6.9 14.6 2.4 12.6 30.5 12.1 9.3 3.7 21.2 8.4
Financial Administration 35.1a 29.8B 5.3 6.1.3 52.0 9.2 119.4 47.4 103.0 41.0 16.1 6.4
General Control 17.3 10.1 7.2 30.2 17.6 12.6 53.1 21.1 31.0 12.3 22.2 8.8
Pensions 22.4 19.0b 3.4 35.4 29.4 5.9 108.3 43.0 98.0 38.9 10.3 4.1
Debt Service 78.0 47.2 30.8 136.1 821.4 240.2 95.4 145.3 57.7 94.9 37.7
All Other Operations 46.2 20.4 25.8 80.6 35.6 142.0 56.4 .62.7 24.9 79.3 31.5

TOTAL $562.4 $320.1 $242.3 $ 977.8 $554.8 $422.8 $1,856.8 $737.4 $1,105.0 $438.9 $745.2, $295.9

aincludes $24.7 million State revenue refunds.
bAlso includes FICA.and Health Insurance.

TABLE III

SUMMARY OF PROJECTED 1985 REVENUES AND EXPENDITURES

Millions of Dollars
1973 Dollars 1985 Dollirsa

State Government

General Fund Revenues $381.6 $ 731.6
General Fund Expenditures 438.9 1,105.2
Def icit $ 57.3 $ 373.6

Local Governments

Revenues $118.5 $ 216.5
Expenditures 132.1 430.2

Deficit $ 13.6 213.7

Total State and All Other Governmentsb

Revenues $666.0 $1,262.9
Expenditures 737.4 1,856.8

Def icit $ 71.4 $ 593.9

aAn assumed annual average inflation rate of 8% for the period 1973-1985 was, used to convert 1973 dollars into
1985 dollars for expenditures. It was assumed that the per-capita government revenues would grow by 5.15%
annually 1973-1985.
bIncludes; Federal Revenues to State and Local Governments. Federa I revenues and expenditures were assumed
to be equal.

APPENDIX B SECTION 4

Part V of the Report Entitled "Committee to Investigate
Delaware State Finances"

PART V

PROSPECTS FOR STATE NEEDS AND RESOURCES

This section summarizes the results of the projective survey of

Delaware public expenditures and revenues. The projections were used in

the appraisal, planning and development of the Committee's recommended

tax program.

Major Determinants of State Expenditures.

There are basically. four forces continually at work influencing the

trend in Delaware State expenditures: growth in the State's population and

its composition and location; rising costs of the goods and services

purchased by the State; im rovement in the-quality and scope of public

services; and efficiency in the operations.of State government.,

Based upon the experience of the past, probably the most obvious factor

shaping.the magnitude of public expenditures in Delaware is the underlying

workload or need for public services school and university enrollments,

the proportion of persons living in urban areas, the number of indigent

families, and the like. For example, it is possible to arrive at a first

and minimum approximation of the fiscal requirement for higher education in

Delaware over the next decade by applying.enrollment projections to the

current level of cost per student. The same technique can he applied to

each of the major categories of public services; that is, quantify the

principal indicator of the underlying needs of a specific function, project

its future level, and Apply the current, per-unit cost data. Elsewhere in

this section, the procedure and resulting projection is referred to as the

t1constant cost" model.

in addition to the forces of demographic trends influencing the rate,

of growth of Delaware expenditures, there is another variable of perhaps equal

importance, namely the prices of the goods and services'purchased by the

State. Government purchases of manpower (i.e., personal.services) are

particularly sensitive to pr ice increases. They also constitute the bulk

of governmental budgets. In order to attract the necessary resources into

teaching, for example, teachers' salaries.will.at least have to keep pace

withwage and salary and pension and fringe benefit increases in the Delaware

economy at large. Similarly, thecost of providing public hospital and

welfare care will have.to mirrow the corresponding private cost structure.

Over the last decade, the prices of goods and services purchased by State

and local governments,generally have increased by 40.8
-percent, considerably

above the rate. of increase in overall. consumer prices.

Be cause wage and salary levels in private industry will likely continue

to increase over the next decade, the State of Delaware will be confronted

with steadily rising personnel costs.. Governments, like most private service

occupations (e.g., legal, medical, andthelike), however, cannot readily

offset rising salary costs with offsetting productivity improvements. The.

fact of the matteris that automation and mechanization can have only a

relatively limited impact on the personnel costs of government. Consequently,
if the State of@Delaware is to attract and retain personnel, and to acquire

additional resources as well, it will have to at least match the increases

in the private sector. The projection of expenditures.which provides for.

the inflation factor is termed the "competitive" model.

A third factor accounting for growth in the level of State expenditures

is changes in the scope and quality of public services. Again, experience

suggests that the State can be expected.to,do.more things and do them better

in the future than in the present and recent' past. To illustrate the point,

the.quality of the public educational offering is constantly being improv--d

through better-trained teachers and new programs. Similarly, many other functiona-

fields are adopting higher professional standards for personnel who practice

welfare, health, planning, law enforcement, and recreation. Moreover, there is

ample evidence to support the position that with rising incomes, citizens expect

and demand a higher standard of performance from the public sector. Also,

levels of State expenditures are influenced by the quality and scope of

services adop ted by other states. New school and welfare programs initiated

elsewhere, for example, create expectations and subsequent pressures for

Competitive emulation in Delaware. Thus, while future quality changes in the

performance of public services are difficult to quantify, there,is every

indication they will be positive and.substantial. The expenditure projection

which incorporates changes in the underlying workload, inflation, and some
expansion of the quality and scope of public services is referred'to below as the

"improvement" model.

Finally, the productivity and/or management impro vements in the performance

of public services will work to influence the rate of growth in expenditures.

.The intensive application and more effective utilization of computertechnolog)

to@State governmental operations will serve to provide the same or an improved

level.of certain public services at lower costs.. Similarly, new, integrated

budgetary procedures can provide executive and legislative officials with

better information for planning.program.s and for making choices among the
alternative ways fund's are to be devoted to achieve specified governmental

objectives. Thev can aid the decision-making processes, in finding new methods,

through analysis and evaluation of public programs, of providing public services

better and less expensive ly

To sum, expenditures by the State of Delaware are going to continue to

increase in the decade ahead: by an amount to accommodate demographic changes;

by anamount to improve the services provided by State government; and, by an

amount necessary to match the increases in the costs of the goods and services

purchased by the State. The likely magnitudes of Delaware General Fund

expenditures in.1973 and 1978 are presented in the next section.

Expenditure Projections

Table 1 summarizes four series or "models" of projections of State General

Fund expenditures in the fiscal years 1973 and 19781. All four models are based

on the same assumptions regarding overall prosperity in the national economy,

the state ofthe.international situation, and the division of functions between

Stateand local governments., They differ.only as to the relative.importance

attached to the major determinants of expenditure levels.

The first series, designated the "Constant.Cos,t" model, indicates the

1973 and 1978 levels of State General Fund expenditures required,to

accommodate change in what has been earlier referred to as the underlying

workload. Thus, for example, the primary determinant of public education,

costs is pupil enrollment. The fiscal requirement for State support of

public elementary and secondary school education over thenext decade is

determined in this model by applying projections of the number of school,,

children to the current level of cost per pupil. The same technique ha s

been applied to each of the.major.functional categories of public services;

that is, quantify the principal indicator of the. underlying needs of a

specific function, pro]ect its futurellevel, and apply the current per unit

,expenditure data.

In the "Constant Cost" model, no account is taken of probable price

changes or of probable improvements in the standards and scope of existing

public service programs. In the context of an expanding nationaland State

economy, however, experience indicates.that constant per unit costs canbe

maintained only b y re ducing the quality and/or quantity of existing programs.

Because of the unlikelihood of this occuring, the "Constant Cost" projections

are considered highly unrealistic. It should be noted, nevertheless, thAt

even under these highly unrealistic assumptions, the level of State General

.Fund expenditures will increase over the decade by over 40 percent.

TABLE 1

70 El 19731 AND 1978.
PROJE T -@,,'S OF D -AWARE GENERAL FUND MXPENDITURES
(In thousands of dollars)

Year and "It.,Iodel" General Fund Expenditures

1967/1968 Actual 158,875
1973/1974: a
I. Constant Cost 198,665
I!. Competitiveb 230,307
III. Improvemente i 266198@
IV. Continuation 20
d 2 Y050
1977/1978:
ba
I. Constant Cost 242,590
II. Competitive 326,021
III. Improvementc 438,145
. d
IV. Continuation 283,420

aExpenditure projections reflect only the, increase in underlying-workload:
(i) Elementary and Secondary Education - school enrollments
(ii) Higher Education - student enrollment
(iii) Health and Welfare - public.assistance cases
(iv) Highways - miles of roads and highways
(v) Pension and Social Security State employees
(vi) Other - population

.b
Projections reflect underlying workload and price increases of 3 per cent
.per,year.
cCompetitive model and an allowance for a 3 per cent annual improvement in
the scope and quality of public services.

d
The level of expenditures which'would result if expenditures increased
at the same average annual rate between 1969and 1978 as they did between..
1964 and 1968 (increase equals $12.7 million annually).

The "Competitive" modelgives the probable magnitudes of outlays on

General Fund programs of current quality, but adjusted to reflect-both

'an 4,Mr-1 ving workload factors and the effects of inf lation on public .service

costs. The model-reflects a 3 percent average annual inflationary
factor. The "Competitive" model projections are, therefore, considered,

the minai@=xm" level of General Fund expenditures. which is at all, likely.

In all probability, price level changes will fluctuate between 2 per cent

and 4 per cent over the.next decade. It is anticipated that the inflation

experienced (over 4 per cent) in the last year will,not belallowed to,

persist over long periods of time. On thelother hand, if State government

is to acquire resources, particularly manpower., it will have to at least

match.the wage,and salary increases in the private sector., Moreover,,.it may

even have to do somewhat better than matching ifit is to attract additional

resources into government employment,

Increases in State government outlays have increased.in the recent.

past by more than population (workload).and.price changes alone can explain.

A majorcontributing factor has.been.improvement in the scope and quality

of public services. This expansion is related to the growth of the economy.

in various ways. In the first place, some public services,are necessary

complements to the growth of the private sector (e.g., enrichment of

educational programs to satisfy the scientific and technical requirements

of modern industry)."Alsoi, with rising personal incomes, a higher standard

of performance is expected from the public sector. Just as the consumer

with rising.income 6hifts'his pattern of spendingto more and better quality

private goods, similarly voters .with rising incomes demandmore and better

quality public services. To acc odate-this factor., a third set of

projections has been prepared. They are designated in.Table 1 as the

"-Improvement" model. They allow for expansion in the underlying workload.r,

7rice an6 some improvement in the scope and quality of public
services. Because the pace of program improvement is subiect to discretionarv
control, an ann ual, uniform 3.percent improvement factor has been employed.
-i-e this tr@ay not accurately reflect year-to-year imprcverinents it seems a

:@-easonable Tr-e-4,rnitude over the long ran. As indicated, the "Improvement"

model -,rojections build on the "Competitive" Taodel, which, in turn., has the

"Constant Cost" model as a benchmark.

Finally, the "Continuation" model indicates the level of General.

F@d expenditures which would result if outlays increased between now and

1978 at the s.`1M annual average rate as they did over the last five years,

i964-1968.

Revenue Projections

The best "fit", of aggregate General Fund.revenue projections to actual

total collections is obtained by the use of a ti:-ae series employing the

most recent five-year base peri od. In general, this was the method

employed in arriving at the projections of. General Fund

revenues summarized in Table 2. Three,exceptions to this rule should,

however, be mentioned. To minimize cyclical fluctuations in receipts from

the inherita nee and estate tax and in mercantile license fees, a ten-year

base period was employed. Also, because of the recent-enactment of the
real estate transfer tax (1966),, a three-year base period, 19667.68,,was

used in projecting receipts from this source over the next decade.

100,

Table 2 shows that the natural or "automatic" increase in tax revonues

that takes place as the economy of the State of Delaware grows,will account

.,or more than a 75 per cent increase ($119 million) in General Pund receints

over. the next decade. It should be mentioned again that these projections

assume no spec.ific discretionary changes in the existingrevenue structure;

tna-@ new @,ax sources, no increaSes in rates 3n cxi@3-zir4@ !@,,v:;*,...:@&)

zi-jas of tax bases, and the like.

TABLE 2

OF IE G MCERkL FUND REEV!2@IJES , PLND 1`178 AISSUMPM
1973
CTU"7GE IN TAX RATES, USAGE, OR OTHEt", PROV-1.:@II&Nrl'
(In thousands of dollars)

F i s c al Year Revenue

19'6 7,119 68 Actual 156,707

217,337
p-I i 76,567

Expenditure-Revenue Imbalances

Table bri---s together the projections of expendi@'._I::C@-,

nagn'tudes uf thic. c @)r_-,:
for the General `@Luid ndicating the m L

.or d depending upon the "model" selection, . %ne
e'icits. As indicated,

estimated 3eneral Fw-id exj.@enditure-reve Inue imbalance raraj,-es in lq-,@/P_

a surplus of $18-7 million to a deficit of $49.7 million; the

imbalances in 197(ho, rartce from a surplus of approximat,21Y :flillion

Ft deficit f 1 (7' ) 21 mill iOLj

TABLE 3

PROJECTIONS OF GENERAL MID EXPENDITURE-REVENUE IMBATANCES,
1973 AND 1978, ASSUMING NO STRUCTURAL ADJUSTM!ENTS IN THE TAX SYSTEM
(In thousands of dollars)

- - ----------- -

'JUX"Pl-as (Defici-L.')

Constant Cost
,L _L Competi.tive "--(0)
!I!. L-.-,proveinent
0,@ L
IV. Continuation (2,713)

19771/1978:
1. Constant Cost 33,977
II. Competitive (49,454)
III. Improvement (161,578)
IV. Continuation (6,853)

it is the jud@gment of the Committee that the "most likely" General

iund projection of expenditure-revenue imbalance is given by the

"Improvement" model, which takes into account a modest improvement 0
per cent) in the scope and quality of.General Fund services coupled with a
small (3 per cent) rise in the price level. Under these assumptions, the
revr--nue deficier .cy (gap) will be'approximately $50 million,in 1973'/74 and

09. million in 1977/78. In other words, over the next decade, structural

adjustments are required in the existing tax system to yield some 58 per

cent more revenue over the next decade if the General Fund is to achieve

.a-balanced budget position in the target year, 1977-78. Table.4 summarizes

the projected need for additional General
Fund revenue.,*

PROJECTED NEED FOR ADDITIONAL GENERAL FUND REVENUEY 1973-AND 1978,.
(In thousands of doll 8)

'97/76
19-13/74

Program Expenditures* 266,989 438,145

Less:

Revenues Under Current Laws 217.,337 276,56

Equals:

Additional Revenue Requirement 49,65z .161,578

te
*.".Most likely projection: Improvement Model, Table 1.

No allowance, however., has been made in the,projections of expenditure-

revenue imbalances for an "appropriate" or "safe" level of General Fund

current cash surplus. The General Fund currently faces the coming fiscal

year with essentially a zero cash balance. On the assumption that a

current cash balance Of 5-7 per cent of revenue is desirable and necessary

to match income with outgo in any given fiscal year, an additional.$13 million
of revenue will be required in 1973/ 74 and $22 millionln 1977/78.

In total, therefore, additional revenue of [email protected] be needed
in 1977/78 to finance General Fund programs, to re-establish a reasonable

cash balance, and to provide an adequate cash flow. With these, objectives

,in mind and.considering certain other budget deficienciesin the current

year, the Committee settled on a tax program, to raise approximately $30,

million in the next.fiscal year and which-, with subsequent year revenues

responding to econom. ic growth, will generate the required yields to accommodate

a balanced General Fund budget: in 1977/78.

APPENDIX B SECTION 5

Extracts From the Minutes of the July 30, 1975
Meeting oF the Delaware Tomorrow Commission

Extracts From the.Ninutes of the July 30, 1975
Meeting of the Delaware Tomorrow Commission

Mr. Bradford said that he thinks this projection of $600 million

deficit by 1935 is as good as the assumption. If a 5% deficit had shown, it
would not have made much impact, but (out of the calculations came the fact
that the deficit represented 50% of the revenues estimate) with such a figure,

it is a guideline that indicates that somethingwill have to be done either in

curbing expenditure or by increasing the revenues. The order of figures is

significant and of a serious magnitude-

Mr. Biondi commented that the magnitude of this deficit indicates that

when the Commission discusses its report and the question of growth-rate comes.uD,

the Commission should indicate two things: al,l sectors of the economy in the

State are goinq to have to look forward to paying increased taxes per capita--

substantially so in the next ten years--and it has reached a point where we

cannot afford some of the luxury, inefficiencies and waste in State government.

It mav indicate that government streamlininq may have to be accomplished; and

the way we render services will have to be examined. Ten years from now, we

will not be able to operate under the same structure as we are o perating now.
In terms of the Delaware family unit, this also means that in the concept of

the qualitv of life, the standards of living will deteriorate significantly--

about 50%'. It was noted that the cost of-State government between 1969 and

1973 increased tremendouslY, but thisWas due to all the new programs that

were instituted, such as the oollution Protection, etc., while this 500.
increase between 10,73 and 1935 is entirely without an'Y new programs. It was

said that even the biggest industries are "tightening,their belts", such as

duPont for instance, and there is no reason why State government could not do.

.the same. It was agreed that the area where this "tightening up" should be

done is in the sector of public and higher education, whichentails the largest

part of the State budget (51%).

Unless someone undertakes the problem from this point forward.to recommend

broad scale government reorganization and governmental economy, the Governor

who will be elected in 1934 will look like Mayor Beame.

Representative Seibel commented that there are too many layers of

government for the 565,000 population. There are,also things that coul d be

done at the regional level.

.1-1r. Biondi said lie does not look at these fi,ndings in a negative way.

Considering the 1935 population projection fiqure of 700,000 and the projected

409,000 jobs., he thinks this is necessary a*nd desirable. Looking at these

figures as a base, and continuing to re-evaluate them-what these figures show
is that we cannot go on in the next ten years thinking that ev erything wil 1

work itself out without any dramatic effect on the.taxoayer. As the State

growsl economies will have to be realized or the increases in taxes which will

be necessary will kill off the mini.mun, degree of growth.

Mr. Wiener raised this question: is the high cost of government projected

by 1935 a direct result of the population increase or is it because the

standards of the quality of life that we have set are too high and, therefore,

we cannot pay for them. If we want,these standards, we will have to pay

for them.

Chairman Biondi asked what the Commission members felt about the

problem. Mr. Folsom said that the Commission is not the-bodY that will be

able to do anythinq about this problem. It,is basicallv a nolitical nroblem.

The politicians will spend as mucK money to buy the services that the.people

are crying for and will collect as.much tax as possible. The Commission will

do well to point out the trend and the maqnitude of the problem, it will be
to no avail to cut back on education: on overhead, that we should combine
the State and county police because hese are political decisions brought

by the pressure of the voters.

Dr. Brucker commented that if the solutions to the probl,ems are in the

hands of the politicians, and that the politicians react to the public's

demands then it is up to the Commission to present the facts to the public.

Steve Chamberlin commented that the magnitude of the cost increase is

not a major factor that has a direct relationship to the population increase.

It was further noted that the cost increase was due to inflation, the

types of services the people are receiving, the increase in the services by

certain segments of education.

Dr. Brucker mentioned that it is not only an inflation factor, but
the fact that the.expen-ditures are going to inflate faster thanthe 'revenues.

I.4e.are also discoverinq that the cost of service oriented operation Will qo

up much quicker than the cost of manufacturing. This is a trend in the

economy, the productivity increases are not there in the social services

delivery.

Jay Cooperson commented that the quality of life we have comes out of our

per sonal dollars. There are many, things that the State government spends on

,to imorove the quality of life. There may be some serious questions asked

as to what areas we should spend our tax dollars on. How much are we willing

to pay for pollution control, water quality, etc. If the State government

i.s going-to provide for sewer plants, for instance, it will provide jobs,

it will provide for a distinct modifier. Maybe there should be some

di.stinction as to where the government should spend its money.
Th e Commission arrived at.this general consensus:
.1. The State faces a problem: it will take a substantial amount of

dolla rs more to run State government and provide services to the people, by

1985.

2. The rate.of cost increase (50'Z by 1985) cannot be attributed to the

increase in population.

.3. The rate of cost increase is due mostly because the revenue grows at a
different-rate than that of expenditure because of the nature of certain

revenues.

4. The expenditure increase is function.of inflation. State government

is in the service rendering business and increase in.productivity, in the

service area, means a decrease in the oual,itv of the services orovided.

5. In order to combat these problems, State government will have.to give

a serious look at more efficient ways of delivery system.

This information has to be disseminated to the public.

If the types of-revenues are.not going to.be adequate to handle our

expenditures, then the Commi.ssion should make the politicians aware of the fact

that some alternate ways should be found to bring in revenues. Maybe the total

funding base would have to be reconsidered--not onlv at the State level, but at

the county and local level.

APPENDIX C

ECONOMIC DEVELOPMENT COMMITTEE

Summary.

Since 1970, several developments have combined to change the "economic

climate" in Delaware. The need to analyze and understand this change has been

a major concern of the Commission -- a policy which would recreate a desirable

Ileconomic climate".

I. What are the major post-1970 developments which changed the "economic climatell

in Delaware?

A. The high rate of population and employment growth in Delaware between

1950 and 1970 has declined sharply since 1970.

1. Between 1950-1,970, Delaware was one of the fastest growing areas

in the U. S. east of the Mississippi.

a. Delaware was growing at twice the national rate of growth.

b.. The growth resulted in a heavy in-migration into Delaware and

the population growth was matched by growth in job opportunities.

c.. This rate of growthin Delaware was remarkable in view of the

declining population and jobs in two significant areas of the

State -- Wilmington and Sussex County.

2. Since 1970, the rate of growth in the State has dropped to the national

growth rate, and the national rate of growth has been lower since 1970

than in the 1950-.1970 period.

a. Delaware is still growing, but the drop in the rate of growth

has been dramatic.

b. T.he national growth rate has declined largely because.of the

drop in the U. S. birth rate.

c. The Delaware growth rate ha,s declined both because of the

decline in the birth rate and a very sharp decline in the rate

of in-migration.

3. Between 1950 and 1970, unemployment in Delaware was below the,

national average -- g enerally below 4/00. During 1975, the un.employ-

ment rate in Delaware has gone up sharply to over 10%, rising above

the national average which is in excess of 9% and which.is at,the

highest rate in over 30 years!

(See Part I of Report for detailed discussion)

B. The fiscal burden of State services has.increased substantially in,

recent years.

1. Public borrowing to finance government services has expanded rapidly.

a. The State's indebtedness grew from zero i n 1945 to over $500

million in 1975.

City and county debt also increased substantially during this

period.

c. The cost of State borrowing (debt service for interest and

amortization) has caused a significant increase in current

revenue requirements.

2. Deferred expenses must now be met out of current revenue.

a. The cost of pensions for State employees has risen from 3% of

payroll in 1950 to 13%' of total general fund payroll in Fiscal
Year 1976 (partly to cover unfunded past service liabilities in
excess of 14200,000,000 over a forty-year period beginning with

Fiscal Year 1976).

b. Similar pension cost increases are in prospect at the county and

municipal levels of government.

3. The rapid growth of the State's population, the ex1pansion in the

government services, and the sharp increase in the cost of con-

struction have all r esulted in expanded capital outlavs to provide

for schools, highways, hospitals, courts, prisons and other

facilities.

4. Since 196.9, individual income and capital gains tax rates have

been increased substantiallv.

a. Delaware has lost a competitive advantage over other states

it is no longer a high income/low tax State.

b. Its total State and local tax revenues, on a per ca.Pita income

basis, are about average for all states,-wher@as ten,years ago

we were the leader.

(See Report of Cost of Government Committee
and Part II of this Report)

C. Other states have become.more attractive to new industry.

1. Plany states have created effective development departments to seek

out new business and to.assist them in their decision, making..

a. Government zoning and related development procedures have been

streamlined.

b. State educational. agencies have been effectively utilized to

retrain local manpower for new business ventures moving into

the states.

c. Tax incentives and development bond inducements have been

expanded.

d. Both public and private leaders have united to promote the

development of their states.

2. Delaware can no longer expect to grow rapidl@y simply because of its
location, its low tax base, and its large open spaces.

3. The total cost of new industrial construction in Delaware has

become expensive.

4. Housing costs for in-migrants have risen sharply and the older

housina stock in 'Wilmington has deteriorated badly.

(See Part III of Report)

D. The economic vitality of Delaware has declined markedly.

1. Delaware has fallen behind in its highway program s.

a. New highways have not kept pace with expanding population and

transportation demands.

b. Existing highways have not been fully maintained.

c. Traffic congestion has become acute in several areas of the

state.

Oote: The recent passage of a $42 million bond bill
shows a recognition of this problem)

2. The railroad network is deteriorating.

a. Freight service in the main north/south corridor has declined

and the road bed is deteriorating.

b. The rail svstem south of the Canal has become critically

undermaintained.

3. The City of 14ilmington has continued to suffer from problems

similar to those of other urban centers in the United States.

A
a. Blighteu housing and the crime rate are serious problems.
b. The quality of public education needs to be substantially

improved.

c. There has been a general exodus of residents and business from

the 'City to the suburbs.
4. Several areas of the State have been faced with shortages in water
and sewer facilities and air pollution problems have become a major

issue north of Wilmington.

(See Part IV of Report)

E. Leaders in govern ent, business, labor and other groups have publicly

disagreed on State tax and some environmental and developmental

policies.

1. Business leaders no longer promote Delaware as "good for business".
a. New business candidates are not encouraged by many Delaware

business leaders.

b. The Wilmington wage tax has deterred new business from locating

in the City.
c. Alternate sources of revenue must be judged for their equity and
effectiveness', includ*ing the relative burden of taxation on

manufacturing and business in the State.

d. The State capital gains tax rate has become counter-productive.

2. Delaware has.developed an anti-business image as compared to its past

reputation as the result of such things as the 1971 Coastal Zone Act,

the proposed excise tax on gasoline production, and the utility rate

excise tax.

3. Delaware has yet to develop a full ran ge of programs which offer its

citizens hope that these critical situations will be reversed in the

foreseeable future.

(See Part V of Report)

II. What are the present economic strengths upon which Delaware can build?

A. Its. geographic location.

1. Delaware is strategically-located in the nort heast metropolitan

corridor with favorable waterways for transportation and still has

a substantial amount of land and waterways which coul d be used for

future growth.
2. Delaware has ahigh level of land devoted to agriculture; and, with

the nation's food needs increasing, the favorable location of

Delaware's agricultural industry should permit it to continue

to make a major contri,bution to the State's economy.

3. The recreation and tourism industries are important and could well

be a growing activity. In addition, Delaware's historic and cultural

attractions should be recognized as another major economic asset.

.B. The major industries in Delaware remain in the growth sectors of the

economy.

1. The chemical, automotive, and distribution industries have been

growing above the national average over the past 20 years and will

probably continue to expand at a reasonable rate.

2. These industries pay better than average wages.

3. With the exception of the auto industry, these industries have not

been subject to significant swings in cyclical employment.

C. Our analXsis of job growth over the next ten years leads us to assume

a growth rate Uual to one-half experienced in the 1950-1970 period.

This would provide as many new jobs over the next ten years as our

forecast increase in work force.

The new jobs developed by present industry may not match.the skills

of the resident work force, therefore, it would appear tha t Delaware

would need to be selective in attracting new industry to provide

balanced employment opportunities for all its citizens, especially

the unemployed and underemployed.

D. In the last tenyears, Delaware has substantially improved its education

system to provide better technical training at the secondary levels and

It has greatlZ expanded its community and technical college network.

1. Greater efforts need-to be made to relate this educational system

to economic opportunities within the State; and

2. To make use of this system to train and retrain resident citizens for

opportunities which may open up with new business enterprise.
E. Except.for the indicated problems in rail service, highway bottlenecks
and localized shorta2es of water and sewer facilities, Delaware has a
2reat deal to offer new businesses in the form of available land,

waterways, utilities and manpower.

III. Conclusion

A. .14hile the problems in Delaware are serious and challenging, it is the
consensus of the Economi c Development Committee that Delaware can have

a healt@yeconomic and social future providing: (1) that the State can

obtain general agreement on goals for population and employment growth;
and (2) that it is willing to make the changes required to correct some
of the problems outli'ned above.

B. In order to establish reasonable plans for future population type of

growth rate in Delaware, further information should be developed as to

the impact of growth. We need more informat ion on the followin2

questions:

1. How much of the present debt and the related debt service was

incurred to finance the post-war growth in the State?

2. Are there latent costs of that growth which have not-yet appeared

in the current expense budget of the State, such as, some of the
cost needed to bring Delaware's highway system up to date or to

expand hospitals and prisons?

3. Will future population growth in the State cost relatively more

in relation to per capita income than the cost of our recent

growth? Could the cost of this growth be minimized by effective

planning?

4. 1.4hat would be the relative benefits and liabilities of bringing

into Delaware (and into different locations within Delaware)

different types of businesses with their varying service require-

ments, job requirements, income Contributions, environmental impact

and related considerations?

C. The Delaware Tomorrow Commission should establish population and employ

ment growth goals considerina such thin2s as internal population growth

vs. in-migration, type and amount of new businesses desired, and a_fore-

cast of the resulting changes in State income and expenses.

This StUdy has identified several unfavorable economic and social trends

in Delaware today which call for action. In addition, the Economic

Development Committee believes some continued employment growth within

the State is not only necessary but desirable.

To accomplish these objectives we recomend the following programs

which are presented in more detail in the following sections of this

report.

1. It is recommended that the Governor develop an effective State

system to:

a. Coordinate all aspects of the economic development programs

set forth in this report.

b. Reinforce development efforts, consistent with these proposals,

of organizations in the private sector such.as commercial-

industrial brokers and developers, chambers of commerce, and

util ities.

c. Report annually the results attained.

2. The Governor and Legislature should require an in-depth evaluation

of Delaware's career and. vocational education programs and State-

supported higher educat.ion, to determine how student interests and

job opportunities can be better matched.

3. To assist in attracting desirable companies to Delaware we should:

a. Provide more complete and better organized information on such

things as site availability, manpower, wage rates, etc.

b. Expand the utilization of State general obligation industrial

development bonds and the development of industrial parks.

c. Delaware's banks should be encouraged to give greater lending

support to business and industry.

4. The Delmarva Advisory Council is an effective peninsula-wide

regional economic development body formed by the States of Delaware,

Maryland and Virginia, which should be given the necessary financial

support, particularly for developmentof the southern counties.

5. The State should study a revenue-sharing formula for commercial-

industrial property taxes, so that all jurisdictions of our small

State will share the taxes generated.

6. State and/or local programs for improved water and sewer systems and

better housing must be accelerated, as these needs are unmet for the

present.population and also are vital to further economic development.

.The State government, in cooperation with Delaware's utility companies,

must develop a plan.for meeting long-term and short-term energy needs
of business and industry, including the development of.new energy

sources and the conservation of present energy.

7. We should encourage concentration of employment and housing at

sufficiently high densities that mass transit will be practical

and profitable in the future. The I.-95/Route 40 corridor in New

Castle Countv is one of Delaware's best future industrial areas,

and planning for the area should recognize this potential through.

proper land use allocation, access, and services for industry.

3. The State must immediately adopt a plan for continuation of and

improvement of inter-state rail service.

9. Six actions are recommended to improve the.economic and social

environment within the City of Wilmington, which is a major area

of concern within the State. (See Part IV)

10. Delaware must improve the State's business climate by making such

changes as:

a. By developing a comprehensive State-wide land use plan to remove

the inequities of the Coast al Zone Act. The Coastal Zone Act

was passed in lieu of a more complex Coastal Zone Act which was

proposed earlier but received little support. In reality, both

goals are an attempt to begin land use planning. The Committee

has concluded that the time has come to replace the initial

Coastal Zone.Act with a Comprehensive State-wide Land Use Plan-

ning Act. The present regulationssh ould be used intact as interim

guidelines to govern and develop the coastal zone until the new

land use management regulations are complete and accurate. At

that time, the Comprehensive State-wide Land Use Management Plan
would supersedethe Coastal.Zone Act and other,land use control
legislation presently administered by the State.

b. Bringing the personal income tax rates, including capital

gains, in line with those of the more progressive states.

c. Establishing sound fiscal policies by a combination of strearl-

lining governmental functions and establishing an equitable and

adequate tax structure to provide the funds required.

11. The State should establish a program to participate in the Atlantic

offshore drilling for oil and should study the development of deep-

water terminals in such a way as to maximize the future economic

benefits while minimizing any detrimental impact.

PART I

Change in Delaware"s Rate of Population and Employment Growth

@etween 1950 and 1970, Delaware experi enced one of the fastest population

growths of any state cast of the II'lississippi. This growth resulted from many

favorable factors - geographic location, the industrial base in chemicals, and

assembly and distribution services, the low tax rates, stable government,

absence of urban blight, etc. The rate of growth has changed dramatically since

1970 for many reasons which will be covered in this report. The purpose of this

section is to estimate the rate of gro@,; th in the next ten years, if no significant

changes are made in the "economic climate" of Delaware.

1. The rate of population growth in Delaware is-expected to slow during the

next ten years, but by 1935 population may reach 700,000. This would be an

increase of 101,000 over 1975 -- an increase of 17 percent in ten years. The

increase would consist of 49,000 natural growth (births over deaths) and

52,000 net in-migration. This projection is based on 1970 census data and

the total may be on the high side in view of the sharp drop in birth rate

since 1970.

This is lower than the population growth rate of 23 percent in the ten

years,1960-1970,,but is about the same increase in number of people

(101,000 for 1975-1985 vs. 102,000 for 1960-1970).

The ratio of in-migration to natural growth is lowering.

The birth rate itself has been dropping dramatically.both in Delaware

the rest of the United States.

The size of the family is dropping with the drop in the birth rate.

Smaller family size means a need for more dwelling units for 100,000 of

Population and more women entering t he labor market.

The rate of actual growth (1970 through 1974) corresponds with our

estimate for 1975-1985.

The growth in Delaware's labor force will be more rapid between 1975 and

1935 than the growth in population for two reasons:

.a. The number of young people born during the post-war population boom now

.are entering the labor force faster than the present growth in population

and faster than the labor force dropouts from retirement, death, etc.

The labor force will tend to be somewhat younger in the next ten years.

Those who will be entering thelabor force in the next ten years have

already been born (i.e., the growth in the labor force up to 1985 is not

affected by the recent drop in the birth rate).

b. A higher percentage of females will be seeking empl-oyment as the result

of the shifting size of the family (see above)., The labor force is

estimated to increase by 54,000 in the 12 years between 197.3 and.1985

from 260,000 in 1973 to 314,000 in 1935. Almost half of the increase, or

25,000, will come from resident population growth and more women in the

labor market; the other 29,000 increase must come from a net in-migration

of job seekers.

3. The rate of growth in employment opportunities is projected to-keep pace

with growth in the resident labor force.

This projection is based on actual growth in employment between 1953

and 1973.

But it assumes that there would be no greater rate of influx of new

business and industry to Delawarein the next ten years than occurred.in

the last 20 years.

It assumes that the rate of,growth in net new jobs will be only half

the rate of increase of the last twenty years: 15') in the 1975 1985

period vs. 305% in the 1952 1973 period.

It excludes consideration of offshore drillina for oil and gas, and/or

building of a deepwater port, each with onshore supp ort activities.

It assumes a slowdown in the growth rate,of retail trade and government.
employment (including education jobs).

It may underestimate the net growth rate in jobs since there is little

likelihood of significant further declines in agriculture, wood products,

leather, and apparel, such as occurred in the last 20 years, and.our other

rlajor employers now in the State have been in growth sectors of the U. S.

econ0mv.

It does assume the State Division of Economic Development will match

neighboring states.in its efforts and effecti veness, in attracting new

businesses and industries to Delaware.

If the number of jobs grows only half as fast in the next ten years
by 15 percent vs. 30 percent in the 1952 - 1973 period the number of

jobs in 1935 (excluding military) would seen, to corresDond to the projected

increase in the labor force (320,000 in 1985):

254,000 - 1973 jobs

309,000 - .1935 jobs

Unemployment would be estimated at the 1970//3 level (about 4%' or

12,000) under these projections. These figures are not intended to be

exact; thev are a rouah order of magnitude. However, if the unemployment

@rate stays at or above the national level,.the estimated in-migrat,ion rate

would be lower.

UnemPlovment in Delaware normally has been under 10,,000 workers,

but currently has soared to 25. 9000 (10.2'0' of the labor force). The

auto assembly, operating and construction areas have been hardest hit.

The auto plants' shutdown has impacts on the other industries-forcing

them to employ workers on a reduced basis where the loss in income is

not covered by supplemental pay. The State's economy may be too dependent

on the auto industry. Although Dela0are's chemical industry is more

stable, due to its administrative emphasis rather than production, it,

too, is a-dominant employer on which the State should not remain depen-

dent.

There are also some reasons to believe that underemployment is a

sizeable problem. In relation to education and age levels, many Delawareans

do not seem to be receiving the incomes as well-balanced economy should

r)rovide. It appears, particularly in K ent and Sussex counties, that

people are working in jobs for which the pay is less than their training

and experience qualify them. Therefore, the.State needs more diversity

in the types of industry and jobs to overcome underemployment and un-.

employment.

Although these problems are somewhat a result of the current business

recession, some Delaware businesses can be expected to close down permanently

in years ahead as have others in the past.2,0 years. Therefore, existing

industries need to be encouraged in their expansion and new companies must be

continuously brought into our State to provide employment for the expected

natural grovith of our labor force., and these new enterprises need to be

carefully selected to balance employment opportunities inthe State.

A minority within the Committee felt the preceding employment projections

based on present industry and other types of State employment were too

Optimistic. Their lower job growth rate.judgement was based on the declining

national birth rate, lets labor mobility, and.pessinism over the national

energy situation in the next ten years. However, if net new jobs should not

develop as rapidly as forecast,.only the in-migration would be lower.

The whole Committee felt that, as a minimum and subject to the assumptions

stated above, the growth in net new jobs would approximate the net growth in the

labor force from the resident population.-
The Committee recognIzes the difficulty of forecasting precise growth data,

since some of the factors that contributed to rapid economic growth in past

decades may be less operative in the next ten years and some deterrents have

aDDeared: rail service is,threatened; highway and mass transitneeds are unmet;
na't'ural gas is in critical shortage; water is a problem in sections of northern

New Castle County, in Kent County north of Dover, and in areas of Sussex County;

.sewer systems are inadequate in parts of.northern New Castle County; air quality

limitations exist north from Wilmington; our State appears to have developed

anti-industry images; the State's economic development program may not be keeping

pace with those of surrounding states; and the worst slump in the Nation's post-

World War II economy is upon us. On the other hand, Delaware's location, land

resources, availability of labor and training. facilities, corporate tax rates,

and availability of financi:ng for commercial-industrial expansion cont inue to be

favorable.

To suggest employment projections lower than the majority's ten year

forecast given above would indicate a Delaware growth'rate slower than the

projected national_ average, whereas Delaware has exceeded the national average

for decades. The Committee majority... though uneasy about it ... therefore adopts

the above projections.

PART II

Changes in Delaware's Status'
As a High Income - Low Tax State

nelaware's reputation for high per capita income is misleading. Since

1950 Delaware generally has ranked in the top five or six states in per capita

income, often lst, 2nd, or 3rd in the 1950's and early 60's. In the late 60's

the State's ranking slumped (to a low of llth in 1970) but has recovered to

fourth in the Nation. in calendar year 1973. Delaware's ranking was misinterpreted

for these reasons:

I., Personal income.in Delaware has not been distributed.as evenly as the Nation's,

being concentrated disproportionately in its relative few high income People;

for example, in the 1950's Delaware was reported to have had more annual

millionaires than any-state excep t New York. If we look at a better measure
of average income, median family income, which means half of the Stat e's

families have income above this figure and half below it, we find that 12

states ... not just two or three ... were ahead of Delaware in the 1960 census

and 13 in the 1970 census. Using this measure, Delaware is not in the top

20 percent of all states.

2. The c ombined State and local government taxes in Delaware now are as high

per capita as most other states. This.was not.true in the 1950's.

3. The cost-of-livingin the Philadelphia region, by which we are influenced,

is about two Percent higher than the average for all-United States urban

areas.

4. If I)elaware's per capita income is adjusted to reflect the higher State and

local taxes and cost-of-living, Delaware's per capita income falls from Ill

Percent of the Nation's average to about 105 percent.,

5. Delaware's high per capita income statistic mainly reflects New Castle

County's condition where two-thirds of the State's people are concentrated,

Particularly.highAncome people.. Kent and S ussex counties have been

considerably below New Castle County in income, although a bit above other.

rural counties on the Delmarva Peninsula. The 1970 census gives Kent's

median family income as $3,503 and Sussex's as.S8,258, compared to New

rastle's @10,939.

PART III

Actions Needed to Make Delaware More Competitive
With Other States.

Delaware@is largely at the mercy of external forces -- regional, national,

and international -- in terms of its level of growth and development. In every

asnect of Delaware's government and educational system, we must create "quick-

response" capability -- enabling the State to act and/or react with the greatest

speed as events and trends unfold.

State and local governments in Delaware must streamline their exceedingly

cumbersome and time-consuming regulatory and review processes (zoning, subdivision

control, environmental control, etc.), parts of which are unnecessary and dis-

courage not only the worst'companies but the best as well and place Delaware at

a competit@ive disadvantage.

Industry considering locating in Delaware needs detailed information by

regional area of industrial site availability, employr nent environment, manpower

availabflity and skill, wage rates, training facilities, etc. Therefore, a single

State agency should have a complete summary of this t pe of information, well
Y

organi:zed, up-to-date, and readily available for interested industries.

1) It is recommended that one organization within the State be organized
and staffed adeouately to: a) Coordinate all aspects Of tTle ec-o-n-om-ic
develooment programs set forth in this report; b) reinforce developmen t
efforts, consistent with these proposals of organizaTirons in the private
sector such as commercial-industrial brHers and developers, chambers of
commerce, and utilities; and- c) report annuaTTY-The results attained.

In order to maintain the required level of job opportunities and the general
economic health of the State, a vastly improved State economic development program'

.is needed. The State should accept major responsibility for economic development

efforts, working close-Ty with local leaders, agencies and groups. In order to

establish and improve an edge over competing states, Delaware must be more

aggressive in selectively recruiting target business and industries-and provide

a liquick-response" when opportunities knock. The Governor's personal leadership

and involvement is essential in implementing a strong State economic development

program.

The State Division of Economic Development should be the vehicle for providing

the neceSsary functions and given the capability to devise a full-range of pro-

grams needed to achieve the high level of economic developmpnt on which Delaware's

citizenry and governments depend. These should include the "Target Industries

Program" for selective recruitment of industries best suited to Delaware, financial

aid for expanding tourism and recreation facilities, a program to attract foreign

firms to locate manufacturing and distribution facilities in Delaware, and ability

to expedite with local governments.the needed permit requirements..

2) Career education in Delaware's public schools seems to be making progress.

Howevpr, some students still are trained for a narrowspecific job and

others trained so generally that it's no training. In most cases when

the student is unable to obtain or loses a job, fie must be completely

retrained for another job.

In all occupational training programs more emphasis is needed on

."job clusters" or-"job ladders" that teach basic skill or operational

concepts applicable to many jobs. Taking another job becomes only a new

application of these concepts rather than complete retraining. Emphasis

on "continuing education" programs throughout life must be made possible.

Similarly, students and workers should be trained for opportunities in

the multistate job market -- not in Delaware's job market alone.

Delaware Technical and Community College and our Vo-Tech Centers

must become more flex.ible able torespond to immediate.or short-term

training needs as well as to long-term. More jobs will require post

high school technical or service degrees. For the next ten years we

th moderate skill requirements.
should attempt to attract employers wiU

while simultaneously changing our vocational training in the direction

of job clusters or ladders.

The Governor and Legislature should require an in-depth evaluation of

Delawarels career and vocational education programs and State-supported higher

education, to determine how student interests and job opportunities can be better

matched.

The percentages of Delaware high school vocational education graduates

availab le for work who become emnloyed full-time in jobs for which they were
trained (or related jobs) have been 86.3 (1969), 63.7 (1970), 76.6 (1971), 90.6

(1972), and 75.2 (.1973). 11hat difficulties do the other 10, 15 or often 25-30

percent, have in obtaining, keeping and advancing in jobs unrelated to their

,training? Is. it by choice or necessity that they seek other work? Can we do better

in matching training to job openings?

Employment service files provide evidence of softness in the Delaware
markets for lower level m' anagerial and administrative personnel, school teachers,

retail sales clerks, clerk-typists and other clerical workers, truck drivers,
waitresses, hospital attendants and,other service workers. For.D elaware high

school graduatin classes, unemployment the year following graduation was only
9

7.2 nercent for the class of 1969 but rose to 10.U percent for the class of 1973.

Of the 1,812 students who completed the office vocational program in 1973, 3413

or 18.1 percent,were unemployed at year's end and another 244 or 13.5 percent

were employed in jobs unrelated to their training. In other words, one out of
three students trained i-n the office Program did not get a related job.

The State Department of Labor and State Department of P ublic Instruction

must greatly improve their data on employment, unemployment, underemployment,

wage rates, people seeking work, projected graduates in vocational/technical

curricula, and other aspects of the Delaware labor force, especially at community

or at least county -- level. These.data are needed by companies.interested in

Delaware sites and for many other planning and development purposes.

Therefore, it is recommended that the Governor assign one State agency the
7asic responsibility to coorainate and produce the needed information.

3) As our best inducements to new industrv are the State general obligation

industrial development bonds, the authorization limiton them should be
raised as needed. Also, the Industrial Bonds Act describing eligible

projects and terms should be continually reviewed and amended as

necessary to give maximum flexibility in assisting new projects,

including provision for non-manufacturi.ng projects not presently

eligible. Additional State financial aid for assembly of industrial

land, preparation of industrial parks and construction of speculative

industrial buildings may be required.

4) Delaware's banks should be encouraged to give greater lending support

to businessland industry. Commercial-industrial loans represent a smaller

percentage of all bank loans in Delaware, and this should be increased

,toward the United States average as another way of encouraging business

development and expansion in the State.

5) The D'elmarva Advisory Council is an effective.peninsula-wide regional

economic devel opment body fom.,ed by the States of Delaware, Maryland

and Virginia, which should be given increased.financial support,

particularly for development of the southern counties.

6) The State should,study a revenue-sharing formula for,commercial-

industrial revenue so that all jurisdictions of our small State will

share in the revenue equitably.

7) State and/or local programs for improved water and sewer systems,

transportation and better housing must be accelerated, as these needs

are unmet for the Dresent population and also are vital to further econo-

mic development. The State government, in cooperation with Delaware's

utility companies, must develop a plan for meeting long-term and
short-term energy needs of business and industry, including the develop-

ment of new energy sources and the conservationof present energy.

8) We encourage concentration of employriient and housing at sufficiently.

high densities that mass transit will be practical and profitable in the

future. The I-95/Route 40 corridor inNew Castle County is one of

Delaware's best.future industrial areas,.and planning for the area

should recognize this potential through proper land use allocation,

access and ser Vices for industry.

PART IV

Problems Affecting The "Quality of Life" in Delaware

1. An urgent and important matter is action to save Delaware's threatened

rail service. There is no time to lose. Rail.service is the lifeblood of the

economy downstate. In a few weeks decisions will, be made. Proposals are now

nearing final form at.the Federallevel.

-ate must immediately support a,plan to insure not only continuation
The St

but improvement of Oelaware's rail freight.service, it being an essential to

further economic development. The plan should provide for sound rail service

preferably by acquisition and operation of essential rail facilities by one or

more existing solvent railroad companies.

The Secretary of the Department of Highways and.Transportation be requested

to forward this statement of policy made by the Delaware Tomorrow Commission to

the relevant federal officials dealing with the.problem of the southern acquire-

ment of the rai.lroad and the rate problem and that it be also sent to our

Congressional Delegation and to the Delmarva Advisory Council.

Any plan considered must incorporate satisfactory north-south as well as

east-west interstate service, the latter having been adequate in the 'past and

apparently provided for the.future with publici-zed solvent carrieracquisition

plans. Delaware should strive to optimize traffic corridors between Delaware and

southern states by supporting.two routinq systems; one via the Delmarva and the,

CaDe Charles, Virginia car ferry, and the other a complete land route between

the Uilmington area and Washington, D. C. Service by the latter route will

permit maximum flexibility in choice of carrier beyond Washington. Both north-

south rail services would be, most logically and appropriately developed through

acquisition by southeastern based railroad(s), the absorption representing the

the type of end-to-end acquisitions meeting the "merger" criteria of the U. S.

Secretary of Transportation and the Federal administration. Such acquisitions

will insure high quality north-south rail service, which is questionable at this

point in time based on what is currently known about the proposals under consider-

ation.

The State plan should further concern itself with insuring maximum routing

flexibility permitting Delaware industry the unrestricted opportunity to select

'l service available to all s ctions of
the best ral e the countrv. To this end the

U.S.R.A. Final System Plan for reorganization of Northeast rail services must

either require the Consolidated RailwayCorporation to open routes via all rail

connections north, south, east and west or make provision for solvent southeastern

rail carriers to gain access to Delaware industry through trackage rights and/or

acquisition'of the necessary rail facilities..

2. The City of Wilmington-presents special economic and social problems

and probably is the major area of concern within the State. Unemployment is high
because of the exodus of people and businesses to the suburbs and the concen-

tration of unskilled low-income families.in the city. The result is inadequate
tax revenue to maintain City services, whi ch in turn leads to higher tax rates,

which brings on further exodus. Since the City of Wilmington is central to the

health of the State's ecanomv, it is ess ential that so lutions to its problems

be given top priority.

it i.s recommended that the following steps be taken to improve the economic

and.social environment within.the City of Wilminaton:

a. Direct economic growth to Wilmington, where there are unused

.industrial buildings-and land,.water and sewer system, s are adequate, and a

complete infrastructure built to se'rve 110,000 people now serves less than

.75,000.

b. Expand educational programs to upgrade residents' skills and

moti vat ions..

c. Expand the activities of and employment at the Port of Wilmington

by carrying out the recommendations of the "Port of Wilmington Study Committee.

including the necessary capital investment.

d Improve redevelopment in 14ilmington: we urge study of ways the

tax load might be spread beyond the city limits to encompass all of northern

Delaware., as the city is an integral part ofthe whole area and one cannot

prosper without the other..

e. Improve allcity services to make it an attractive and safe place

to operate a business.

f. Give special tax inducements to businesses which will locate.in.

areas of the city where adequate facilities.are already in existence so as to

make use.of existing investments not now being ful,ly utilized.

3. Homebuildingin Delaware,has.fallen from 5,800 units in 1970; 7,900 in

1971; 3,800 in 19721 and 9,,6.00 in 1973, to only 4,400 in 1974. The loss of housing

construction as an economic force has been critical.

PART V

Lack of Unity Between Political and
Business Leaders in Delawa@re

There has been a critical change developing between the leaders of government

and industry in Delaware. The disagreements involved have been su mmarized in a

varietv of Public statements over the past two years and the Committee has further

documented these problems in the form of letters from various business leaders in

Delaware.

The core of this controversy revolves around,the upper limit of the State's

personal income tax rate at 19.3%; the lack of a ceilinq on earned income; and the

100% capital gains tax.

1. Individuals in the upper income brackets are establishing thcir

residence outside the State when possible or after retirement. Such change in

residence can seriOUSlV erode the tax base. High personal income tax rates are

a serious detriment to the location of new business in Delaware.

2. Hany business. leaders are making either luke-warm or outriqht dis-

couraging recommendations to other businessmen considering the selection of.

Delaware for new business locations.

Another major concern has been the anti-business image of Delaware resulting

from such actions as:

1. The controversy over the present Coastal Zone Act.
Recent efforts by.the State Legislature to adopt discriminatory

excise taxes.

The Committee makes the following recommendations, to unify the business and

government leadership in the State and to correct the anti-business image of

Delaware:

1. The Coastal Zone Act, as ini
tially passed, was intended as a ston-gaD

measure to prohibit certain types of industry.

This bill was passed in lieu of a morc.compl*ex Coastal Zone Act which had

been proposed earlier but receiv e.d little support. In realitvi both bills were

an attempt to begin land use planning.at the State.level. The Committee has

concluded that thetiine has come to replace the initial Coastal,Zone Act with

a comprehensive State-wide land use planning act. The present regulations should

be used intact, as interim guidelines, to govern development in the coastal zone..

until the new land use management plan and regulation s are complete and enacted.

At that time the comprehensive State-wide land use management plan would supercede

the current Coastal Zone Act and other land use contro.1 I.egislation presently

administered by the State.
The present income and capital gains tax structure in Delaware puts the

State at a serious disadvantage in completing with other progressive states for

new business. An objective study ofthese tax sources should be made promptly

as they relate to the total revenue needs of the State and as they relate to

their impact on potential new business ventures locating in the State.
a. Such a study should up-date and evaluate the recommendations o@

t- he Hagemeyer and Carvel/Williams. Committee reports.

b. The study should involve the resources of the Finance Department-,

the University of Delaware, and t1he business cor-imunity.

The study should assess the counter-productive effects of causing

upper-income citizens.to change their legal residence and of imposing much

heavier tax burdens on capital gains and earned income than the federal tax,

structure.

d. Alternate sources of revenue.must be j udged for their equity and
effectiveness including the relati-ve burden of taxation on manufacturing and

@usiness in the State.

3. The State should establish a program to participate in the Atlantic

offshore drilling for oil and the development of deepwater terminals in such a

way as to maximize the future economic benefits while minimizing any detrimental

impact.

DeePwater terminals and offshore drilling may develop along the East.

.Coast. Delaware should be alert to and involved in such developments, both

torean the benefits of the job and revenue opportunities and to maintain control

to avoid undesirable environmental and other effects.

Delaware's location in the eastern transpor tation corr idors, our coastal

resources that could be vital to Federal enerqy policy,,* and our small area that

limits growth-generation within our borders, make the State quite sensitive to

external forces. If offshore drilling reaches peak production by 1985 and has a
full impact in Delaware (in addition to Ndw Jersey, Haryland' and Virginia)," the

State's direct job opportunities in support of oil exploration and extraction,could

increase by some undefined increment, possibly in the thousands. These basic jobs

might add three times as many more service jobs. At the other extreme, if pro-

duction is small and/or all or most of the impact accrues to other coastal states,

as it may, the effect on Delaware from offshore drilling could be minimal.

@The Committee did not ha ve the data required to predict such impact. Delaware

awaits the findings of'study on this subject by the Congressional office of

Technology Assessment,.suonlemeht6d by consulting services that Delaware may

employ. The State Planning Office should coordinate this effort. The highest

Drioritv for the State Planning Office under the Coastal Zone @Ianaqement Program,,

should be research to Predict and eventuallY direct the landside impact of offshore

drilling for oil and o-as.and/or of a deepwaterport. To offset the substantial

fiscal deficits and employment/incone/ta-x revenue fluctuations likely.from such

landside impact, the St,ate must.a.ttem,bt to build into other sectors of our

economy all the strength, diversity and stability Possible.

APPENDIX D

AN ANALYSIS,
OF
CHANGES
IN THE
DELAWARE TAX CODE
1960 -1974

by
The Delaware Econometric Model. Group

AN ANALYSIS OF CHANGES IN THE

DELAWARE TAXCODE, 1960-1974

The Delaware Econometric Model Group*

September, 1974

*Directors.: In'quiries should be directed to:

Dr. John H. Landon Gerald F. Hart, Manager
Dr. William R. Latham III Delaware Econometric Model
Dr. Kenneth A. Lewis Purnell Hall
University of Delaware@
Manager: Newark, Delaware .19711

Gerald F. Hatt.

This report was prepared by the
Econometric Model C-roup'under contract
with the Delaware State Planning Office,,
and.was financed in part through a Com-
prehensive planning grant from the Depart-
ment of HouSing and Urban Development,
under the provisions of Section 701 of
the Housina A t of 1954, as amended.

ACKNOWLEDGMENTS

This project has profited greatly from the work and coopera-
tion of a number of people.. Most of the work of compiling this
report was done under my direction by David Hutchinson through
the summer months of 1974. Dave spent. countless hours in law
libraries and interviewing individuals in and out of state govern-
ment to obtain the most accurate possible picture of state taxes
and their changes through the past fifteen years. From this data
he prepared the adjustments tothe data required to provide a
smoothed series for our use in model forecasting. His indepe'rid-
ence, training, intelligence, hard work and ability to get along
with people are responsible for the.success of this project.

Through the months Dave labored on this project he had the
excellent cooperation of a number of state officials. Hisham
Khalil, in particular, gave freely of his time and vast expertise
in dealing with statistics and state revenue matters. Bruce
Hudson of the State Planning Office cooperated fully in providing
valuable data and insights. Jack Malarky, Secretary of Finance
for the State of Delaware used his influence to obtain data that
would have been otherwise impossible to gather. State Representa-
tive John Billingsley was kind enough to review a rough draft
of the manuscript and provided many helpful suggestions.
Among the non-government persons who provided valuable in- J
sights and information concerning state finances were Bruce
Ralston of the Delaware State Chamber of Commerce and Bob Davis
of the Diamond State Telephone Company. Gerald Hart, the manager
of the Delaware Model, took on the responsibility for editing
the final manuscript and re-doing the charts into more readable
form. Lew Silver, the Delaware Model's computer analyst, gave
generously of his@time and effort and was very instrumental in
the -overall success of this manuscript.

The responsibility for any remaining errors of ommission or
commission is mine alone.

Dr. John H. Landon
Department of Economics
University of Delaware

TABLE OF CONTENTS

Page

ACKNOWLEDGMENTS . . . . . . ... . .. . . . . . . . . ... . .

INTRODUCTION . . . ... . . . . . v

DESCRIPTION OF TAX SECTORS
Personal Income Tax . . . . . . . . . . . . ... . . . . 1
Corporation Franchise Tax . . . . . . . . . .
Corporation Income Tax . . . . . . . . . 17
.Motor Fuel Tax . ... . . . . . . . . . . . . . . . . . 22
Business and'Occupational License Tax . . . . . . . . 27
Tobacco Tax . . . . . . . . . .... .. . . . . . . . . . 32
Motor.Vehicle.Registration Tax . .. . . . . . . . . . . 37
Inheritance and-Estate Tax
40
Alcoholic Beverage Tax . . . . 42.,
Pari-Mutuel and Admissions Tax . . . . . . ..46
Realty TransferTax 50
Insurance Tax ..... . . . . . . . . . . . . . . . . . . 52
Public Utility Tax . . . . . . . . ... . . .. . . . . . . 54
Other Taxes . . . . . . . . . . . . . . . . . . . . . . 56

GRAPHS OF TAX SECTORS
Personal Income Tax . . . ... . . . . . .. . ... . . . . 4A
Corporation Franchise Tax . ... . . . . . 13A@
Corporation Income Tax . . . . . . . . .. . . . . . . . 18A
Motor Fuel Tax . . . . . . . . . . . . . . . . . . . . 23A
Business and Occupational License,Tax . . . . . . . .. 28.A
Tobacco Tax . . . . . . . . . . . . ... ... . . . . . . 33A
Motor Vehicle Registration Tax ... . . ... . . . . . 37A
Inheritance and Estate Tax . . . . . . ... . . . 40A
Alcoholic BeverageTax . . . ... .. . . . 43A
Pari-Mutuel and Admissions Tax . . . ... . . . . . . . 47A
Realty Transfer Tax .. . . . . . . . . . .. . . . . . . . 50A
Insurance Tax . . . . . . . . . . . . . . . . 52A
Public Utility Tax . . . . . . . . . . . . . . . . . . 54A
other Taxes . . . . . . . . . . . . . . . . . . . . . . 56A

TABLE OF-CONTENTS (Cont.)

Page
ADJUSTMENTS IN-TAX SECTOR DATA
Personal Income Tax . . . . . . . . . . . . . . . . . . 5
Corporation Franchise Tax . . . . . . . . . . . . . . . 14
Corporation Income Tax . . . . . . ... . . . . . . . . 19
Motor Fuel Tax . . . . . . . . . . . . . . . . . . . . 24
Business and Occupational License Tax . . . . . . . . . 29
Tobacco Tax . . . . . . . . . . . . . . . . . . . . . . 34
Motor Vehicle Registration Tax . . . . . . . . . . . . 38
Alcoholic Beverage Tax . . . ... . . . . ... . . . . . 44
Pari-Mutuel and Admissions Tax ... . . . . . . ... . 48
Realty Transfer Tax . . . . . . . . . . . . . . . . . . 51
Insurance Tax . . . .. . . . . . . . . . . . . . . . . . 53

CODE CHANGES IN TAX SECTOR
Personal Income Tax . . . . . . . . . . . ... . . . . . 7
Corporation Franchise Tax . . . . . . . . . . . . . . . 15
Corporation Income Tax . . . . . . . .... . . . . . . . 20
Motor Fuel Tax . . . . . . ... . . . . . . . . . . . . 25
Busines s and Occupational License Tax . . . . . . . . . 31
Tobacco Tax . . ... . . . . * * * * * ' ' * * * * * * *35
Motor Vehicle Registration Tax . . . ... . . . . . 1. .39
Inheritance and Estate Tax . . . . . . . . . . . . . . 41
Alcoholic Beverage Tax . . . . . . ... . . . . . . . . 45
Pari-Mutuel and Admissions Tax . . . . . . . . . . . . 49
Realty Transfer Tax . . . . . . . . . . . . . . 51
Insurance Tax . . . . . . . . . . . . . . . . . . . . .. 53
Public Utility Tax .. . . . . . . . . . . . . . . . . . 55

OTHER FACTORS AFFECTING DATA
Personal Income Tax . . . . . ... . . . . . . . . . 9
Corporation Franchise Tax . . . . . . . . . . . . . . . 16
Corporation Income Tax . . . ... . . . . . . 21
Motor Fuel Tax . . . . . . . . . . . . . . ... . . . . . 26
Business and Occupational License Tax . . .. . . . . . . 31
Tobacco Tax . . . . . . . . . . . . . ... . . . . . 36,

@I. INTRODUCTION-

In order to forecast, one must first [email protected].

Delaware tax laws and enforcement procedures have changed

substantially over the past fifteen years. In order to use past

t,ax receipts in forecasting future state income, it is necessary,

to review such changes,And make appropriate adjustments in the

series for their impact. This study is an attempt to draw

..together th.e.changes which have occurred between.1960 and 1974

in the Delaware tax code, in enforcement procedures and major.,

economic events in the state which resulted.in abnormal fluctua-

tions in tax receipts.

The following sections each detail the behavior of a specific

tax source and include graphs of the actual and adjus-ted data.

Lists are provided of the code changes and ofthe other factors

influencing the tax data. The text explains how adjustments were

made and the conclusion sumn-arizes,the'major changes in the

Delaware.tax picture over this period..

We hope this.report.will,be useful to those forelcasting

state tax revenues.. These results are being incorporated into

the Delaware Econometric Model and when this has been accomplished,

greater in-depth economic analysis can. be done on all,sectors

of the Delaware economy. Any suggestions for additions to or

modification of this study would be greatly appreciated.

THE DELAWAR E PERSONAL INCOME TAX

The Delaware Personal.Income Tax is'the largest single

source of state revenue. Delaware, does not employ a general sales

tax (the largest revenue source in many states), so other taxes

must generate a larger share.of needed.revenue than is the case

in most states. The ongoing decision.to use,a relatively high

income tax rather than a sales tax in conjunction with a lower

income tax is based on public policy toward the. effect of1taxes

on individuals.with different.incomes. In@general, sales taxes

are regressive, and even though recent efforts have been made to'

develop and institute a sales tax excluding those items that

contribute most to regressivity, this state has found it pre-

ferable to retain and update its progressively graduated income

tax.

While rates have always been somewhat progressive, chang es

during the, past few years have made them increasingly so, as

shown in Table II.-l. The effective rates.average out to between

three and..four percent of Federal Adjusted Gross Income.

Oneof the benefits of a graduated tax is that it adjusts

itself to fluctuations in overall economic conditions. The recent.

Revenue Study Commission (The Hagemeyer Report) noted that the

class of taxpayers earning between eight and twenty thousand

dollars of taxab.le.income per year pay the same tax rate and

that because of this, the income elasticity of.the tax is not

as large as it could be. The commission suggested creating

smaller classes in this range to build additional'el asticity

into the tax.

The tax is based on an income figure which is derived by

making some modifications to the federally defined adjusted

gro ss income (computed by each taxpayer in completing his federal

tax return whichis due 15 days before the due date for state

returns). Use of the federal income as a base for state returns

began in 1971, stimulating a simplification of proced ures anda

substantial increase in the collection of taxes owed. There

have been suggestions recently for a tax that is.simply a

percentage of the federal tax paid (supporters of this type of

tax note that several states have already implemented such tax

structures yielding significant savings in paperwork and record

keeping,).

Employers withhold income taxes from their employees and

deposit those withholdings w ith the state.on a regular basis.

Persons not subject to withholding but earning income during the

year are required to estimate such earnings as soon as practicable,

and to pay quarterly installments of their estimated taxes The

combination of withholding and estimation require ments spreads

the revenues out over the year so that most,taxpayers are on a

de facto ''pay as you go" schedule. This also results in smaller

-2-

peak load problems in collection.
it is statIe policy to tax all income.connected with the
state,-but at the same time to avoid the ine quities of double
taxation whenever possible. Thus, residents of the state are..
taxed on all of theirincome for the yea.r..but are credited*for
taxes paid to other states, while non-residents pay taxes only
on that portion of their income derived from,sources within the
state. The tax is collected and administered.by the Division

of Revenue, Department of Finance..

-3-

TABLE II-I

PERSONAL INCOME TAX RATES

As Of As Of As Of
Taxable Income 1959 7/l/61 8/1/71 l/l/74

$ 0- 1,000 1.5% 1.5% 1.5% 1.6%
1@000- 2 @ 000, 2 2 2 2.2
21000- 3@000 3 3 3 3.3
35000- 4)000 4 4 4 4.4
4X0- 51)000 5 .5 5 5.5
5X0- 6)000 6 6 6 6'.6
6X0- 8)000 7 7 7.7
85000,- 20)000 8 8 8 8.8
20X0- 25)000 8 @8 8.5 9.3-
25,000- 30,000 8 8 9. 9.9
30)000- 40X0 8 9 11 12.1
40)000-' 50)000 8 9 12 13.2
5031000- 75,000 8 10 1-5.4
75,000-100,000 8 10 15 16.5
Over $100,000 8 11 18 19.8

TABLE 11-2

PERSONAL INCOME TAX RECEIPTS
($1,000)

Gross Income Net Income
Fiscal Year Tax Receipts Refunds Tax Receipts

1960. $ 918 $26@393
196@1 2,254 27)450
1962 36@194 1,570 341624
1963. 34 947. 1)471 33,476
1964 38)864 33510 35)354
1965 44)694 2,511 42,183
801 45)133
1966 .49,934 4),
1967 54,296 5)338 48,958
1968 59,218 4,664 54,554
1969 66)336 4@916 61,419
1970 74@047 5,561 68@486
1971 90,259 10@815 79,494
1972 98)155 12@436 85)719
1973 1105296 155643. 94@653

-4-

V47

T
X DATA

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Adjustments to Personal Income Tax Receipts Data.

The raw data includes many fluctuations that inhibit

estimation of future receipts, and even meaningful study of

past receipts..

First of all, wide seasonal fluctuations are evident.

Because seasonalizing is not practical with this data (the

pattern is not suffIiciently regular), twelve month moving aver.-

ages were taken, and the results.used to represent the centered.

month.

Next, research was done into the changes in collections

resulting from 'rate changes, procedural chan ges, and windfalls.

Adjustments were made as follows:

From.1960 through 1962, procedures for estimation, with-

holding, and final payments of the tax changed. These changes

led to several,'one-time adjustments.

From 1962 thr ough 1972, the court ordered divestiture of

General Mo tors stock by the DuPont Company led to a windfall of

29.5 million dollars. This money trickled in along with regular

tax payments, and was periodically shi fted out in large chunks.

This resulted in misleading monthly fluctuations ove r this period.

While records do not exist to permit a perfect adjustment,

approximations were made.
During,102, and for half of 1973, 50% of Capital Gains were

not taxable income. To.put this period into.l.ine with the rest

of the data, two million,dollars was.added in as an adjustment.

In 1961, the rates fo r incomes of.over $30,'000 were raised.

After examination of at income level breakdown, it was approxi-.

mated that the.effect of this change was similar to whatwould

have taken place with a 6.3% across-the-board increase. That

adjustment was, made.

In 1971, three things happened that led to needed adjust-

ments. First, the change to monthly withholding led to an adjust-

ment of $3,000,000 in May.and $5,000 000 in June. Second, a

rate.increase for incomes of more than,$20,000 came into,

existence. The impact of this change, approximated as above

(the 1961 adjustment), was 14.26%.

The other change in 1971 was the switch to a modified

piggyback method of figuring out the tax (using Federal Adjusted

Gross Income). The effect of this change is nearly impossible

to accurately determine, but,available,sources suggest that it

was similar to a revenue increase of 9.4%.

In 1974, there was an across-the- board rate increase.of

10%, for which the data was adjusted.

The resulting data was then averaged over twelve month

periods as before.

-6-

DELAWARE CODE CHANGES PERSONAL INCOME TAX

Effective
Date Description of Change

2-01-61 End of quarterly payments of tax after payment of
tax for 1960 which is to be paid @4 by 4/30, -2 by
6/15, and -4 by 10/30.

7-01-61 Rate. increase for incomes over $30,000.

9-09-61 Minor change in withholding procedure.

1-01-62 Allowance for accelerated deduction of losses in
"disasters."

4-17-62 Provision for estimation of taxes and payment therefor.
4-19- @62 Capital gains from stock distribution to, be only '50%
taxable,(GM-DuPont divestiture).

6-21-63 Exempted income of non-resident partners whose, income
IS not related to the state.

7-18-63 Changed definition of dependent.

12-17-63 Minor easing of refund procedure.

1-01-64 Union dues-made deductible.

6-09-65 Foreign corporations withholding Delaware incom e
taxes must post surety bond.

1-01-66 Interest rate for late payments raised-from 4% to 6%.

2-25-66 Federal gift taxes no longer deductible.

3-09-66 Provision making information returns .(dividends,
interest paid) more numerous.

1-01-67 Several definitions changed, non-residents now
required to apportion deductions like income, end of
reciprocal agreement with Maryland.

1-01-68 Added definition of a deduction for "Head of House-
hold.

-7-

Ef fective
Date - Description of Change

1-01-69 Notification of staterequired for those amending
Federal returns, change in-treatment of gain from
sale of home, deduction allowed 'for care of depen-
dents to free taxable for work.

6-19-69 Interest rate for refunds raised from 4% to 6%.

6-28-69 Interest rate for late payments raised from 6% to
12%.

7-10-70 Deduction up to $300 allowed.for expenses of
adoption.

7-14-70 Interest rate on refunds, late payments where exten-,
sion is granted raised from 6% to 12%.

7-23-70 Establishment of. Finance Department.

1-01-71 Renovation of the Perso 'nal income tas, estimation
'dates to coincide with those for federal taxes.

5-06-71 Thase withholding more than $200 monthly must deposit
those withholding monthly-

8-01-71 Rates increased for incomes over $20,000.

1-01-72- Capital Gains made only 50% taxable.

-3-29-72 Date for April estimation 'changed from 15th to 30th.

Maximum income for those using exemptions raised,
everyone. now permitted to itemize deductions.

4-26-73. Interest now paid on refunds held over 45'days.

7-01-13 Taxes paid to subdivisions'of other states no longer
credited.

7-06-73 Capital Gains once again 100% taxable.

1-01-74. Rates raised at all income levels (10% increase).

OTHER FACTORS AFFECTING DATA PERSONAL INCOME TAX

1962 - According to the Tax Department, this was a year of
improved enforcement.

1962-65 - Court forced divestiture of stock by DuPont Company and
family-led to windfall capital gains inflating income
tax receipts by 28.6 million dollarsover the years
noted.

.1964 Refunds were paid relatively earlier than in recent
years.

1964,65 Preliminary, final agreement of cooperation with
Internal Revenue Service.

1964 (December) Due to the Federal tax C'ut,,many persons
paid their state tax early.

1965 - All refunds out by end of July.

1966 - Tax Department extablished "Trouble Section".to notify
delinquents.

1967 -.Refunds went slowly (70% by end of July)

1968 - Refunds out relatively fast.

1968 Tax Department went to Merit.System of employment.

1969 Refunds slow-75% by August 1, 100% byAugust 15.

1970 Money appropriated for "modernization" of Tax Department..

1970 Six new field auditors hired.

1970 Refunds slow-some say on purpose to make fiscal 1970
look better on paper.

1971 Division of.Revenue began using computers.

1972 Refunds very late--not all out until October.

1972 According to independent autidors, the year marked a
"significant turnaround in performance" by the
Division of Revenue.,

_9"

1973 Refunds out quickly--resulted in $5 million paper
cost in fiscal 1973.

1974 Refunds out quickly--94% by May 30.

_10-

TTI. CORPORATTON FRANCHTSE TAX

The Franchise tax is the price a corporation must pay to

enjoy the benefits of being incorporated under the laws of

Delaware. This tax is levied upon all,domestic corporations

regardless of whether they do any business in the state.,

Delaware is often referred to.as "The Corporation State"

because of the extraordinarily large number of incorporations

here (including approximately 40% of the companies listed on the

New York Stock Exchange, and a majority of the 100.1argest

corporations in the country). While the Delaware Franchise tax

is not high, there are many states with lower ones,, and others

with no such tax at all. Thus, while the tax cos t of. locating

in Delaware is certainly one, factor affecting decisions on wher e

r "drawing card" of the state is its
to incorporate, the majo

combination of an updated legal framework favorable to corpora-

tions and a predictable,,efficient court system.

The tax is imposed.on all-.corporations except banks, build-

ing and loan companies, companies with assets,in unfriendly.

nations, agricultural cooperatives, drainage companies, and

religious, charitable, and education organizations.,

Tt isbased on either the total number of authorized shares

of,capital stock or gross assets (a term left undefined until

July.16, 1974), whichever calculates to be the lesser tax.

Corporations which are ina ctive for a tax year pay only 50% of

the normal tax payment usually required.

An important feature of the Delaware system is the existence

of both a minimum and a maximum tax ($20, $110,000, except

Regulated Investment companies, for which the maximum is

$55,000). A 1969 report showed that 30 companies were paying

the maximum $110,,000 figure, while 10 were paying the $55,000

maximum. The significance of these rates is evidenced by the

fact that in 1962, General Motors acknowledged that without

the ceiling, they would have owed $1,300,000 under the then

existing rates. There has beenconstant debate as to what

effect an increase in the maximum tax would have, would revenues

be increased or would enough corporations leave the state or

decide not to move here to make'such an increase fruitless?

Several studies have expressed the belief that since it is the

General Corporation Law and not the Franchise tax that attracts

corporations, significant untapped potential still exists and an

increase in themaximum would be an easy way to increase'state

revenue. Those opposing such a move, including the Department

of State, note that Delaware, while collecting less than some

states in absolute dollars, relies on the franchise tax for a

much greater percentage of its revenue. than any other state.

Because of the.size of this percentage, those people do not want

to risk losing the "goose that lays the golden egg."

-12-

Payment of the tax is due annually on March 1, and corpora-

tions in arrears for more than one year have their charters voided.

Under a recently changed procedure, the corporations determine

their own tax bill and file a return with their payment.

The tax is collected and administered by the Franchise

Tax Division, D,epartment'of State.

-13-

V@: L

TAX DATi

R TFRAN
i.00 ---w.Q0 ISO Go 240.00 01 C-I 0. 40 0 0 +80.00 11%0.00 640.00

21
b
0

co tl

(D rt

0 CrQ

Adjustments of Franchise Tax Data

Several adjustments were made on.the data for Franchise

Tax collections.

First, recent changes in due dates necessitated a shifting

of data from one month to another (for instance, data for

July, for the years in which the tax was due July 1, was

shifted-to March, since the tax is now due on.March 1) in order

to have a consistent and usable pattern.

Because of late deposits arising,out of Fiscal Year budget-

ary "games" the figures for June and July of 1969 were reversed.

Prior to the increase of the maximum tax to $100,000

(in 1961), $1,2502000 was added to each year's figures.

Prior to the 10% rate increase in 1970, all data was

adjusted upward by a factor of 1.10 to compensate.

-14-

DELAWARE CODE CHANGES FRANCHISE TAX

Effective
Date Description of Change

1-01-61 Maximum tax raised from $50,000 to $100,000.
Maximum for Regulated Investment Companies stays at
$50.liooo.

Minor procedural change shortening p .eriod.f.or.filing
of annual report.

1-01-66 Minimum tax changed to $10 for companies with less
than .1000 shares (was $5.50 for less than 250,,$11
for 250-10,000).
Review and appeal procedures changed.

9-01-66 Moved from Tax Department to Department of State.

.7-15-69 Minimum.tax raised to $20, maximum to $110,000,
others up 10%.

1-01-70 Professional corporations no longer exempt.

7-01-70 Last day for.payment changed from July 1to June 1.

1-01-71 Corporations in arrears.for one year will be voided
(was 2 years).

7-05-71 Investigations of corpora tions. failing to file made
discretionary.

1-01-73 Last day for payment changed to March 1, corporation.s
now figure out own tax and,file returnIs.

-15-

OTHER FACTORS AFFECTING DATA - CORPORATION FRANCHISE TAX
1962 - Overstated relative to 19'61 by delays (June, July, 1961)

1964 - Computers used by Tax Department for Franchise tax

1966- Back,to manual administration in State Department

1967 - Major revision of General Corporation.L aws

1969 - July overstated by late reporting

1970 - Field audits began

1971 State Department switched to computers

1973 Return system more efficient, according to State Depart-
ment

-16-

IV. CORPORATION INCOME TA X

The Delaware Corporation Income Tax was instituted in 19581.,

and is similar to taxes in neighboring states. Two departures

from the "usual" corporation. income tax are present and notable.

--Investment and Holding Companies are exempted, and.liberal

deductions are allowed-with respect.to-intercorporate dividends

and interest from investments. There have been recent moves to

put the Delaware tax in line with the others,, but so.far these

peculiarities remain at least partially in force.

Certain groups of corporations are exempt@in addition to

those named. Included in this catego ry are insurance companies

domestic international sales corporations,, fraternal organiza-

tions, corporations or trusts created for religious, charitable,

scientific, or educational purposes.'and. non7profit corporations,

in general.

Both domestic and foreign corporations are subject to this,

tax,,which is.levied on net.income from business.activi.ties.

and/or property within the state. If a company does all of its

business in the state, taxable income is substantially that

computed for federal purposes. Companies doing some business

and/or owning some income producing Iproperty outside the state

pay for only that part of their income connected with the state.

This figure is ascertained by averaging three ratios (property

owned in the State/all property owned, wages and salaries paid

in the state/all wages and salaries paid, gross receipts in the

state/total g ross receipts) and taking the resulting proportion

of the company's total Federal net income.

The fact that Delaware has no sales tax, coupled with the

fact that her neighbors do, means that non-residents often do

,their shopping in this state. Therefore, it is conceivable

that changes in sales taxes in these neighboring states could

affect sales, thus profits, and thus corporation income tax

revenues in Delaw .are.

The present rate of the tax is 7.2%, and the tax is payable

on the first day of the fourth month following the. end of the

company's fiscal year (about 60% are calendar year companies,

paying on April 1). A t.entative payment of an estimated 50.%

of the tax is made each year on the first day of the fourth

month of the current year.

.To encourage community awareness and improvement, a deduc-

tion of up,to 5% of the tax,or $50,000, whichever is smaller, is

allowed to companies involved with "neighborhood.assistance.11.

This deduction cost the state over $550,000 in its first three

years, but presumably, the benefit to the statefrom these

assistance projects is such as to justify the deductions.

The tax is collected and administered by.the Division of

Revenuel Department of Finance.

V81
TAX DATA'

R'll c 0 R 0 R
IV C-41 120 00 140.00 *0.00
00 20.0c, 40.00 W.00)

C,3

F-4

Adjustments of Corporation Income Tax Data

There have been two rate changes since 1960 for which it

was necessary to adjust the data.
In 1968, the rate was raised from 5% to'6% of..net intome,

and then in 1971 the rate was upp ed to its current level of,

Due to these changes, thedata up to.December,19.69 has

been multiplied by 1. 44 while that up to,December 1971 was

upped by a factor of 1.20.

-19-

DELAWARE CODE CHANGES CORPORATION INCOME TAX

Effective
Date Description of Change

4-06-60 Small change in refund procedure.

1-01-66 interest rate for late payments raised, 4% 6%.

1-01-68 Neighborhood tax credit introduced.

5-08-69 Penalty for failure to file up to 5% per-month.

6-19-69 Interest rate for those granted extension rais@ed,,
4% 6%.

6-28-69 Interest rate for late payments,raised, 6% 12%.

7-01-69 Tax rate raised, 5% - 6%, tax base widened to include
some of interest, capital gains, interest.

7-14-70 Interest rate for those granted extension raised,,
6% - 12%.

7-23-7V Shifted to Department of Finance.

8-01-71 Surcharge into effect, 20% of tax

1-011-72 Domestic international sales corporations exempted.

7-01-72 Neighborhood tax credit changed to deduction.

1-01-73 Expenses relating to interest income from U. S.
securities must be added in to get Delaware taxable
income, discretion allowing in weighting of three
factors for non-residents, no interest is to,be
charged for an underestimation if.it is at least as
great as the previous year's actual .income, but in
general penalties for lateness, etc. apply to
tentative payments.

7-01-73 Surcharge ends.

7-06-73 Tax rate raised to 7.2%, refunds are to be paid from
General fund.

-20-

OTHER FACTORS AFFECTING DATA CORPORATION INCOME TAX

1960 - Steel strike

1962 - According to the Tax Department, this was a year of
- improved enforcement

1965,66 - Enforcement ag
ain stepped up

1968 - Tax Department went on Merit system for employment

1910 - Money appropriated for "modernization of Department"

1970 - Major strikes

1970 - Field audits began in July

1971 - Department began to use computers

1972 - Independent auditors noted "a significant turnaround
in performance" by Division of Revenue.

-21-

V. MOTOR FUEL TAXES

The Delaware Motor Fuel Tax is divided into two parts--

the Gasoline Tax and the Special Fuels Tax. The current rates

are 9@ pe r gallon for gasoline and 8@. per gallon for special

fuels.

The tax is imposed on all motor fuel sold at retail or used

in the state. Fuel sold to thestate or its political sub-

divisions and that used for private use of the streets and

highways (such as for lawn mowers, farm vehicles, boats, air-

planes, etc.) is exempt@@from the tax.

Distributors and retailers must make reports and pay their

taxes monthly. Both distributors and retailers must also be

licensed, and bonded.

There is a related tax which.indirectly affects the Motor

Fuel tax receipts. That is the Motor Carriers Road Tax. This

has been imposed to assure that users of the state's highways

pay their share of the expenses of maintaining the roads even

if they d-o not purchase th eir fuel here. Undoubtedly, the

imposition of this tax and the way it is set up'have caused

many road users to buy their gas, or at least-part of it, in

Delaware.

The Motor Fuel Tax is typical of a consumption based tax

-22-

in that it-affects the incomes of lower m:H dle class'taxpayers

more (percentage-wise) than it affects others.

The tax is collected and administered by the Motor Fuel

Tax Division, Department of Public Safety.

-23-

TAX 'DATf

R TMFL ATMFL mlo?
.00 lp 00 20.00 SP.00 4C.00 50.00 W.00 ?P.oo sp.00

mlw -W--

-4b
1-40

t-4

Adjustments of Motor Fuel Tax Data

There were three different types of adjustments made in

the data for Motor Fuel Tax collections.

One type had to do with a late report by one large oil

company. This resulted in changes of the figures for December

1973 (from $1,891,000 to $2,142,000),and January 1974 (from

$2,557,000 to $2,234,000).

The second type of adjustment was due to procedural

inefficiencies while the tax was the responsibility of the

Division of Revenue, from July 23, 1970, until July.17, 1973.

The data during this perio d has been smoothe d into a more

regular pattern, while the overall total has been retained.

The other type of adjustment was due' to the various rate

changes. The rate went from 5e, per gallon to 60, on December 15,

1961, to 7(,% on August 1,, 1965,. to 81@ on August 1, 1971, and to

9@- on August 1, 1973. on July 1, 1967, sales to the state and

its political.subdivisions were exempted from the tax, and this

led to an adjustment of about 2%. The following factors were

used to properly adjust the data,for,these changes in rate

(actual or effective): 1.764 up to 12/61; 1.47 up to 8/65;

1.262 up to 6/67; 1.28 up to 8/71; and 1.125 up to 8/7,3.

-24-

DELAWARE CODE CHANGES MOTOR FUEL TAX

Effective
Date Description of Change

12-15-61 Rate raised for all fuels from 5(,% per gallon to 6(,%.

7-16-63 Tax divided into Gasoline Special Fueld, procedures
revamped, provisions for licenses, bonds instituted.

6-09-65 Maximum rebate from this tax to municipalities
raised from 1.2 to 2 million dollars (no effect on
receipts).

8-01-65 Rate for both classes raised from 6o, to 7(,%.

7-01-67 Sales to the state and subdivisions thereof exempted.

7-01-70 Institution of Motor Carriers Road Tax

7-23-70 Collection and administration duties moved from
Highway Department to Finance Department.

8-01-71 Rate for both classes raised from 7c, to 8@-.

1-01-71 Adoption of reciprocal agreement with other states
regarding exemption from Motor Carriers Road Tax--
presently affecting only Pennsylvania, but potentially
any other state adopting similar agreements.

7-17-73 Collection and administration duties moved from
Finance Department to Department of Public Safety.

8-01-73 Rate for gasoline only temporarily raised (through
6-30-74) to 90, (was ermanently raised to 9(,% in
p
June of 1974).

-25-

OTHER FACTORS AFFECTING DATA MOTOR FUEL TAX

1964 - Completion.of Delaware Turnpike

1973,74 - Fuel crisis, voluntary rationing

Gasoline tax rates in neighboring states per gallon

1959 60 61 62 63 64 65 66 67 68 69 70 71 72 73

Del. 5 5 5 6 6' 6 6/7 7 7 7 7 7 7/8 8 8/9

Md. 6 6 6 6 6 6 7 7 7 7 7 7 7 7 9

Pa. 5 5 71 7 7 7. 7 7 7 7 7 7 8 8 8

N.J. 5 .5 6 6 6 6 6 6 6 6 7 7 7 7 8

-26-

VI. BUSINESS AND OCCUPATIONAL LICENSE TAX

Licenses are required in Delaware for the privilege of

performing certain occupations and conducting certain bus'inesses.

Licenses perform both regulatory and revenue functions in that the

standards set for issuance of licenses act to regulate while the

fees help to build state revenue.

Prior to 1969, rates were quite low, the tax base was fairly

narrow, and enforcement was almost non-existent. However, since

then, licensing has been updated in all areas. The biggest

changes are in the areas of gross receipts of wholesaler-s,

contractors, manufacturers, and others,.and of purchases by

retailers. In addition to a flat-annual fee of $30 (payable on

July 1), each of the above mentioned persons or companies must

pay a percentage of their gross receipts or, in the case of

retailers, purchases. The fact that retailers pay a percentage

of their purchases rather than receipts can be criticized for

le ading to a higher percentage tax on low mark-up items than on

high mark-up goods. The 1969 revision of the law increased the

percentage rates drastically and established a system whereby

these "fees" are paid quarterly. These gross receipts and

purchases percentage fees dominate the totals for this tax

category in that they account for approximately 90% while the,

flat licensing fees account for only about 10%.

-277

The Business and Occupational License Tax is collected and

administered by the Division of Revenue, Department of Finance.

-28-

vez
TAX DATI

R T L I t" AT L I C' It .0
160.00 240.OC 3r;fj- . 0 C 400.00 t80.00 TO.00 40.00

Cl.

.Adjustment of License Tax Data

Because of the massive changes on July 1,.1969, which brought

the License Tax from a relatively minor tax position into

prominence as a substantial revenue source, comparisons cannot

realistically be made from one side of that data to the other.

Therefore., no adjustments of importance were made to the prior

data.

However, the newer data has been updated to keep it in line

with current receipts. Twice, there were lump sums paid as a

result of court action for back taxes. These sums ($1,100,000

from General Motors in August, 1969, and $1,32,000 from Delmarva.

Power and Light in October, 1971) have been deducted from the

data as they are misleading to anyone trying to discover payment

patterns and trends.

Beginning in May, 1970, the exemption from the mercantile

tax was raised from $25,000 per year to $20,000 per quarter.

The effect of this was about a 4% drop in'license tax receipts.

In August., 1971, the gross receipts tax rate for manufacturers

was raised from .1% to .2%, and since this area of the tax

(manufacturers gross receipts) represents about 27% of the total,

this change had an effect similar to an overall 13% rate increase.

The two aforementioned changes were adjusted for by

-29-

multiplying the data for the period after July 1, 1969, and before

September, 1971, by 1.13, and that between July 1, 1969, and

May, 1970, by an additional factor of .96.

-30-

DELAWARE CODE CHANGES,- BUSINESS AND OCCUPATIONAL LICENSE TAX

Effective
Date- Description of Change

Throughout period--minor changes in rates, base.

7-01-69 Massive revision of rates,, base, procedures,-
including:
Contractors from $5, 1/10% to $30, 1/2%
Manufacturers from $5, 1/40% to $30, 1/10%
Wholesalers from $5, 1/7% to $30, 1/5%
Retailers from $5, 1/7% to $30,4/5%

4-30-70 Mercantile exemption raised from $25,000 per ye ar
to $20,000 per quarter.

7-23-70 Collection and administration moved to Finance
Department.

8-01-71 Rate for manufacturers raised from 1/10% to 2/10%.

6-30-73 All sales to the state classified who lesale.

OTHER FACTORS AFFECTING DATA BUSINESS AND OCCUPATIONAL LICENSE TAX

Throughout 1960's--Most lax area of collection

.1963 Some recording of payments delayed by shift to computer

8-19-69 - General Motors paid $1,100,000 in.back fees
9-22-71 - Delmarva Power and Light paid $132,000'in back fees

1972 - Massive effort by officials to enforce existing laws..

Also note sales taxes of neighboring states (accompanying
material on Corporation Income Tax), for changes in these taxes
may cause.more persons to shop in Delaware, thus affecting
fees for the businesses involved..

-31-

VII. TOBACCO TAXES

The tobacco taxes of Delaware are divided into two

divisions--cigaret tes and other tobacco products. Cigarette

:taxes.are based on each ten cigarettes sold, so that the present

tax of 7(,% leads to an effective tax of 14(,% per package of twenty

cigarettes.

The cigarette tax is imposed by requiring a stamp on each

package transferred in Delaware. A stamp is applied only once

per package and must be affixed by the first possessor in the

state. Stamp affixers must pay for their stamps by the end of

the month following their purchases, except that all stamps

purchased in June must be paid for in June for fiscal year

accounting purposes.

This tax is quite regressive, taking a significantly.higher

proportion of a taxpayer s income,, the lower that income is.

Rates vary widely from state to state and constitute a,

significant percentage of the price to the consumer, so any

changes in the tobacco tax rates between neighboring states can

have unexpected results (for instance, even if the overall

elasticity of demand for cigarettes is very slight, the avail-

ability of lower taxes nearby could lead to an actual decline or

more likely a diminution of the expected increase in revenue

-32-

following an increase in tax rate in some circumstances).

Delaware, being a very small state, is especially vulnerable to

such effects.

The tax on other tobacco products (30% of the wholesale

price) was instituted in 1969, but after collections of only

23P,, acourt test led to the invalidation (on Constitutional

grounds) of the method of imposing the tax. The tax is still

on the books, however, and it seems that it would be a very simple

procedure to begin enforcing it. Nevertheless, it has been lying

dormant for almost five years.

The cigarette tax is collected and administered by, and the

power to collect and administer the tobaccaproducts tax lies

with, the Division of.Revenue, Department of Finance.

-33-.

v r-
TAX DAT'(

RJCIG
00 so 00 IC-0.00 14-IT, .00 211 c 015 0,
350.00 !PO.00
b
ok I

AC==-

ca
call
b

Adjustments of Tobacco Tax Data

Two types of adjustments were made in the Tobacco Tax

Data. First, because of payment deadlines, June is a big

collection month and July a small one. This is a recent develop-

ment, and data for those years prior to 1971 have been changed

accordingly.

The tax rate has changed several times: from 30, to 5r, per

pack of 20 cigarettes in 1961; to 7,,s in 1965,; to l1r, in 19 69;

and to 14(,k in 1971. Adjusting for these changes meant multiply-

ing the data by @he following fact.or,s: before November 1961,,

4.67; up to July@1965, 2.80; up to June 1.969, 2.00; up to

July 1971,, 1.273.

DEIAWARE CODE CHANGES TOBACCO TAX

Effective
Date Description of Change

11-01-61 Rate raised from 1 1/2 to 2 1/2 cents per ten cigarettes.

6-01-64 General provisions, procedures of tax updated.

8-01-65 Rate raised from 2 1/2 to 3 1/2

12-22-65 Penalties for evasion of the tax tightened.

7-01-69 Rate raised from 3 1/2 to 5 1/2, 30% tax on other tobacco
products imposed..

7-23-70 Responsibility of collection, administration to
Finance Department.

8-01-71 Rate raised from 5 1/2 cents to 7 cents, stamp affixers now allowed
to pay for stamps by end of month following.purchase,
except in June (previously, payment was required upon
purchase).

-35-

OTHER FACTORS AFFECTING DATA TOBACCO TAX

1962 Field audits began

1965 Completion of Delaware Turnpike--hurt sales (fewer
stopping points)

1966 State joined a multi-state cooperative.to cut down on,
illegal imports and sales (The North Carolina Operation)

1968 Increased efficiency, according to the department

1969 December 17--Court of Chancery finds. collection procedure.
for tobacco products unconstitutional

Rate of tax per twenty cigarettes

state 1959 60 61 62 63 64 65 66 67 .68 69 70 71 72., 73@1

Del. 3 3 3 5 5 5 5/7 7 7 7 7/111 11 11/14 14 14

Md. 3 3 3 6 6 6 6 6 6 6 6 6 6 6 @6

Pa. 5 6 6 6 6 8 8 8 8 13 13 18 18 18 18

N.1J. 5 5 5 7 7 8 8 .8 11 14 14 14 14 14 19

36-

VIII. MOTOR VEHICLE REGISTRATION

All motor vehicles, trailers, semi-trailers, and pole

trailers that are "driven or moved" must be registered and

licensed by the state.

There is a flat rate of $20 per year for "pleasure vehicles,"

a category that encompasses thevast majority of registered

vehicles. The other classes have rates based on the weight

@of the individual vehicle. Thepleasure vehicle rate once was

also determinedby weight, and,the change to a flat rate has

brought much criticism from those who feel that the small car

owners are paying part of what the big car owners.should be

paying.

The licenses are valid for one year, and they.expire. at the

end of the corresponding month in which they were issued the,

previous year. A recent change from quarterly expirations was

effected in order to spread the vehicle inspection,load out as

much as possible and thus to lessen the peak load problems

around the deadline dates.

These regulations are administered and fees collected by.the

Department of Public Safety.

-37-

VL C

TAX DATi

RTREG ATREG 0"
,Go --ep.oo yo.oo %so.oo 200.00 @40.00 2FO.00- :3-4LOO

>
i-3

rt o)
m rt

'Adjustments of Motor Vehicle Registration Data

In 1965, there was a rate change for pleasure vehicles.

Prior to the change, those pleasure vehicles weighing more

than 4000 pounds were taxed at.$16 per year, while those weigh-

ing less were taxed,at $10. After the change, the two classes

were eliminated, and all pleasure.vehicles were and still are

taxed at a rate of.$20 per year.

Since thetime of the change, light pleasure vehicles have.

accounted for about 75.9%.of the.total tax receipts from pleasure

vehicles, and heavy ones about 24.1%, for an overall net increase

of 81.9% in the pleasure vehicle category. Since pleasure

vehicles were about 39.7% of the total Motor Vehicle Registra-

tion Tax,,the net effect of the change was an increase of 32.5%.

so all data prior to July, 1965, was multiplied by.1.325.,

-38-

DELAWARE CODE CHANGES MOTOR VEHICLE REGISTRATION TAX

Effective
Date Description of Change

9-29-61 Small rate increase in some minor areas

7-01-65 Pleasure vehicle rate raised from $10 (up to 4,000
pounds), .$16 (over 4,000 pounds) to $20 (regardless
of weight).

6-30-70 Changed from quarterly to monthly expirations.

7-06-70 Collection.and administration duties moved from
Highway Department to Department of Public Safety.

5-21-73 New category introduced, recreational vehicles.

-39-

IX.' INHERITANCE AND ESTATE,TAXES

Delaware employs both an. estate tax,.and,an inheritance.tax..

The former exists merely to make use of allowances in the cor-

responding federal law. The latter, which comprises the bulk

of the revenue from this source),has,a fairly complex rate

system, broken down by the amount of-the inheritance and the

re lation of the giver to,the receiver (higher rates for more

distant relations).

This tax is oxtremely-unpredictab.le.as-f,ar as,receipts

are concerned. Delaware is such a small state (population-

wise) that the death.of'a single.very rich.person wil 1 cause a.

notable upturn in any yearls inheritance taxes.. While actuaries

can--give us a reliable estimate as to-the number of Delawareans

who: will die in any given year, they cannot accurately predict

when members of the DuPont family will die. Such a prediction

would be needed in order to make any usable forecast of receipts

from this tax. The only viable alternatives are (1) to not make

predictions regarding this tax,,and to.consider its proceeds as

a windfall of.sorts,,or (2) to make rough predictions for

receipts over-a large number of years, and-use those receipts

for some long-term goal.

'@These taxes are collected and administered by the Division

of Revenue,, Department of Finance,.

-4o-

VOV

TAX DATA

RTEST ATEST gtio2
20.00 40.00 GO.Clo SVI.00 Im.00 =0.00 1P.00 @fwoo

164

Cl
CT P)

DELAWARE CODE CHANGES INHERITANCE AND ESTATE TAX

Effective
Date Description of Change

7-30-71, Redefinition of brackets in some areas, and extensive
rate increase in all areas of inheritance taxes.

9-30-71 implementation ofState Gift Tax.

-41-

X. ALC'OHOLI.C.BEVERAGE TAX

Taxes are imposed on the distribution of alcoholic beverages

in Delaware. All makers, distributors,.and*retailers of such

beverages must be licensed by the state. The tax is imposed

on whoever makes the beverages within the state, and whoever

brings them already made into the state.

Although tax rates vary widely from state to state and

constitute a large percentage of the price to the consumer,

probably the largest factor causing Delawareans to buy liquor

and beer in other states (which is technically illegal except

for one quart per person per day, but unofficially permitted)

is the existence of fair trade laws that wholesalers use to

their advantage to force sellers in this state to charge

articicially high prices. -Because of these "laws," discount

liquor stores in Maryland ar e easily able to undersell.their

11competitors" on this side of the state line.

The currentrates are:

Per barrel of Beer $2
Per gallon of Wine $.40
Per gallon of.Spirits
25% of less ethyl alcohol $1.50
more than 25% ethyl alcohol- $2.25

The tax on spirits of more than 25% ethyl alcohol brings in

about half of the receipts. Beer is the next most productive

area, followed by wine, and then spirits of less than 25% ethyl

alcohol.

-42-'

vision
These taxes are collected and administered by the Di

of Revenue,, Department of Finance, with aid from the Alcoholic

Beverage Commission..

-43-

vbv

TAX DATA

RTALC RTAI-C, Rio"
2010.00 240.00 2FC.QO SFO.aO

0
M_ UAW=

Adjustments of Alcohol Tax Data

The Alcohol Tax Data as represented here is the sum of

taxes on Wine, Beer, Spirits, and other things. The receipts

from the Beer Tax comprise about 20% of the total and Wine Tax

receipts come to about. 10%. Spirits is divided in two groups

depending on the ethyl alcohol content. The tax1on spirits

with less than 25% ethyl alcohol comprises only about Mof the

total, while that on spirits with 25% or moreethyl alcohol

accounts for about.50%.

These percentages are vital to judging the effect ofrate

changes. Adjustments were made as follows.

In 1961, the Wine Tax was raised by 130%, so an adjustment of

13% was necessary. In 1969, the higher Spirits Tax rate was

raised by 45%, so an adjustment of 22% was made. In 1971, both,

Spirits Taxes were increased (low by 67%, high by 36.4%). which

led to an adjustment of 18%. Then in 1972, the Wine Tax was

lowered by 50%, which necessitated a 5% adjustment..

Specifically, the overall (cumulative) factors were:

1.545 up to June, 1961; 1.368 up to June 1969; 1.12 up to July,

1971; and .95 up to September, 1972.

-44-

DELAWARE CODE-CHANGES ALCOHOLIC BEVERAGE TAX

Effective
Date Description of Change

6-23-61 Rate for Wine raised from 35(,% to 80(,% per gallon.-

7-01-69 Rate for spirits more than 25%, from $1.1 5 to $1.65
per gallon.

7-23-70 Collection now by Finance Department..

8-15-71 Rate for spirits more than 25%, from $1.65 to $2.25
Rate for spirits no more than 25%, from $.90 to $1.50

10-01-72 Rate for Wine lowered from 80@. to 40@..

6-25-73 Overall revision of licensing of makers, distributers,
retailers.

-45-

XI. PARIMUTUEL SALES AND ADMISSIONS

Revenues from Equine racing establishments is broken into

three areas--Horse (Thoroughbred) racing, Horse Racing in Kent

County, and Harness Racing.

Taxes are levied in each area both on a per capita

attendance base and on the parimutuel.handle.. Current rates are

10C per admission for Harness Racing and Horse.Racing in Kent

County, 20(,% per admission for Horse Racing, 5% of the pari-

mutuel handle for Horse Racing and Horse Racing in Kent County,

and 5k/.-of the handle for Harness Racing (12% of this tax is

earmarked for the Delaware Standardbred Fund).

These taxes are collected and administered by the Division

of Revenue, Department of Finance with the aid of.the State

.Racing Commission.

-46-

RACING DAYS

Year 60 .61 62 63 64 65 66 67 68 69 70 71 72 73 74

Dela. Prk. 55 54 54 52 55 55 55 55 61 60 61 65 64 65 65

Dover Downs
(thoroughbred) 0 0 0 0 0 0 0 0 0 54 54 44 43 54 2

Dover Downs
(standard bred) 0 0 0 0 0 0 0 0 0 0 42 85 78 74 7-

Brandywine 89 75 92, 100 101 101 101 101 104 13E

Georgetown 0. 68 58 77 65 44 18 29 0

Harrington 36 40 55 62 56 76 62 68 64 8(

TOTAL 170 238 260 300 336 378 375 383 361 38@'

Unavailable

.VL'7

TAX DATA

RTHOR C
Do .00 160.00 240.430 3tZ. il 0 C, 4061 40 4490.00 3SO.00 640.00
sp

gal

>
fal lb

CA
rt lb
m rt
la.

Adjustments of Parimutuel Sales and Admission Tax Data

The rates for the various sources of this tax have changed

numerous times .(see Delaware Code Changes). Research showed

that recently, the subdivisions paid approximately the following

shares of the totals reported here: Horse Racing, 31%; Horse

Racing in Kent County, 7%; and Harness Racing, 55%.

The above figures were used along with the rate changes as

reported in the Delaware Code to come up with the following

factors of adjustments: before June 1965, 1.36; up to July 1965,

1.274; up to June 1967, 1.099; up to December 1967, 1.116;

up to May1970, 1.048; up to December 1970, 1.80;.up to July 1971,

1.096; up to December 1971, .97.

This graph must be looked at in conjunction with the table

concerning racing days through the years. The receipts by them-

selves are not regular enough to provide guidance, but when

looked at along with the days, some conclusions may be drawn

as to the effects of increases and decreases.in meet lengths.

A reliable adjustment for these changes can not be madebecause

the elasticity of the tax receipts (by racing days) is not close

enough to zero.

-48-

DELAWARE CODE CHANGES PARIMUTUEL TAX

Effective
Date Descri2tion of Change

Throughout period--additions to length of permitted
meets (increase in total racing dates)

5-26-65 Horse Racing handle rate raised from 4 1/2 to 5 1/2%.

7-01-65 Harness Racing handle rate raised from 3 1/2 to 4 1/2%.

11-01-65 Georgetown Harness Track opened.

1-01-67 Law-clarified to assure prompt payment- of taxes,
weekly.

7-27-67 Horse Racing in Kent County section established,
rates 10cents per admission, 4 1/2% of handle.
12-29-67 Harness Racing handle rate raised from 4 1/2 to 5%.

3-08-69 Dover Downs opened.

5-28-70 Horse Racing handle rate lowered from 5 1/2 to 5%.

1-01-71 Horse Racing handle rate lowered from 5 to 4 1/2%.

8-01-71 Horse Racing handle rate raised from 4 1/2 to 5 1/2%.
Horse Racing in Kent County handle rate raised from
4 1/2 t o 5%.
Harness Racing handle rate raised from 5 to 5 1/2%.

1-01-72 Horse Racing handle rate lowered from 5 1/2 to 5%.

-49-

XII. REALTY TRANSFER TAX

The Realty Transfer Tax is a tax levied on' the document.

transferring ownership of real property. It is lelvied,not only

on sales of land (with or without buildings thereon) but applies

equally to sales of condominiums,and transfers of rights under

leases with a potentialduration ofat least five years. The.-.

present rate of the tax is 2% of value, and value:is ascertained

usually by sale price, but sometimes by other,measures.

The tax is collected and administered bythe Division of

Revenue, Department of Finance.

-50-

VO!9

TAX DATA

RTREL ATREI xk-lol
4P.00 80.00 yo.00 %60410@' ZW.Go 240.00 T0.00 0.00

m
-AIL >

0
.,4
CL
OQ

OQ
.M

Adjustments of Realty Transfer Tax Data

The only adjustment made in the Realty Transfer Tax data

was due to a doubling of the rate as of August 1, 1971. The

adjustment was multiplication of all previous data by 2.

DELAWARE CODE CHANGES - REALTY TRANSFER TAX

Effective
Date - Description of Change

8-01-65 Effective date of the law (rate--I%).,

7-23-70 Collection and administration duties transferred from
Tax Department to Department of Finance.

8-01-71 Rate raised from I to 2%.

7-07-73 Condominiums and longleases made taxable when
transferred.

-51-

XIII. INSURANCE TAXES

The Insurance Tax in Delaware is based on gross premiums

recei ved. The overwhelming majority of premiums are taxed at

a rate of 1.75%.

A significant portion of the 1.75% tax goes to help fund

fire companies, and that portion is determined each year by the

amount of premiums paid for fire and related insurance.

Premiums for workmens' compensation insurance are taxed at

a rate of 4%, while profits from marine insurance.are taxed at

5%.

The tax is due March I each year, and is collected and

administered by the.Insurance Commission.

-52-

vz9
TAX DATAI

T Ts:L@, w"
R 7 It 's
160.00 -fo.00 -0.00 8V .00 16L.C0 '2410.OC V-10.00 4PO.00 400.00

F-1

C/3

1-4 . ......
2 ............. .........

cl-

03 CV

(D rt
pa

fb
GQ

Adjustments of Insurance Tax Data

Beginning in 1972, the Fire Tax was taken out of the 1.75%

Insurance Tax receipts, rather than being collected separately.

Therefore, each year beginning with 1973, an adjustment must be

made to make up for the transfer of funds for this purpose.

Thus far, this transfer has been made as a lump sum in

April, and amounted to $1,697,000 in 1973 and $1,780,000 in

1974. Adjustments were made to the data accordingly.

DELAWARE CODE CHANGES INSURANCE TAXES

Effective
Date Description of Change

1-01-72 Fire tax now deducted from 1.75% tax receipts and
transferred to a special fund instead of originally
going into the special fund. Tax is now paid by
all insurers, and not just fire insurers.

-53-

XIV. PUBLIC UTILITY TAX

The Delaware Public Utility Tax-is a tax placed on telephone,

telegraph, gas, electricity, and cable television usage. Itlis

imposed in addition to other taxes such as license taxes, income

taxes, and specialized gross receipts and privilege, taxes.

This tax in its present form was instituted in 1971, and has

been criticized because of its regressive features; that is, it

taxes essentials such as power for heating, cooking and lighting

and as such, hits the. low incomed the hardest.

The.rate of,the tax is 5% of the total cost to the consumer.

The tax on.telephone use is expressly passed on.to the consumer

and is noted as a tax on the bill as received from the telephone

company. However, the taxes on telegraph, electricity, gas, and

cable television are specifically written.into the Delaware Code

to-be taxes on distributers and not on consumers, but another

section of the Code allows regulated industries to change their

rates so that changes in the tax will not affect their net

receipts. Thus it appears that it is really_a direct 5% tax

on consumption of these utilities, and that the tax incidence

does indeed fall directly upon the consumer.

The tax is paid by the distributers to the state.monthly, by

the 15th of the following month. It is collected and administered

by the Division 'of Revenue, Department of Finance.

-54-

V179

TAX DATA

RTUTI ATUTI JR1 0"
220 - OC 16Jr CO WILUO 240.00 ZW.00 _YD.00

DELAWARE CODE CHANGES PUBLIC UTILITY TAX

Effective
Date Description of Change

8-01-71 Law into effect.

7-01-73 Telephone use by the state and its political sub-
divisions exempted from the tax.

-55-

XV. OTHER TAXES

For convenience and due to their.size relative to revenue

generating abilities, the remaining revenue sectors are.con-

solidated into one category, OTHER TAXES. Obviously, since they

are consol idated, there will be no list of code changes or

adjustments to this series. In the future, if their size or

economic significance warrants it, one or all of these series will

be analyzed independently. Presently, as set out in the monthly

reports of the Department of Finance, they are as follows:

a. Corporation Fees
b. Motor Vehicle - Operator License Fee
- Document Fees
- Titling Fees
- Reference Fees
c. Dividend and Interest
d. Hospital Board and Treatment
e. Court Fines and Costs
f. Motor Carrier Use
g..Telephone and Telegraph
h. Public Accommodation
i. Gift
j. Del. Tech. Tuition
.k. All Other Revenue
1. Non-Revenue

As the graph shows, these sect ors.when lumped together are

becoming more and more important as a revenue source and must

be carefully considered when forecasting state revenues.

-56-

v9s

TAX DATA

-tie r jn@
R',l 2- TH H tj
40.001 @..Ot &I W, 01 lf;0.00

CL lb

PRELIMINARY ANALYSIS
OF DELAWARE I
EMPLOYMENT IN
NINE MAJOR
INDUSTRIAL SECTORS

by
The Delaware Econometric Model.Group

PRELIMINARY ANALYSIS OF DELAWARE E14PLOYIIENT

IN NINE MAJOR INDUSTRIAL SECTORS

The Delaware Econometric Model Group*

September, 1974

*Directors:
Dr. John H. Landon, Associate Professor of Economics
Dr. William R. Latham III, Assistant Professor of Economics
Dr. Kenneth A. Lewis, Associate Professor of Economics

Manager
Gerald F. Hart

The preparation of this report was financed in
part through an Urban Planning Grant from the Department
of Housing and Urban Development under the provisions of
Section 701 of the Housing Act of 1954, as amended.

This report was prepared by the Delaware Econometric
Model Group under contract with the Delaware State Planning
Office.

ACKNOWLEDGEMENTS

The title page of this repo rt lists only the names of the directors

and manager of the Delaware Econometric Model Group. The list, of

individuals who contributed essentially to the report is far more extensive.

It includes all the students who have worked with us over the past nine

months, the private businesses, agencies, and individuals who have been

supportive of, our efforts to model the State's economy.

Especially deserving of mention are David TruesdaleV vho collected

and werifiedimuch of the data, John Lew Silver, who ably accomplished

computer.programming and analysis for us, and Kevin Dualeavy.and

Michael Pilot, who developed the individual sectoral equations discussed

in the report. We are also grateful to the State Planning Office for the

financial support which made the research reported herein possible.

TABLE OF CONTENTS

Page

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . 1

Section

1.0 Analysis of Employment in Nine Major Sectors . . . . 5

1.1. Delaware Employment in'the Chemical Sector . . . .10

1.2 Delaware Employment in the Transportation
Equipment Sector . . . . . . . . . . . . . . . . . 12

1.3 Delaware Employment in the Other Manufacturing
Sector . . . . . . . . . . . . . . . . . . . . . . 16

1.4 Delaware Employment in the Agriculture Sector . .19

1.5 Delaware Employment in the Construction Sector . .22

1.6 Delaware Employment in the Federal Government
Sector . . . . . . . . . . . . . . . . . . . . . . 25

1.7 Delaware Employment in the Services Sector . . . .27

1.8 Delaware Employment in the Retail Trade Sector .30

1.9 Delaware Employment in the Wholesale Trade
Sector .. . . . . . . . . . . . . . . . . . . . . . 34

2.0 Conclusion: Comments on the Dynamic Structure of
the Delaware Economy . . . . . . . . . . . . . . . . 37

LIST OF GRAPHS

Employment Sectors Page

1.1 Delaware Employment in the Chemical Sector 10A & 10B

1.2 Delaware Employment in the Transportation
Equipment Sector . . . . . . . . . . . . . . I 12A & 15A

1.3 Delaware Employment in the Other Manufacturing
Sector .. . . . . . . . . . . . .... . . . . . . 16A, 17A & 18A

1.4 Delaware Employment in the Agriculture
Sector . . . . . . . . . . . . . . . . . . . . . .. 19A

1.5 Delaware Employment in the Construction
Sect,or . . . . . . . . . . . . .. .. . . . . . . .. . 22A

1.6@ Delaware Employment in the Federal Government
Sector . . . . . . . . . . . . . 25A

1.7 Delaware Employment in the Services.Sector . . . 27A & 27B

1.8 Delaware Employment in the Retail Trade
.Sector . . . . . . . . . . . . ... . . ... . . . 30A & 30B

1.9 Delaware Employment in the Wholesale Trade
Sector . . . . . . . . . . . . . . . . . . . . . & 34B

INTRODUCTION

The objective of this report is to examine the aggregate

relationships between Delaware industries and the factors

affecting them. Since this is a preliminary analysis, future

reports will refine the comments and relationships identified

herein.

The industrial sectors considered in this report are highly

aggregated. The whole Delaware economy is considered to consist

of only nine sectors: chemicals, transportation equipment, other

manufacturing., construction, agriculture, Federal government,

services, retail trade and wholesale trade. This level of

aggregation is necessary in a preliminary analysis to identify

the major factors contributing to variation in the economic

activity of the'sectors. In examining.less highly aggregated

indust rial sectors, far more period-to-period variability would

be present, thus masking the underlying relationships causing

that variability. It is felt that by first examining aggregate

relationships in which less variability appears, the major factors

influencing industries in the Delaware.economy can be identified.

Future studies can then refine these factors to determine their

impacts on less highly aggregated industries in the state.

Many aggregate models of the United States economy specify

that the summation of all activities, GNP, can be divided into

five major categories: (1) government spending for goods and

services and investment, G; (2) business spending for new plant

and equipment, 1; (3) household spending for goods and services,

C; (4) spending by the three preceding agents for the products

produced in other economies, M; and (5) spending by agents in

other economies on the productg of agents in the U. S. economy,

In equation form this can be expressed as:

GNP = C + I + G + X M

Sufficient data are not available to summarize economic

activity.in the state of Delaware in the above categories.

However, an alternative way of summarizing economic activities

can be used which is very similar to the above method. In this

method economic activity is classified by industrial sector

rather than by agent (where the term "industrial" means specific

economic activities thus encompassing all economic activities

in. the state including agriculture and retailing).

In this report the aggregate industrial sectors examined are

the chemical industry, the transportation equipment industry, the

agricultural industry, and the summation of all other manufactur-

ing industries. These four sectors together constitute the major

exporting sectors of the Delaware economy and their activities

correspond roughly to the X activities in the above equation.

The sector which most closely corresponds to an investment sector

is the state construction industry, another of the.industries

considered in this study. Corresponding most closely to govern-

ment activity at the national level are state industrial sectors

designated as federal government, local government, and state

government sectors. Only the former is dealt with in this study.

Corresponding to consumption spending of households at the national

level are three sectors in the Delaware economy: wholesaling,

retailing, and services.

Since quarterly output data are not available by sector for

the Delaware economy, employment is used as a proxy f or sectoral

economic activity in this report. It is our future plan to

estimate output and expend itures for each of the above sectors.

Since Delaware is a relatively small economy,.other things

being equal, it would be expected that activity in the Delaware

economy would follow closely activity in the national economy.

There are, of course, reasons why one would not expect this to

be true in all cases. If a major proportion of some industry's

total U. S. employment were in Delaware, then it would be

expected that employment in this sector would be relatively

independent of the U. S. total. Therefore, one might consider

the preceding statement regarding an expected relationship

between Delaware industry and national industry to be a hypothesis

that will be subjected to tests, sector by sector, in this study.

In this report we examine only nine individual sectors, one

and identify empirically some of the major factors
at a time,

that explain variation in each sector's employment. Missing from

this analysis are several more useful, quantitative measures such

as the direct and indirect multipliers for each sector which

account for the interrelationships among the sectors. The

multipliers would show1how changes in any of the sectors ini-

tially impact the Delaware economy and what the, ultimate effects

would be after the initial impact has been transmitted through

all the interrelated sectors. This more sophisticated type of

analysis requires both the simlutaneous estimation and the

systematic simulation that can be produced only with the aid of

an advanced econometric model. Such a model is now being

developed for the State of Delaware., The analysis of,this report

represents preliminary work on necessary inputs to that econo-

metric moedl,.pointing out some of the dynamic interrelationships

found to be important in the Delaware state economy and indicat-

ing how sectors interact in a sequential manner to lead to changes

L
npersonal income in Delaware.

1.0 ANALYSIS OF EMPLOYMENT IN NINE MAJOR SECTORS

We begin the analysis of employment by sector in the

Delaware economy by concentrating on the export sectors which

respond to changes in the level of national demand for particular

products and in turn provide a driving force for the state

economy. It will be seen.that the following four industrial

sectors (chemical, t ransportation equipment, other manufacturing,

and.agricu.1ture) all respond to changes in.the national demand

for these products as indicated by changes in the national employ-

t levels in these sectors. It will later be-seen that the

response of state employment in these export sectors in turn

helps to provide the impetus for changes in the employment levels

in the more locally-oriented sectors of the state economy

(.Services, retail trade, and wholesale trade).

Before proceeding, we describe briefly the theoretical

framework embodied in the following analysis. From a micro-

economic point.of view the quantity,of labor employed in a

particular sector as well as the wage level can be described

with3'-n,.a supply and demand framework of the labor market.. The

demand for.labor as an-iniputinto the production process is

derived from the demand-for the final output produced by the

labor. in this sense the demand for labor is affected by

factors which influence the level of demand for the product,

cing; suc
which the labor s produ'* h factors include the level of

personal income, the level of GNP, the price level and, in some

instances, may be proxied by national employment in the particulai

sector. In addition, the quantity of labor demanded responds to

the wage rate currently being offered. For example, if wages

rise or are expected to rise, producers can begin to substitute

other factors-of-production such as land and capital equipment

for labor. Of course, such substitution is not always possible

and when possible generally takes a long period of time to be

effected. Thus, the impact of changes in wage rates up on the

demand for employment can be assumed to take several quarters

if not years. It is the demand-for-labor equations described

here, With certain mod ifications, which will be estimated and

discussed in the following portions of the paper. Turning to the

supply side of the labor market, it is assumed in the analysis

below that the wage rate in the particular sector-within a

quarter is determined by outside.and past forces and does not

vary with,current levels of employment. Thus, for example,

wages in the Delaware economy may be assumed, within a particular

quarter, to be.dependent upon such factors as national wages in

the particular sector, past changes in local labor market condi-

tionsi.recent changes in union, contracts, etc. Thus it is

assumed that the supply curve within a particular quarter is

horizontal at the going wage.,

The discussion of each sector below begins with a graph

which compares Delaware employment with national employment in

the sector since 1963 on a quarterly basis through the fourth
quarter of 1972.1 There are thus forty separate observations on

national employment and state employment in each sector to use

for making the comparison. Care must be taken in interpreting

the magnitudes in each graph, however. In order to compare

easily variations in state employment with variations in national

employment, many of the graphs have had the state magnitudes

adjusted upward by a factor which ranges from zero to one hundred.

Therefore, one must note carefully what the adjusting magnitude'

is for each state series before comparing visually the absolute

size of state employment to national employment in any sector.

The factor by which each state employment series has been

multiplied is clearly indicated on each graph.

After examining the graphical relationship between state

employment and national employment in each.sector, a statistical

technique, multiple, least-squares regression analysis, is used

to determine whether or not a significant proportion of the

variationin state employment can.be explained by variations in

national employment in the sector. In those cases where this is

Additional data on state employment are available through
the second quarter of 1973. The source of the employment data
is the U. S. Labor Department publication, Employment and Wages.
The additional state data was obtained from the.research division
of the State Department of Labor.

not true, or where national employment alone provides an incom-

plete explanation, other factors are then examined to provide' a

better explanation of variation in the state employment for each

individual sector. Again, it must be emphasized that since this

is a preliminary report, no final conclusions regarding the fac-

tors, influencing each sector can be drawn at this time. However,
L
it is interesting to note that the factors which have been identi-

fied for most of the sectors explain a very high percentage of

the variation in employment in the sector.

In some cases the relationship specified may not represent

intuitively appealing relationships. This may be due, in part,

to,the fact that this study is embedded in a larger study which
seeks to forecast the future level of state employment'in each

of the sectors. For this reason, a conscious attempt has been

made in some cases to use var iables which are related to each

sector in a sequential rather than a simultaneous relationship

so that one variable is a statistically reliable predictor of the

other. For example, it has been found that employment in the

state's wholesale industry during the current period is a very

good predictor of employment in the state's retail industry

three periods in the future. Thus, wholesale employment lagged

two periods is used to explain retail employment even though one

would normally expect that wholesale employment would be a

function of previous retail employment rather than the reverse

relationship found. While a complete understanding.of why such a

relationship would exist is not available at this time, it is

felt that such a relationship probably can be explained when the

Delawar e economy is more adequately understood. For the present,

this relationship is used only because it provides the best

prediction of retail employment. In other cases lagged values of

variables are included for strong theoretical reasons, as when

real personal income.is used to,explain the level of employment

in the service industry.

1.1 Delaware State Em2loyment in the Chemical Sector

Roughly three-quarters of the labor force in the chemical

industry in Delaware is employed by duPont, the.largest chemical

company in the United States, specializing in industrial chemi-

cals. Wilmington is the headquarters of duPont, Hercules, and

formerly of Atlas. As a c onsequence, roughly two-thirds of the

total chemical employment is engaged in management And research.

As evidenced in the plot of state employment in the chemical

industry over time versus national employment in inorganic and

industriaIchemicals, Delaware employment follows very closely

the national employment level.

Further evidence confirming this hypothesis is pr ovided by

multiple regression analysis which indicates that the national

employment level explains approximately ninety-two percent of

variation in the state employment level. From further comparison

of the graphs, it appears that Delaware. employment is at least

as stable., if not more stable, than national employment. The

two series tend,to.follow roughly the same pattern until recent

years when a significant departure may have begun, although thete

have not as yet been enough obsei@vations to determine whether

or not this departure has any degree of permanency.

Perhaps.because chemical employment in the state of Delaware

is a significant portion-of national chemical employment, the

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equation which provides the best explanation of variation in

Delaware employment in the chemical industry includes, besides

the constant term, only the single variable, national employment

in the industrial and inorganic chemical industry.

SECHEM -15639.5 + .1492 NECHEMI
(18.65)

2
R 916 (Approximately 92% of the variations in
Delaware employment in the chemical sector
is explained by this equation)

SECHEM Delaware employment in the chemical sector

NECHEMI National employment in industrial and
inorganic chemicals

To illustrate what this equation means in practical terms, let

us consider a change in the level of national employment in the

industrial and inorganic chemical industry from its present level

to a level ten-thousand employees higher than at present. The

coefficient .1492 in front of NECHEMI indicates that 1,492

additional,employees would be expected in the chemical industry

in Delaware in association with a 10,000-person increase in

employment in industrial and inorganic chemicals at thenational

level resulting, perhaps, from a general increase in demand for

the chemical products. The number (18.65) beneath the regression

coefficient indicates that this increase in Delaware employment is

indeed statistically significant. (The number is a t-value which

can be considered to indicate significance when greater than 1.5.)

The standard error of estimate of this equation is 650 or approxi-

mately 2. 15 percent of the mean value of state employment in

chemicals. This indicates., from a predictive basis, that the

equation will predict state employment in chemistry with a degree

of accuracy of approximately two percent.

1.2 Delaware Employment in the Transportation Equipment Industry

The employment graphs indicate that Delaware state employment

in the transportation equipment sector is a fairly small percentage

of the national total. (Note that the state employment graph

at.the bottom of the figure has been multiplied by a factor of

ten.) State employmen t in Delaware in this sector has trended

upward at a fairly steady pace over the last fifteen years and

appears to be slightly more stable when compared with the behavior

of national employment in transportation equipment. A significant

amount of variation in the national series is due to strikes.

For example, the strike in the fourth quarter of 1970 is clearly

evidenced in the national series and,, upon close inspection, in

the state employment series as well. As a result, the multiple

regression analysis which followshas included a dummy variable

entitled "strike" to allo w for this particular phenomenon. As.'

implied in the graph, the strikes before 1970 did not have as

significant an effect upon state employment as the 1970 strike;

the regression analysis confirms this hypothesis. Also as

evidenced in both graphs there is a strong s easonal pattern in

employment in this particular sector with employment falling

L2
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9

National Employment in Transportation Equipment
(10,000,S)

State Employment in Transportation Equipment
(1,000ts)

L 3, f-, CZ3 C3 G7,C43 03.CO GO 711GO 72.CLI n.00 71+ Ica
TIME

through the course of the model year, and bottoming during the

model changeover occurring in the third quarter of each year.

Most recently, state employment shows a leveling off

since 1971. It appears that the plants in Newark and Boxwood

Road had stabilized the level of.their employment despite a

gradual increase in employment at the national level over this

same period. This is probably the result of capacity constraints

in combination with the indivisibility of shifts in the industry.

The regression equation explains well the employment.in.the-

transportation sector but does not behave as well as chemicals,

-since only approximately 85 percent of'the variation in state

employment is explained by the equation.

SETRAN 1375.0 + .8425 (SETRAN-1)-+ .0155 (POSNET)
(10.50) (4.96)
+ .0164 (NEGNET) 1569.4 (STRIKE) + 616.1 (MODEL
(5.18) (-2.99) (2.85)

2
R 853 (Approximately 85% of variations in Delaware,
employment in transportation equipment sector
is explained by this equation)

SETRAN Delaware employment in the transportation
equipment sector
SETRAN-1 = Value of.SETRAN one quarter previously
POSNET = Value of positive quarterly changes it national
employment in the transportation equipment
sector (0 when negative)
NEGNET Value of negative quarterly changes in national
employment in the transportation equipment
sector (0 when positive)
STRIKE Shift variable to account'for major automobile
strike (= 1 for strike, 0 otherwise)
MODEL Shift variable to account for model changeover
in the third quarter

The standard error of estimate is approximately 500 which

indicates that about five-and-a-half percent error in prediction

of the employment level, again not as good.as the performance for

the chemical industry.

'Turning to a discussion of the variables,included in the

regression analysis, the presence of SETRAN-,l in the equation

indicates that current levels of employment in the transporta-

tion industry are closely associated with employment in the

preceding period. The two variables POSNET and NEGNET indicate

that-state employment responds positively and significantly to

changes in the demand for transportation equipment at the

national level as proxied by changes in national employment in

the sector. The two variables are entered separately in the

equation to test the hypothesis that positive movements in national

employment. in the transportation. sector.and negative movements in

national employment in the transportation.sector would have

,significantly different effects.on state employment in the

transportation sector. Because the two coefficients have

approximately-the same magnitude, ..0155.versus .0166, this hypo-

thesis is rejected. One interpretation of this result is that the

state industry is equally susceptible to shocks from the national

level in both the downward direction as well as,the upward direc-

tion.

Because.of the presence of SETRAN-1, the dynamic structure

of the state,employment in the transportation equipment sector is

such that state employment responds to changes in national demand

conditions with a,lag distributed out over time. This lagged

response to national changes, stretching.outover several periods,

adds to the difficulty in.trying to explain changes in state

employment in the transportation industry. Employment in the

automobile plants in Delaware, is somewhat, difficult to explain

for several additi,onal,reasons. There,are'significant indivisi-

bilities apparent in the method,of,.production, as for example,

when an entire -,shi-f t' is., added or 1&@ off. Furtherm,ore-, the

ot;tput is homogpneous,anld@the'mix of products islalways changing

and.,it never seems to be repeated.

A final graph fo
the'trapp.pprtation sector plots the actual

level of employment in, transoortation versus the'predicted level

As implied by the least squ@ ares, regression equation. As one can

see, the least squares equation explains fairly well changes in

the-state employment level. More importantly, the regression

equatioaseems to pick up the turning points in state employmen t.

This is particularly heartening in view of the fact that this

sector has a particularly complex dynamic.pattern and for other

reasons is difficult to model.

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..1.3 Delaware State Employment in Other Manufacturing Industries.

The plots of state and national employment in,the other

ector again,indicates that the Dela-
manufacturing industries s

ware economyrepresents a fairly small percentage of total

national employment in the sector (state employment has been

magnified one-hundred times). Employment at both the state

level and the national level have been gradually rising over
@t ime, with the national level showing mo revariation.than the

state level. With regard to recent experience, both series

indicate a decline in employment in,.the 1&st@quarters of 1970

and the early quarters of 1971. over the entire period, employ-

ment in Delaware in other manufacturingdoes seem,to correspond

fairly closely to employment at the national level, as expected-

for export-oriented industries*. It should be noted at this

point that the re ason that all of the other manufacturing

industries have been aggregated togetherAs that no single

industrial sectoil@-,b-2sides transportation equipment and

chemicals, are large enough to merit separate recognition in a

studyat this level which attempts to indicate the general forces,

responsible for changes in state economic activity.

The regression equation confirms that employment at the

national@lev6l in otheirman'ufacturing is indeed a highly

significant explanatory variable in the equation for state employ-

ment in other manufacturing. Employ-

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ment in-other manufacturing responds to variation in national

demand factors as proxied by national sectoral employmenti Again

the hypothesis that these industries are.expprt oriented and

linked to the national economy is confirmed.. However, variation.

in the national employment level does not provide a complete.

explanation of state employment; two additionalfactors appear to.

be particularly important. First.is the seasonal variation in the,

series and second.'is the dynamic,struct,ure of the sector, cap-

tured by the lagged values of SEOMAN,

SEOMAN 934.9 +.6792 (SEOMAN-1) + .2695 (SEOMAN-.2)
(1.95)
-CH) + 1705.3 (QUARTER 2)
+ .0022@ (NEOMAN

+ 887.1 (QUARTER 3)
2
R .952 (Approximately 95% of the variations in
Delaware employment in other manufacturing.
is explained by'th.is equation)

SEOMAN= Delaware, employment in the other manufacturing
sector
SEOMAN-i- Value of SEONAN i quarters previously
NEOMAN-CH Change in national employment in other
manufacturing from previous to.present
quarter
QUARTER i Shift variable to account for regular
seasonal difference from omitted quarters
in quarter i 1 in quarter.i and
0 otherwise)

Again the dynamic structure of the state otb er-manufacturing

sector is such that changes in national demand conditions lead

to changes in Delaware employment but not immediately. In

addition, this impact is felt over several quarters into the

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future, complicating the problem of explaining state employment.

These factors combine to provide,a very good explanation,of

state- employment, with approximately 95 percent of the variation.

in state employment account.ed for. The standard,error..of.estimate

forthis equation is,420; thus, the predictive accuracy of this

patticu lar equation is about 1.4 percent.

As a final indication of the quality provided by,t he re-

gression equation,, the actual levels of state:em,ployment-in.other

,manufacturing and the levels predicted by the regression equation

have been plotted. Again the regression equation picks up the

turnit.ig,points in the series very well..

In an attempt to summarize behavior of the three industrial

sectors considered above, a separate regression-ana.lysis has been

conducted to explain the total employment level summed over the

three sectors. Rather than present-this-equation.,the actual and:

predicted levels of employmenthavebeen plotted. As can be seen.

in th e figure, the regression 'line provides an excellent exp lana-

tion of state employment in the export-oriente,d manufacturing

sectors particularly in the most'recent years.

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1.4 Delaware State Employment in the Agricultural Sector

The last export-oriented sector considered in this paper is

the agricultural sector. Again the plot for state agricultural

employment has been magnified by a.factor of one-hundred because

.agriculture is not large vis a vis national agricultural employ-

ment. It should be,mentioned at the outset that these employment

figures represent only covered employment, i.e., employment

covered by federal unemployment insurance compensation, and that

covered employment does not represent a large percentage of the

employment in the agricultural industry. As a result, the

employment data here are merely indicativeof a certain portion

of the agricultural labor force and must be treated with some

degree of caution. The figures indicate that employment has been

rising both nationally and regionally, particularly since 1970

where the upward trend seems to have accelerated at both the

national and state level, with perhaps a greater increase in the

national level. The rate of increase here. is somewhat illusionary,

however beacuse of the increases in coverage in the reported data..

A second feature of these particular series which delineate them,

very clearly from the previous sectors considered is the strong

degree of seasonality, expected in the agricultural industries.

The series also,indicate a slight decline in state employment

in the 1967-68 period.

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Again the regression equation indicates that.state-em ployment

responds positively to changes in the demand for agricultural

products at the national level, as expected for an export-linked

sector. This is reflected in the regression equation for the

state agricultural sector which finds that state employment

responds to changes in the wholesale price index for farm

products. Thus with the rapid growth-of food prices and farm

products in the recent past the levels of state and national

covered employment have both increased.

SEAGR -212.165 + 5.9229(FARMINDEX-2) 457.502(RELWAGE-4)
(5.42) (-1.50)

+ 110297.761(RELEMP-4) 75.2951(QUARTER 1)
(3.79) (-2.17)

+ 41.945(QUARTER 2) + 45.731(QUARTER 3)
(1.99) (2.25)
R2 .815 (Approximately 82% of the variation in
Delaware employment in agriculture sector is
explained by this equation)

SEAGR Delaware employment in agriculture. sector
FARMINDEX-2 Value,of U. S. index of wholesale farm
prices two quarters previously
RELWAGE-4 Ratio of Delaware wages in agriculture to
Delaware wages in all sectors four quarters
,previously
RELEMP-4 Ratio of Delaware employment in agriculture
to total state employment four quarters
previously
QUARTER i Shift variable to account for regular
seasonal difference from omitted quarter
in quarter i 1 in quarter i and 0
otherwise)

Also significant in the regression equation is the season-

ality and the dynamic structure of the employment sector. The

regression equat ion includes the value of state employment in

agriculture lagged four quarters, which indicates that last

year's employment during the same quarter is an important

e"-planatory.variable of this quarter s employment. As such

there is a certain amount of inertia in the state agricultural

series and theresponse of conditions in the state industry to

changes in national demand factors are distributed -out over

future periods in time.

Finally, one additional variable which has not appeared in

the above equations is the relative wage in.the agricultural

sector. As might be expected, as wages rise in the agricultural

sector, employment is reduced. When labor becomes more expen-

sive, the equation implies that farmers apparently find alterna-

tive ways of producing their produce, ways which involve less

labor-intensive processes. This substitution of capital or land

for labor is not unexpected in an industry like agriculture,,

where the technology is such that such substitution is much

easier than in the other sectors analyzed above. However, as

expected and anticipated in the introduction the impact of wages

on state employment occurs with a long lag, here over a period of

one year and even longer. Thus the substitution of inputs

occurs only slowly, waiting for management decisions to be made

and then put into effect.

1.5 Delaware State Em2loyment in the Construction Industry

The above discussion has. considered the industrial sectors

in the state economy, corresponding roughly with the major export-

ing sectors of the Delaware economy. Attention is now turned

toward the construction industry, which most closely corresponds

to an investment sector in the state economy. It might be

reemphasized that in models of regional growth- it is the

exporting sectors which provide.impetus for rapid growth in any

economy, while the remaining sectors in the state's economy

merely reflect the need for services, including the construction

of capital facilities to permit the activities in the exporting

sectors.

The employment graphs indicate a slight trend in the con-

.struction industry both at the national and state levels with a

greater increase in the state level since 1970. Since the state

employment series has once again been magnified by one-hundred,.

it is not so large relative to the national series as appears on

the graphs. There is some evidence here, however, that activity

in the state construction sector is somewhat independent of the

national sector, particularly over the past few years. Also

exem plified in the series is a strong seasonal trend much like

the seasonality observed in the agricultural sector above. It

is not,unexpected that the low point in the seasonal swing occurs.

in the first quarter of the year. Over recent years it.appears

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that the Delaware construction industry has been able to insulate

itself somewhat from the strong seasonal trends that occurred

in state employmentin the early-and middle '60's in@construction.

-Thisis not true of the national-industry which seems to be as

susceptible to seasonal changes in the late '60.'s and early

.@.'70's as it was in the middle and early '60's.

Turning to the regression results for the construction

industry, the quality of the explanation is less satisfactory

than one would hope. For example.., the.percentage explanation in

variation of the state employment series provided by the equation

is only approximately 82 percent. Second, the standard error of

estimate is large enough to indicate a prediction error of

...be tween four and five percent. In.ddditi on, the specification

does not meet certain theoretic al standards, since, for.example,

the coefficient for the average wage coefficient, REAWCONS, is

positive, whereas micro-economic theory would indicate a

negative relationship here. This must be interpreted as a

source of specification error in the equation, providing.a

signal that additional work need be done.

..SECONS -13378.3,+ .0035(NECONS) + 17006.1(RELWAGE)

-957.8(QUARTER 2) + 517.4(QUARTER 3) + 646.3(QUARTER 4)

2
R 820 (Approximately 82% of the variation in Delaware
employment in construction sector is explained by this
equation

SECONS- Delaware employment in construction sector
NECONS = National employment in construction sector
RELWAGE = Ratio of Delaware to national wage
QUARTER i Shift variable to account for regular seasonal
difference from omitted quarter in quarter i
1 in quarter i and 0 otherwise)

Nevertheless, even though the specification has certain weak-

nesses, the equationdoes predict fairly well. Thus this parti-

cular specification was picked not because of its explanatory

power, but rather because of its predictive power. The possibil-

ity that such a situation could arise was mentioned in-the intro-

duction. The equation does indicate the strong seasonal pattern

observed in the employment figures above. In addition, and in

spite of the fact that construction is not an export industry,

there seems to be a strong relationship between national and

state employment. This may be because capital markets in the

United States are national rather than regional in.character, and

construction projects in Delaware must compete on a national

level for funds necessary to finance them. It is to be expected,

then, that local construction activity.will correspond fairly

closely to activity at the national level, given thedependence

of both the state and national industr y on the national capital

market.

In future studies we plan to in clude directly into the model

of the Delaware economy a model of the financial sector of the

Delaware economy and its ties to the national financial sector.

This extension is really necessary to understand the behavior of

the investment sectors of the state economy.

Unlike some of the above equations, the dynamic structure

of the construction industry does not appear to be particularly

complex. However, it should be noted that given the recent

experience in national capital markets the dynamic structure.of

this particular sector may be changing; if this is so, past

information become s less useful in predicting the future level of

state construction.

1.6 Delaware State Employment in the Federal Government Sector

The plot of state employment for federal government employees

has been magnified by one-hundred.times; thus,.it can be seen

that the total employment in the federal government is1much greater

in the other forty-nine states than it is.in Delaware. It 3LS

expected that state levels of federal government employment

increase with national levels, as the effects of increased

government employment filter down into, Delaware's share. The

plots indicate a rapid increase in Delaware's,federal government
employment. from the first quarter of.1966 to the first quarter

of 1968, an increase which also occurred at the national level.

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over the past few years, while federal government employment at

the national level has tended to decline somewhat, employment in

Delaware has continued to rise, particularly.in-late@1972 and

early 1973.

The regression equ ation exp lains the state employment of

federal employees fairly-well, with approximately 88 percent of
the variation in'state employment being accou nted for by the

equation. First, the regression equation evidences a seasonal

pattern in federal government employment which is not so pro-

nounced as in either the agricultural or the manufacturing

sectors above. Second,the level of state employment in the

federal sector responds positively to changes in national employ-

ment, reflecting the filtering down of federal jobs into Dela-

ware alluded to above. The equation indicates, however, that.

Delaware employment in this sector responds with a lag of almost

one year to changes in national federal government employment.

SEFGV 9.1 + 3.000(GNP-2) + .001(NEFGV-4)
(2.41) (3.44)
-84.479(SAWFGV-2) -26.731(QUARTER 1)
(-,.43)
23.377(QUARTER 2) -45.920(QUARTER 3)
(.38) (-.72)
2-
R 879 (Approximately 88% of variation. in Delaware employ-
ment in the federal government sector is explained
by this equation.)
SEFGV ='Delaware employment in federal government sector
GNP-2 = Gross national product two quarters previously
NEFGV-4 = National employment in federal government sector
four quarters-previously
SAWFGV-2 Delaware average wage in federal government sector
QUARTER i Shift variable to account for regular seasonal
difference from omitted quarter in quarter Li
1 in quarter i and 0 otherwise)

Third,.state employment responds positively to. changes in

the level of gross national product with a lag of.two quarters,

as federal expenditures are linked to the growth in national

employment. Fourth, the@average wage in the federalgovernment

sector enters negatively in the regression equation, although the

statistical significance of this particular variable must be

questioned. An increase, for example, in the average wage rate

paid to federal government employees produces with a lag a

decrease in the amount of employment in the state, federal-

government sector.

This preliminary report deals with only one of three

government sectors (federal, state and local). In the future the

analysis will be expanded to cover employment in both the state

government sector and the local government sector (which together

are quite large in Delaware)., Initial attempts at this investiga-

tion have not been as encouraging as are those for the federal

government sector, although work is continuing.

1.7 Delaware State Employment in the Services Industries

The discussion now turns to the consumption sectors of the

Delaware state economy, including services, retail trade, and

wholesale trade. These sectors,, referred to as the regional

sectors of the Delawar e economy, play a responsive-role in the

interactive structure of state industry. Regional Science

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indicates that it is these sectors (or employment in these

sectors) which responds to changes in the other, more export-

oriented sectors of the state economy. In this sense, it. is the

export sectors which play the role of the driving force in the

state economy, which in turn lead to increased employment in the

consumation sectors, as increased demand.for retail productsand.

services trickles down, with a lag, into increased jobs in the

local and regional sectors. However, while these sectors may.be

passive from this point of view, their importance and contribu-

tion to total state.employment and to Delaware personal income

cannot-be minimized. The ability of the state's economy to

sustain increased employment. in the export. sectors depends

critically upon the locally-oriented sectors.

State employment in the services industry has been fairly

stable the last ten years, exhibiting moderate growth both at

the national level and at the state level..in the employment plots

over time, with growth at the national level slightly higher

than growth at the state level. In both instances, however, there

appears to be a strong upward jump in the early '70's, which in

part reflects the increase in the coverage of the employment

statistics. A plot of employment in the state services sector,

over time versus the level of real Delaware personal income over

.time has also been presented. Delaware personal-income is.defined

as the total wage bill plus other sources of income which include

certain transfers,.property income and proprietors' income, and

real Delaware income is calculated by dividing the level of

Delaware personal income by the consumer price index. Real

income provides abetter indication of the actual purchasing

power represented by the state income level. As can be seen in

this plot, the state employment in the services sector does vary

positively and consistently with the changes in Delaware personal

income,, with some allowance made for differences in seasonal

variation inherent with employment series.

SESER -819.537 + 1588.746(RDPY-2) -1678.305(QUARTER 1)
(37.73) (-8.18)
-240.258(QUARTER 2) -1361.018(QUARTER 4)
(-1.17) (-6.83)

2
R 980 (Approximately 98% of variation in Delaware
employment in services sector is explained by
this equation.)
SESER = Delaware employment in services sector
RDPY-2 = Real Delaw.are personal income two quarters previously
QUARTER i = Shift variable to account forregular seasonal
difference from omitted quarter in quarter i
1 in quarter i and 0 otherwise)

The regression equation confirms the close relationship

between state employment.in services and real Delaware personal

income. When Delaware personal income is included in the re-

gression equation along with allowance for seasonal factors, 98

percent of the variation in state service employment is explained

by the equation, and the regression coefficients are all strongly

significant. The dynamic structure of the equation is such that

as state income rises (and Delaware residents have more income to

spend on services,and other it'ems), employment in the services

industry increases, but with a lag of about two-quarters. @Thus,,

i,t takes approximately six months for increased purchasing.power

to betranslated into jobs in this particularsector.. As ex-,

pected the seasonal pattern of the services industry is strong,

dipping down in both the first and fourth,quarters.

1.8 Delaware State Employment in the Retail Trade Sector

Again since the state employment in retail trade has been-

magnified by one-hundred in the plot of national and state employ

.ment data, Delaware employment in this sector is indeed a small

percentage of total national employment, as expected. Stat6,

employment has a strong-positive upward trend in the retail

trade sector, with a slight acceleration of the trend in the last

few years. It appears that retail trade is a strong and growing

sector in the state economy, particularly duringthe early

1970's-. Also evidenced by the graph is adegree of seasonality

in retail trade, again not solstrong as for-agriculture or con-

struction. We have also,plotted employment in the retail trade

sector against real Delaware personal income over time. This

plot again indicates the.strong positive relationship between

Delaware personal income and employment in retail trade as

expected for a regionally-,oriented, consumption sector

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of the economy. In fact, state employment in retail trade is

growing slightly more rapidly, particularly in the last few

years, than growth in general level of-state economic activity

as proxied by the state income series. Like the export sectors

described above, the retail trade sector, then, is also con-

tributing significant impetus to the increase in state income.

Turning to the regression equation, the empirical model has

been able to explain approximately 98 percent of the variation in

state employment in retail trade, with A prediction error of

approximately one percent. The factors used to explain state

employment in this sector are three-fold. First, the strong

seasonality in retail trade is evidenced by the regression

equation. As would be postulated, retail trade is lower during

the,first quarter and higher during the third and fourth quarters.

SERET -10170.722 + .8913(SEWHL-2) + 19998.375(RDPY-2)
(1.72) (10.78)
-1212.857(QUARTER 1) + 231.335(QUARTER 3)
(-.381) (0.73)
+483.645(QUARTER 4)
(1.50)
R2 .97.8 (Approximately 98% of variation in Delaware employ-
ment in retail sector is explained by this equation.)
SERET = Delaware employment in retail sector
SEWHL-2 = Delaware employment in wholesale sector two quarters
previously
RDPY-2.= Real Delaware personal income.two quarters previously
QUARTER i Shift variables to account for regular seasonal
difference from omitted quarter in quarter i
I in quarter i and 0 otherwise)

Second, state employment in the retail trade sector responds

positively to changes in real Delaware personal income but with

a two-period lag as in the service sector. This implies that

increases in Delaware personal income (and thus in the purchas-

ing power) result in increased employment.in the state retail

trade sector, but not immediately, since it takes approximately

two quarters for the increase in demand for retail products to

be reflected in increased employment to help provide the products

to the public. A third factor responsible for the explanation

of variation in the state level of state employment is an

interesting phenomenon hot encountered above in the export,

investment, or government sectors. Within the regional con-

sumption sectors of the Delaware economy there is evidence of

strong interaction effects. For example, state employment in

retail trade responds positively but with a two-quarter lag to

changes in the state's employment in the wholesale trades

sector, establishing a direct linkage between these two regional
sect ors.1 In this sense, employment in the wholesale trade

iThe presence of this intera Iction effect greatly complicates
the lag structure in the retail trade sector as well as in the
state economy as a whole. As seen in the next section, state
wholesale trade employment responds with a lag distributed out
over time to changes in Delaware personal income. This change
in turn affects retail trade employment with a lag of two quar-
ters as noted iri the retail trade regression equation. Thu's the
impact effect of a change in state income upon retail trade
employment is felt directly with a two quarter Iag noted in the
text above and indirectly with a lag distributed out over time
as income changes lead to wholesale trade changes which then lead

sector of economy is a leading indicator of employment in the

retail trade sector. Thus activity which occurs in the whole-

sale trade sector of the industry as goods are being distributed

for sales at the retail level signals increased activity and,

with a two quarter lag, employment at the retail level.

The study of-the retail trade sector is as yet incomplete.

One very important phenomenon from a public policy point of view

is the role that sales taxes play in determining the demand for

retail products in Delaware and thus the need for employment in

this sector. The tax policy question encompasses not only the

policy in Delaware but also the policies of Pennsylvania,

Maryland, and New Jersey, since the presence or absence of taxes

in adjoining states should have an impact upon the demand for

retail goods and thus employment within the state of Delaware.

To date we have not been able to quantify the amount of retail

trade traffic which crosses over state lines into Delaware be-

cause, of sales tax differentials.and what Delaware might be

expected to lose if the sales tax differentials were narrow ed

with a tax in Delaware. Again this is an area for further work

and one for which more data need be collected. Specifically,
data need be collected concerning the level of retail sales

to more retail trade changes. To calcula te the final impact upon
retail trade employment of a given percentage increase in state
income requires the use of a dynamic simulation model and the.
specification of all sectors of the'state econometric model.
Since this capability is currently being developed, we will be
.in a position tolanswer such questions in the ne-ar future..

rather than employment in the state of Delaware on as dis-

aggregated a level as possible.

1.9 Delaware State Employment in the Wholesale Trade Sector

State employment in the wholesale trade sector has increased

along with national employment as evidenced in the employment

plots, although state employment has not kept up with the

increase in national employment. The.slight degree of season-

ality in the series is more clearly evidenced in the national

plots than in the state plots. State employment in wholesale

trade increased in almost a linear fashion from the first quarter

of 1963 to the fourth quarter of 1968. Then it jumped suddenly

in the first two quarters of 1969, leveled out during the third

quarter of 1969 through the third quarter of 1971, jumped again

in the last quarter of 1971, and then reasserted its linear

growth pattern. Also plotted is the.level of Delaware state

employment versus real Delaware personal income. As.in the

retail sector, there is a strong relationship between these two

series, with wholesale trade growing more rapidly than Delaware

income. The wholesale trade sector, while it has no t kept up

with the national sector, still remains a strong source of

growth in the Delaware economy.

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SEWHL -289.344 + .5276(SEWHL-2) + 251.787(RDPY-2)
(3.48) (2.97)
-863.5475(SAWWHL-2) + 423.353(SHIFT) + 40.052(QUARTER 1)
(-1.90 (3.41) (.44)
+ 228.761(QUARTER 2) + 61.407 (QUARTER 3)
(2.06.) (.67)

2
R .930 (Approximately 93% of variation in Delaware
employment in wholesale sector is explained by
this equation.)
SEWHL Delaware employment in wholesale sector
RDPY-2 = Real Delaware personal-income two quarters previously
SEWHL-2 = Value of SEWHL two quarters previously
SAWWRL = Delaware average wage in wholesale sector
SHIFT = Shift variable to account for extension of coverage
in wholesale sector 0 before 1971.4 and 1 after)
QUARTER i Shift variables to account for regular seasonal
difference from omitted quarter in quarter 1
I in quarter i and 0 otherwise)

The regression equation explains approximately 90 percent of

the variation in.state employment in wholesale trade. The explana-

tion centers Around, first, seasonal factors which are not

particularly strong for this sector, indicating that state employ-

ment in wholesale trade is insulated from'the'seasonal changes

evidenced, for example, in retail trade and services. Since

employment in wholesale trade is one step removed from the final

consumption process unlike services and retail trade, it is not

too surprising that wholesale trade is less subject to seasonal

factors. Second, the inertia exhibited in several of the above

sectors is als o present in wholesale trade, as lagged va.lues of

wholesale employment provide a significant.contribution to the

explanation of variation in state employment and past change in

wholesale trade employment can be used, to some extent,,- to

explain future changes in employment..

Third, real Delaware personal income influences wholesale

trade, although.the impact of a change in state income upon.

wholesaleemployment is not so great as in the retail sector

.(about one-third as.great). Again, the wholesale sector, one,

step removed from the final consumption process, is more

iso.lated,than retail trade from outside changes. Since the im-

pact of changes in Delaware personal income occur in state

wholesale-trade employment with a.lag of two:,quarters, changes

in the final-consumption decisions are translated into changes

in employment needs in whole,sale trade only with a lag. More-

over, the lag here is distributed out over,several quarters in

the future, given the above-described inertia in this sector.

About one-half of t he change in empl-oyment occurs after two

quarters, with the rest distributed out over time.

Fourth, employment in the wholesale trade sector is respon-

sive to changes in wages paid for these employees. As.evidenced

by the regression equation, a rise in the average wage level

leads to a fall in the level ofemployment with a lag of

approximately two quarters. From a statistical point of view,

this effect issignificant.

Fifth, the final variable in the regression equationis a

dummy variable to indicate the jump that occurred in state

employment and wholesale trade in the fourth quarter of 1971.

We are still attempting to provide a better explanation as to

why this increase has occurred.

2.0 CONCLUSION: COMME NTS ON THE DYNAMIC STRUCTURE

OF THE DELAWARE ECONOMY

Much of the above material can be summarized in a useful

fashion by considering an ove.rview of the dynamic structure of.

the Delaware state economy. An outline of the dynamic structure

of the economy,is presented in Figure 1. As shown in Figure 1,.

national variables affect, through the regre.ssion models, sItate

employment in chemicals, transportation equipment,other manu-

facturing, construction, agriculture, and federal government.

The national variables include employment (in chemicals, trans-

portation equipment, other manufacturing, construction and

federal government), national prices (for agricultural product6),

and national GNP (which affects federal government.employment).

These flows are shown'in the left-hand portion of Figure 1. It'

should be noted that the impact.of changes in the national

variables is felt on the state variables with a lag, often of

several quarters and often distributed out over time.

At the same time,.as seen in the upper right-hand side of

Figure 1, national wage levels affect state wa ge levels again,

perhaps, with a lag distributed out over time. These, in turn,

through the regression models, affect the afore-mentioned six

sectors of state employment.

Continuing down the table, state employment,in the six

FIGURE I

Elements of the Dynamic Structur6'.of:the Delaware Economy

Chemicals
National Transportation
Employment in Other Manufacturing National Wage Levels
Construction
.1ederal Government
+
National Prices in jAgriculture Employment. State-Wage Levels,
4-
National GNP in. lFederal Government., 'Via the-multi.ple.
Employment regre,s,sion models
:(with a lag
via the multiple distributed out-
regression models ..,-over time)

Chemicals.
Tarf8pottation
T
State Employment in Other Manufacturing
S
(with lags, Construction
distributed out Agriculture R
over time) Federal Government
0
via the state total N
G
wage bill

S
Delaware Personal Income
via changes in the general 'A
S
price level 0
N
Real Delaware Personal. Income
A
via the multiple
regression models
S 01 T
Y
State Employment Retail Trade-4,
in Locally- Wholesale Trade, P time alg
oriented Sectors IServices.*

via cha nges in the total
wage bill
Of
Delaware ersonal Income

export-government-investment oriented sectorsaffects Delaware

personal income, since Delaware personal.income includes the

total state wage bill. Changes in the general price level then

affect real Delaware personal income, which,.via the regre'ssion

models, influence state employment in the regionally-oriented

se ctors of the Delaware state economy illustrating.the primary

multiplier process., These sectors includexetail trade., services,

and wholesale trade. Note that -changes in employment in whole'.

.sale trade.in turn affect employment in retail trade with a lag

distributed out overtime. These changes in state employment,.

again affect real Delawarepersonal income since real Delaware

personal income includes the state wage bill.

At the bottom of the table, an upward arrow indicates that

.as the state employment in theregionally-oriented.sectors

reaffect.Delaware personal-income,, which. in turn further influ-_

ences the state employment in these regional sectors through

secondary and tertiary multipliers.. Elements of strong season-

ality occur throughout the above process as indicated on,the far.

right-hand side of Figure l..

Quickly summarizing, changes in.nationalvariables affect

the Delaware state economy through certain key sectors: chemicals$

transportation equipment, other manufacturing, construction,

agricultural.and federal government, These%changes, then, lead

to further changes in the regionally-and-locally-oriented sectors

of the Delaware economy: retail trade, services, and wholesale

trade. This whole process is complex and takes time as the ef-

fects of change in national employment, prices, GNP, wage levels,

etc., filterdown through the different sectors of the Delaware
L
economy with a sometimes long lag distributed out.over several.

quarters.

The dynamic structure viewed here lies at the very heart of

the general forecasting problem involved in predicting employ-
J
ment levels and.wage levels in the state of'Delaware. As we

have seen, changes in national variables which do affect the,

Delaware economy can be expected to have an influence distributed

out over several quarters. Thus, occurrences today have been

conditioned by changes in the general economic environment which
have occurred in the past.' Untill.we understand the dynamic

structure-of the economy, how these different sectors"feed back

into each@other, what the@time lags involved are, and how these

s'are changing over time, we will not be able to provide.
time lag

a forecasting vehicle which will be reliable. As. a preliminary

.,report, this paperhas summarized some of the major-dynamic

features of the Delaware economy.. It remains now to gain a better

understanding of these dynamic factors, to extend the explanation

to additional sectors and to include some of the excluded

conditions alluded to in the discussion of the individual

sectors'above.

APPENDIX E

DELAWARE TOMORROW COMMISSION MINUTES

October 2, 1974

ATTENDEES:

Francis Biondi Jane Tripp
Clifford Hearn Bruce Hudson
Albert W. Madora Joann D. Slights
John F. Walton Ted.Harvey
James Miller M. W. Krueger
Ed O'Donnell Craig Bickerton
John W. Jardine, Jr. Peter E. Morrow
Robert R. Jordan Joe Conaway
Ross E. Anderson, Jr. Virginia Joy
Russell W. Thibeault William Cohen
Merna Hurd Arthur Kreiger
William B. Keene Thomas Maloney
John J. Ryan Patricia C. Schramm
Stephen Chamberlin Henry Topel
Leon Weiner Fred Krapf
Richard M. Bauer Roland Derrickson
Richard B. Hardesty, Sr. Joseph H. Wyke
Clifford T. Foster Eric P. Sennhenn
James H. Gilliam, Jr. J. Taylor Buckley, Jr.
John E. Malarkey Eric Brucker
Robert J. Berndt Wm. Bradford
Crawford J. Carroll Kurt Christensen
Jack T. Roe William C. Henry
Henry Folsom J. Thomas Schrank
Arthur Wilson Spencer Thompson
W. L. Fritz, Jr. Ernest W. Ryan
Wm. A. Elgie, Jr. George Worrilow
Raymond H. Malenfant John C. Bryson
William Markell Peter A. Larson
John Curran R. W. O'Brien
Dorothy W. Greer John Daniello
Henry J. Ridgely David Hugg, III
Jane B. Aughey David Keifer
N. C. Vasuki Robert MacPherson

Page 1

BIONDI: Good afternoon ladies and gentlemen, my name is Frank Biondi,.

I am the chair man of the Commission an d I have just tried to sheda little

light in here by opening the drapes. I don't want to be accused right off,

of keeping anybody in the dark. -My duty at this time, my sole duty at

this time is to call this meeting to order and introduce to You the

Governor of the State of Delaware, Sherman Tribbitt.

TRIBBITT: Thank you very much Frank, first of all I want to say

good afternoon toyou ladies and gentlemen.

I want to cordiallywelcome all of you to this important first meeting

of the Delaware Tomorrow Commission at historic Buena Vista.

As you probably can see by the large group of people hereassembled,

I have indeed invited a number of.individuals who have agreed to assist the

Commission, as members of its various working committees.

In addition, a sizeable group of State, county, and municipal planning

officials are here to serve the Commission in a technical capacity.

As you well know, I have ap pointed Francis Biondi as Chairman of the

Commission.

Shortly, I will be turning this meeting over to the Chairman, but

before doing so, I would like to make just a few personal comments and

observations.

The Delaware Tomorrow Commission was created by Executive Order Number

48 in June of this,year and subse quently amended by Executive Order Number

53, and just today I made one other change in it, I donl,t know whether

these have been passed out. Executive Order 56 makes a change or two in

PrE 2

the original two executive orders.

I believe, I hope, you have.copies of these two orders as well as

the third copy.

i4ow, why do we have.a Delaware Tomorrow Comihission? Why do we need iT?

What is its mandate? Who are its members? Ho w will it function? What

kind of additional support will it require? In answer to the first question,

why the Delaware Tomorrow Commission and why do we ne ed it?

Delaware's strategic geographical location, immediately adjacent

to the Boston-to-Richmond Growth Belt., poses profound questions concerning

the State's future growth.

The ever-intensifying debate regarding the co-existence of increased

industrial and other development, and the preservation of the State's

rich environmental resources, continues to be waged.

Chairman Biondi, who last month attended a seminar sponsored by the

laware on the "Dimensions of Delaware Development", assures
University of De

me that this debate is far from resolved, especially in the absence of a

Statewide growth policy.

The potential for offshore petroleum operations, and the significant

r
'fications of the U.S. vs. Maine decision are complex factors that will
ami

bring heavy pressures to bear on future State growth policy decisions.

The State must examine these and other important considerations now,

or we will be caught, at the hour of decision, without rational policies

or pians upon which to base our actions.

Time is of the essence.

We must strive now to examine the direction of Delaware's growth.

Page 3

Is the course charted, one which can provide a decent job for every

Delawarean. Can it provide sufficient revenues for the State and its

political subdivisions to effectively function... and at the same time,

preserve and enhance our cherished natural resources, like the beaches,

the wetlands, the quality of our air and water?

We must look at development policy concerning industrial, commercial,

and residential development including open space, recreation and transportation.

We must look at our effectiveness or lack of effectiveness in.

attracting desirable job piwducink industry-Ao-our- State-

The mandate, then, of the Delaware, Tomorrow Commission is to examine

these and other issues, and.to develop a coherent, balanced strategy for

future growth.

The Commission is made up of representatives from public and private

organizations, sharing a wide range of interests.

hopefully, each and every member of the Com mission will participate

with the single-minded purpose of contributing their knowledge towards an

end product which will benefit all Delawareans.

How will the Commission function?

The Commission can only function effectively if each member of the

commission, its various subcommittees and technical advisors, will participate

to the fullest extent possible.

The State, meaning the State government, cannot possibly do an

effective job without the support and commitment of all of you here today.

Chairman Biondi will be working closely with you, aware of the fact,

that your dedicated support of the concept of theDelaware Tomorrow

Commission is the first crucial step in turning the idea into a practical

program to be implemented.

Page 4

I urge your support, and I hope that your efforts will highlight

the kind of close cooperation by the different levels of government which

is so necessary in a small State such as ours.

If we fail to work together, to plan together, then indeed we shall L;

unable to grow together.

Two hundred years ago, a handful of men met in Philadelphia to forge

what was to become the greatest "growth strategy" that man has ever known.

Representatives from our State actively and significantly participated

at these meetings. Now, on the eve of the two-hundredth anniversary of this

occasion, let us, along with the thousands of Delawareans who will sub-

sequently share in this planning process, dedicate ourselves to assuring

that Delaware Tomorrow will be a State that all its ditizens can be proud of.

Before.. I- tiirm-,-tthia.,tipodium_ overr-,lo, Mr.-Biondi,@ I and I see you Mayor

here, and I hope that you have received your copy of the Port of Wilmington

Study Committee,-I hope you have!-sir, and I am in receipt of it and I have

simply issued a press release here giving some substance of it. The

copies of it were made availableto the people assembled here.

BIONDI: We have twenty copies of it.

GOVERNOR: Twebty copies I am told and the Port of Wilmington Study

Committee chaired by Mr. C. B. McCoy wa. s created by Executive Order back

in February and it has been somewhat of a joint participation, not somewhat,

it has indeed been'a joint participation on the part of the administration

of the city, county, and State government. I think.that perhaps what's here,

and I simply make it available because of the significance of the Delaware

Tomorrow Commission today and byreason of be ing a reciprocant of this,

Page 5

make it available to those because I think it's,.if it's not a full brother

or sister, it probably certainly is a first cousin.

Secondly, I would like to announce for your information in addition

to the Gather Committee Report, study report of the year to Lodine Gather,
Iff
I forget the exact name of the committee at that time that he chaired.

The General Assembly, as I am sure a lot of you know, did indeed pass Senate

Bill 257 with it's several amendments. The prime sponsor I believe was

SenatorBerndt. I had not until now appointed that committee to establish

a Delaware Deep Water Oil Terminal Committee and thatl.s what the act

basically does. When it got through with it's many amendments it was

amended to the extent that there was no public,funds created in that act

for that committee to work with, but it is indeed a lawful committee and

I signed that piece of legislation. I want to announce today that I have

appointed to that committee in compliance with the act itself, Senator Berndt

to be the chairman, the required four members of the General Assembly of

the two political parties Senator Berndt, Senator Zimmerman, Representative

Knox, Representative Matushefske,.- J. Madison Nelson is a New Castle County

member and some people may or may not, that are here, may be learning about

this, maybe my office hasn't been able to be in contact with you. We are only

hoping you will accept. Arthur Wilson is a New Castle County member, Mrs.

B. Blades Derrickson is a Kent County member along with Lt. Governor

Bookhammer and Mr. Vincent Brittingham our Sussex County member and the two

environmentalists are Mr. Gene Trumbore, and Mr. Wm. S. Ingran Jr. In a

further step the College of Marine Sciences was requir ed to appoint three

people and they had that prerogativeand the names submitted to me by the

Pacre 6

College of Marine Sciences are Dr. Robert S. Biggs, Joe M. Boodman, Dr. Gerald

J. Magone, if I am pronouncing that correctly. I only make that announce-

ment because at this point I had not yet nominated that committee and it

will certainly have some relationship as far as I am concerned with the

Delaware Tomorrow Commission by reason of the very nature of it's creation

having to do with an oil terminal in an off-shore oil ter minal. Now, Francis

I am about to turn this conference over to you, I want you to be mindful

of the fact that I am not giving you an easy job, but I know that given

the kind of people gathered here this afternoon, that I am not giving

you an impossible job.

I would hope that your interest would continue after today. If we

have named anybody to the Delaware Tomorrow Commission at toiday's meeting

who does not feel the significance of it then feel free to so state your,

wetve nominated you, we've named you and we want you to serve,,but we don't

want you to serve if you think that it's of no value or that your interest

is lacking because with the interest lacking we can't serve a purpose that

we want to deal with. I feel confident that Chairman Biondi will know who's

attending, he has been very active about that kind of thing with the Delaware

Agency to Reduce Crime and the people who won't participate, Frank says he

can't use you. I would imagine you would feel the same way in this kind of

a venture with the Delaware Tomorrow Commission. I want to thank you personal-

ly, each and everyone of you, for taking your time to be here. I'm looking

as Governor, I am looking for a contribution here that will be meaningful

not to this administration but sincerely to the people of the State of

Delaware, that's the sole purpose.

Thank you very much.

Page 7

BIONDI: Thank you Governor. For the record I guess we ought to make

.it clear that you did give me.this job, you didn't ask me if I'd like to

have it. As I recall the conversation, I received a telephone call from

your counsel, Mr. Carey, saying "Are you interested, in growth in the State?
I said yes and I went home that night and my wife said "I" just got A call

from Mr. Carey. He said to tell you you've been, since you're interested, you've

been appointed.Chairman of the Commission. I asked him if he would like to

speak to you but he said no." Here I am today. The Governor has stated

broadly the purposes of the Delaware Tomorrow Commission, I'd like tobriefly

outline some of its more specific.responsibilit.ies and there are five as

we see them at this time. They are the following:

First of all to determine what the State government's historical.
experience has been in regard to growth.

Second, to determine..how effectively State government is currently
responding to growth.

Third, to determine alternative ways that the.State government can
provide for effective growth.

Fourth, to evaluate the potential impact of various growth alternatives
in the private and the public sector.

Fifth, to recommend to State government, policies and strategies for
effective and rational growth in the residential', commercial, and
industrial:area.

In addition to the purposes as outlined by the Governor and these

specific responsibilities as I have outlined them now there is a broader

purpose also which is involved in the first two, which is to be served by this

Commission if it serves any purpose. And that is to raise the level of

@public.discussion in.this State with respect to the problems of growth,

to raise the level of public discussion by indepth study of the problems.

.-Governor-Ttibbitt mentioned that there was a conference at the

University of Delaware on September 12 which I attended, and very frankly,

Page 8

the conference in my judgment could have been held two years ago and the

statements made wouldn't have been any di fferent. It did not appear to me,

although eve;-yone was citing the News Journal articles .. as the basis for

the discussion, that too much attention had been paid to some of the factual

problems which have been raised - the lack of data, the lack of information,

the lack of fattual judgments which could be agreed upon by varying parties

with respect to fundamental issues.. There is a problem and there has

been a problem in the public affairs of this State as I have seen it for a

while, and that is we sometimes rush to judgment without the same kind of

analysis that we would give in private affairs to questions. This has happened

in connection with recommendations with respect to taxes and other policies

in the State. I think that if the Commission is going to serve a useful role

one of the fundamental things we oughtto do is look at the facts, look at

the problems and try to arrive at judgments with respect to those problems

that reasonable men, given their varying interests, will recognize as

factually supported.

Now, as an idea of the kind of problems we ought to look at, two members

of this Commission have indicated areas of interest which they would suggest

for the Commission. I am not saying that these should be the areas of

interest for the Commission specifically. It seems to me that the kind of

questions the Commission is going to have to address itself to.

Mr. Thompson, Spencer Thompson of ICI, was kind enough to look at the

Commission's charge and to suggest that, in view of his experience with

the Greater Wilmington Development Council, there are three broad questions

@that we ought to look at:

Page 9

(1) What changes in the work force of Delaware should be anticipated.
and planned for in the next ten to fifteen.years? What changes
will come about as a result of population growth and migration?
Whateffects of more education, what affects on attitude towards
work?
(2) What changes should be expected in job a 'vailability? Will there
be an accurate growth in a number of job opportunities with
the existing businesses in the State? If new industry is needed
in order to provide job opportunities-for projected changes in
work force, what kinds of industry are needed? Where should the
new enterprises be located?
(3) What is the climate of the State in terms of it's appeal to the
kinds of new industry which should be attracted to Delaware?
(having first made the judgment as to.what kind of industry we
need in the State and what changes in that climate are needed).
Related to this question, are there serious taxation or fiscal
problems in the State? Whatis relative quality of governmental
services in Delaware as they affect potential new employers?
What is the quality of other essential ingredients for new
business in Delaware; land resources, water resources, labor
resources,.etc? What do our leading banks and business institutions
in the State think about the climate?

These are the broad questions that Spencer has posed as matters which

are the proper business of the Commission. Another member of the Commission,

Mr. Vaughn, Jerry Vaughn, who is coordinator for Community and Resource Develop-

ment, the Delaware Cooperative Extension Service, University of Delaware,

College of Agricultural Services, who also served as Chairman on the State's

Council of Industrial Financing, has voiced some relevant issues. In a

recent letter to Governor Tribbitt, after discussing the tax problem in the

State, dtated; "reserving judgment on the tax question, I f6el undue emphasis

on it and amending the Coastal Zone Act diverts,ourattention from,other,

much more important needs in strengthening Delaware's economy. As I see

it our needs are'in order of priority:

(1) A plan for continuation of Delawarets threatened rail service, or
development of,acceptable alternative transportation.
(2) Expansion of Wilmington's port.
(3) Massive publicity stressing Delaware wants new business and
industry; that we have a well-trained, highly productive labor
force and excellent schools and training facilities, and that the
Coastal Zone Act limits only certain types of industry.
(4) An industrial development policy and funds for the State to launch

Page 10

a substantial program and selective recruitment of desirable
target industries.

(5) A plan for meeting long term energy needs of Delaware business
and industry.

(6) Streamlining the exceedingly cumbersome and time-consuming zoning
and other permit procedures of some jurisdictions.

(7) Great improvement in water, sewer, and housing in.industrial
parks.

(8) Assembly of a larger and more varied inventory of prime industrial
sites with zoning, utilities, owners willing to sell or lease,
ready in advance, an industrial land bank.

(9) Funds for 'Tantas type" industrial surveys showing specific
improvement needed in each community to attract industry.

(10) Less conservative lending to business and industry by Delaware banks.

(11) More eventual capital for stafting new companies.

(12) Change in anti-industry and anti-tourism attitudes in some
communities.

(13) Prevention of detrimental loss of serviee at the Greater Wilmington
Airport, and the final recommendation,

014) Possible modification of our taxes to encourage new business
and industry.

Well, I think both of these gentlemen have put their fingers on a

series of problems which we ought to address in this Commission.

Generally, I think what we are looking for is the answer to the conclusion

which was reached in the News Journal series of articles published this

past year, where, after talking about the tax problem, the writers concluded,

Tractually Delaware's growth seems more hamstrung by first, official
indecision over whether the State would benefit from further
growth, and beyond that, whether we want white collar or blue
collar workers to locate in the State. Next, failure to promote
the State or to advertise it's advantages. Next, an unwillingness
to commit the necessary funds to embark upon a serious campaign

Page 11

to attract new business. Next, a lack of coordination Among
governmental agencies in processing cases involving firmus
which are interested in locating in Delaware- Finally,
a benign attitude on the part of business and industry
already in the State in connection with efforts to lure new,
employers. These in addition, of course, to the squabble
over the Coastal Zone as it has been described in-the past."

If there is anyone standing, I think there. are some additional seats

in the room here. Would you like to move in? Okay, I see Tom Maloney sitting

in the corner there.

.Now, in attempting to approach a problem this.broad, there are serious

problems as I look at it. The prittary conclusion the Commission might

reach is that the problem's too broad'to attack. In.any-event, it.'s like

any other problem.

When I start out in negotiations with Tom Ma&oney for the police or

the fire fighters I've got a list of fifty demands of what I want in the

contract. He's got a list of fifty things he wants to.take out of the

contract, and we both think it's hopeless at the beginning but as we move

on the specifics of the proposals one and two and start hammering them

out either one of two things happens and this is what I think will happen

here. If reason, moderation, and good judgment prevail,@ either men of good

will agree on common facts and arrive at solutions or power prevails and.

the solution is in a different direction. In any event we.are going to come

to some conclusion about this problem, and I think that we ought to, rather
than worr@ about how broad the problem is, really start hacking away at it.,

Perhaps we'll come up with some solutions.

Now, let's talk about who's here in the room for a.minute. We have,

first of all, members of the Delaware Tomorrow Commission in the room

Pagp@@12L

s of the Commission w
and these are the thirty-one member ho represent

a broad spectrum of public.officials and persons from the private sector.

Secondly, there are people in.the room who are members of the three

committees of the Commission and the committees are the Committee on

Economic Development, the Committee on Land Use and Community Development,

mm
and three, the Cost of Public Services Co ittee. Now, the first thing

that we ought to explain is perhaps, why these committees?

When I looked at the list of Commission members, and the list when I,

looked at it was twenty-seven - twenty-eight and now it is, thirty-one, it

was evident that all the people in the State who had expertise, who had

experience, and who have something to say and something to contr ibute about

these problems could not be placed on a single commission. Secondlj, it

was obvious that the Commission itself was top heavy with State officials

and although the State officials reportedly 1 ike to give themselves advice,

the advice they often get in those circumstancesis n9t-the best.

Next, we felt that a Commission of this kind operating with twenty-five

to thirty members might result in a percentage of the thirty people,

fifteen or twentyT maybe twenty-five of.the thirty people getting

together, listening to arguments, old arguments, as they have in the past

and as all the committees in the past have.done in this State without any

,indepth work being done by the committee and all we are going @o get fr om

that is a summation of what the past arguments have been and I believe we

could
all sit down and do that at the present.time.

In an effort to broaden the base of-the Commission, to get people

active in the process who weren't on the Commission andtb channel the work

of the Commission, it was decided to create three committees, as I have said

the Land Use and Community Development Committee, the Economic Development

Page 13

Committee, and the Cost of Public Services Committee. Now at this point we

are nGt married to this committee structure, we hardly are even engaged to

it. We want the Commission to consider whether or not the structure which

has been suggested is the proper structure for proceeding.

So we have with us today members of the Commission, members of the

three committees who are not members of the Commission, then we have a

Technical Advisory Committeepresent. The Technical Advisory Committee

consists of Mr. Keifer, the Chairman, of the Delaware State Planning Office;

Mr. Elgie, Planning Director for Department of Highways and'Transportation;

Mr. Daniello, Community Affairs and Economic Development; Mr. Vasuki, Director,

Division of Natural Resources and Environmental Control; Mr. Bauer, Director

of the New Castle County Planning Department; Mrs. Hurd, Director, Office

of Water and Sewer, New Castle County; Mr. Peter Morrow, Director, Depart-

ment of Commerce,.City of Wilmington; Mrs. 'Schramm, Director of Planning, City

of.Wilmington; Mr. Marshall, City Manager of Newark; Mr. Cohen, Planner,

City of Newark; mr. 0 1 D@onnell,,, Director of WILMAPCO; Mr. O'Brien, Director,

Kent County Planning and Zoning Department; Mr. Fritz, Kent County Engineer;

Mr. henry the Sussex County Engineer; Mr. Derrickson, the Director of Planning

in thatcounty; Jack Roe, the. Acting Planner of Dover; Mr. Hardesty, the

City Manager of Laurel.; and Dr. Jordan,, The State Geologist.

That's the membership of the Technical Advisory Committee. Now,,

why this Technical Advisory Committee? Well, first. of all, this group I've.

just named, they constitute and represent the support staff for action

that'is going on-in the cities and in the counties of this State with

respect to questions of residential,.commercial, and industrial growth. They

are the people working at.the policy level in the local 'subdivisions and I

believe that there can not be a meaningful State policy.with respect to

Page 14

residential, commercial, and industrial growth, unless it is coordinated

with the programs, policies, and actions which are taking place at local

level s in the State structure We are a small State, come right down to

it we are almost a small ne ighborhood by comparison with other states, but

there is a plethora of jurisdictions and it is my conclusion that to proceed

with a Commission of this kind to try to develop State policies without

the participation and the input of these policy makers on the local level

is just to waste time.

As an example of the need in this area I have cited in the previous

meeting, I am not go ing to do it in any detail, Mr. Daniello, the Depart-

ment of Economic Development Secretary has a Fantas study going on.which.

is supposed to look at the kinds of industry which might be interested in

locating in the State. Mrs. Hurd in her office in New Castle County, which

is part of Mr. Madora's office, has a 208 plan and she receives $1.2 million

I think she has more money than any of us from the feds - she has an

industrial growth study going on for New Castle County as a part of that

plan. I noticed in the press that Mr. Slawik has a conference scheduled

on growth problems and I know that Mr. Folsom, the president of the council,

has a growth committee over all for New Castle County. Now, somewhere

we ought to try to put this all together and get the data, the experience,

the knowledge, and the policies, the plans, and the programs together in.

one place. If we are going to have some kind of a consistent policy

in the State at all, it would have to be consistent with what is going

on locally, and in order to be consistent, or in order to influence

a local policy or vice versa we first of all have to have all the facts on

the table. As I like to say, I like to play with a full deck. Now, all

Page 15

of these people have agreed to cooperate. -One meeting has been held and I

know some of them have raised a question of what really do you want from

us? I tried to articulate it at the last meeting. I can perhaps sum it up

a little better at this point. Initially what we want from the Technical

Advisory Committee is the following:

First,aaniinventory of all plans and planning studies previously done
at their levels which are relevant to the work of this Commission.

Secondly, an inventory of all the studies relevant to the work of
this Commission that are in process - I don't.believe that John
baniello ought to be hiding from the County what's going on in the
Fantas Study and I don't think the County ought to be reticent about
letting the State know what's going on in their study.

Third, we need an evaluation by these people of the significance of
these past and present studies. In addition we need an identification
of the ordinances, resolutions, rules, and policies atthe various,
levels of government which support, and which impact on growth, both
residential, commercial, and industrial, and we need their assistance
for the committees.

Now, I think each of you has received a little pamphlet of this kind.

Do you each have that? Now, first thing you have in that pamphlet is the

members ofthe Delaware Tomorrow Commission, following that, and that

occupies one, two, three, four pages and by looking at these first four

pages you can see who the members of the Commi ssion are, who the Governor's

appointments Are, who the'legislative appointees are, and can familiarize

yourself with your fellow members. On the.fourth page it is indicated

that Clifford Hearn, Esquire is going to serve as'secretary to the

Commission. I would also advise you at this time that Rodman Ward, Esquire

of the firm of Prickett, Ward, Burt, and Sanders has agre@ed to serve as counsel

to the Commission and will be working with me, and the primary reason for.

that is, he's the guy that recommended,to Carey that he recommend to Tribbitt

Page

that I be Chairman. That he should get off for nothing is intolerable.

Rod has a great interest in this area and I am sure that he will be

very helpful. Now, following those lists of the members of the Delaware

Tomorrow Commission, you find the members of the committees - the Land

Use and Community Development Committee who are not members of the Commission,

the members ofthe Cost of Public Services Committee who are not members

of the Commission, members of the Economic Development Committee who are

not members of the Commission. The final page is an addendum which indicates

three additions to the Cost of Public Services Committee: Dr. Markell of

.the University, Dr. Brucker of the University, Mr. Madora who is the

Director of Public Works for New Castle County. There also are indisated

three members of the State Planning Office. One person for each committee

will be nomi nated from the State Planning Office. Mr. Hugg of the State

Planning Office will work with the Land Use and Community Development

Committee, Mr. Hudson will work with theEconomic Development Committee,

Mr. Fisfis will work with the Cost of Public Services Committee. These

committee assignments are coincidental with their areas of knowledge and

expertise in the State Planning Office.

Now, going back to the front page of the Delaware Tomorrow Commission,

persons and organizations, named by the Executive Orders 48 and 53, all the

members of the Commission are,assigned to one of the three committees and

the committees will consist of the members whose names appear as committee

members who are not Commission members and the following members of the

committees. Now if you want,to take your pens, I'll go through the list

of the tentative assignments and we say tentative assignments of the members

of the Commission, the committees, because if any member of the Commission

feels he can serve more valuably on another committee that that to which he

Page 17

.has been assigneA9 ihii's@'tine. Abd' also. ir @ou@ have rec.om'mendation-'@s" wiffi
respect";i6 other pe6pld'f6r the c i t"i
6mm't ees.themselves I'll be willing to hear those.
Starting with the persons, organizations, named by Executive Order.,

No.'s 48 and 53, and I'll just use the last names here so we can move on:

Mr. Stewart, Cost of Public Services;,Mrs. Tripp, Cost of Public Services;

Dr. Worrilow, Cost of Public Services; it will be Mr. Larson for Mr. duPont,

'Land Use and Conmunity..Development;,Miss Greer, Economic Development;

Mr. Davis, Cost of Public Services; Mr. Campanilli or his delegate, Cost

of Public Services; Mr. Ryan,-Economic Development;.Mr. Slawik, Land Use

and Community Development; Mayor Malone, Economic Development; Mr. Daniello,

Economic Development; Mr. Schrank, Economic Development; Mr. Hall, Land Use

and Community Development; Mr. Hill, Land Use and Community Development;

Mr. Adams, Economic Development.; Mayor Carroll,.Land Use and,Community

Development; Mr. Twilley, Land Use and Community Development; Mr. Keifer,

Cost of Public Services; Mr. Bryson,.Economic Development; Mr. Ziman,

Land Use and Community Development. Turning to the next page, Gubernatorial

-Appointments; Mr. Walton, Economic Development; Mr. Krapf, Economic Ddvelop-

ment; Mr. McCoy, Economic Development;, Mr. Folsom, Cost of Public Services;

Mr. Gilliam, Land Use and Community Development; Mrs. Slights, Land Use

and Community Development; Mr. Weiner, Cost of Public Services; you may

want to switch that last one. Where is Leon?, Okay, the. legislative

appointees; Senator Cordrey, Land Use and Community Development; Senator

Berndt, Cost of Public Services. Right. off let me..make two-switches: Mr.@

Weiner to Land.Use and Community Develgpment,.I've had the benefit in the

past of his erudition on this subject, and Senator Berndt to the Economic

Development Committee; Senator, is that satisfactory with you?

..@BERNDT: Fine.

P a

BIONDI: Representative Seibel to the.Cost of Public Services; Repr&--

sentative Kenneth W. Boulden, to balance these committees, the Cost Of

Public Services. Okay, does anyone have any questions as to what sub-

committee he is tentatively scheduled towork with? Okay. Now, let.me at

this time just give you a general overview of the functions of these three

subcommittees.

First of all, thi-s i-%,Just%-pte@l@imizat-y,-.-!i-nWe-want@ the

themselves to stake-out their areas of interest, their areas of concern. The

purpose of appointing people to these subcommittees who have expertise,

who have experience, who have learning with respect to these problems

the benefit of that learning and we expect the subcommittees to meet and

discuss at length the problems that they will tackle individually. Pre-

liminarily the Land Use and Community Development Committee should really

deal with the geographical distribution of development throughout the State.

Particularly, what amount and type of development is likely to occur in the

various areas of the Stata" What amount and type of development is desired

in'the various areas of the State? What public services and facilities are

currently available to serve growth?. How much growth could be accommodated

without additional services and/or facilities? What policies, if any, should

be adopted with regard to resource areas, for example, aquifer:or'recharge

areas? What are the relationships be tween official development policies and

actual development? Economic Development.Committee should take a look at

proposed growth goals with respect to population and employment, to propose

growth targets, to review growth in the recent past. What is the impact

of the tourism industry? What will be the impact of Outer Continental Shelf

Page 19

development? What is the potential of transportation advantage over the

northern New Castle, in northern New Castle County? Impact on the corridor

area, the Penn Central matters, Baltimore and Ohio railroadg, New Castle

County airport? These are real problems, and of course, the Wilmington Port

Study I believe should become an integral part of the review of this

committee. As in many areas a lot of studies have been done. Let's take

one area of taxation. Well, we'll take that up later but let's just talk

about the Wilmington Port Study. I don't think there's any need for the

committee to review in depth that problem., I think the committees should

review the recent report and, if it agrees with that report, make it a part

of its recommendations. But we have to make use of studies that have been

done in the past. We just can't let them sit around.

In the Cost of Public Services Committee there are a number of areas

which have to be considered. You have to consider the public sector cost;

the proposed types and levels of growth; the cost of government today;

the aggregate public sector investment policy today;:State and local

policies with respect to taxation including property assessments; structure

of taxes in Delaware on a Statewide and local level; the State government

debt policy; per capita cost for services that are population related; user

fees vs. general tax revenues, and the,role of the State government vs.

local government in financing services, particularly in light of the national

policy in revenue sharing and block grants.

We're going to suggest that these committees meet bi-we,ekly, if

possible, from now until January of 1975. We would like the committees to

meet bi-weekly from now through January,.and we would like the committees, and

we'll discuss this later in the meeting, to hold public hearings, attempt

to hold them in the most meaningful fashion. I'm not going to suggest how

the committees should proceed but we would.ask you to take into consideration,

proceeding as some of the committees proceed on a federal level. advising

people when the committees are going to meet,and asking people who would-desire

to be heard to present their statements in advance so that they can be

reviewed and studied and meanihgful questions asked at the meeting. Every-

body will get a chance to put their arguments on the record. The arguments

haven't changed much, the arguments are pretty well known. What we want

to do is have some meaningful study and some meaningful work done here.

We hope that if the committees may meet on a bi-weekly basis between now and

January, the committees will then report to the Commission. The Commission

starting in February and March should try to coordinate, summarize the findings

and the recommendations of the committees. They should also form at that

time a legislative committee to help prepare various proposals, draft

legislation hased on policy recommendations of the Commission. We hope to

issue a draft report in April, and conduct hearings with respect to the draft

report at that 'tiineq- and at the present time we are looking forward to

presenting a report in June of 1975,

four of the Governorts Executive Order which provides that this Commission

shall submit to the.Governor in a General Asse mbly by June 1, 1975 its

findings and recommendations, the-fi-nal dttijj-*a_.as'f-to.@t'he date@ 7n-

of submission of the Commission's findings shall rest with the Commission.

I believe we are going to have to measure the date of our final submission

by the quality of the work we do in the interim period and I'm cognizant

of Bill Bradford's comment to me that if we just identify the problems by

June of 1975 we'll have made a contribution. I'm not usually optimistic, I

am not optimistic now, but like when you are writing your brief, it may be

one hundred fifty pages but the first page is the toughest to write.

Page 21

After that, they start fal ling.

Now, there are two other items on the agenda this afternoon, and one

of which is the most, well perhaps they're of parallel importance. We've

talked about the organization of the Commission, it's.committees,.the member-

ship, the reason for the committees, the reasons for the Technical Advisory

Committee. We've talked about the designation of the membership of the

committees. Welve'talked generally about the function of the working.

committees. I've stated we've talked; we haven't talked - I've talked

you've listened. There are two other items on the agenda which are going

to.be important. There has been prepared a documententitled,."A Survey

of Popular Attitudes Towards Public Affairs in Delaware" by the.Oliver

Quayle organization. The results of that poll have been put together in

the volume. We have a representative, I believe Mr. Lovell, of that

organization today, who is going to summarize their findings and each

of you will be py of this report at the conclusiongof thismeetin
given a co 9.

Is that not the case, Dave?

KEIFER: Yes.

BIONDI: Each person will receive a copy of the report at.the conclusion

of the meeting.

Basically the thought here was to find out, what are people thinking

about the State's problems today. I d,on!t think what they are.thlinking is

determinative. Our business should be as I see the principle focus of this

Commission- what is the role of leadership; what should the people be

thinking; what should we be talking about as public officials? Now, that

this survey has.,been done, we're goingto have a presentation of.it,.

and following that we are going to have an.open discussion. The open

Page 2-2"

discussion will concern anything that's on your mind, including the purpose

of the Commission, the committees,.the organization, anything that is said,

and the report on the survey of popular attitudes towards public affairs

in Delaware and anything else that members of the Commission believe is

relevant. Is Mr. Lovell here at this time?

LOVELL: Good afternoon. We've conducted two surveys for the State of

Delaware, one was done in February, it was in person, five hundred respondents

throughout the State. An example was not drawn initially to give a precise

,reproduction of the population distribution within the State, but rather

was intentionally off balanced a little bit to provide sufficient number

of respondents in each of the four areas of the State: The City of Wilmington,

New Castle County outside of the city, Kent County, and Sussex County.

There were one hundred interviews in Wilmington, one hundred in Kent, one

hundred in Sussex, and two hundred in New Castle County outside of Wilmington.

In order to obtain an accurate reflection of the Statewide population, those

four groups of interviews were mathematically weighted on computer to their

appropriate representation in the State. That makes New Castle County

interviews, in terms of the figures we present,.represent, fifty-six percent

of the adult population of the State. Those personal interviews lasted from

forty-five minutes to seventy-five minutes with each respondent. The time

varying mostly in terms of what the respondent had to say rather than how the

interviewing was conducted. The interviews were conducted in mid-February.

That's important because the attitudes of the public are influenced 'very

significantly by what is being reported in the media, what's going on. If

you'll recall in February, the energy crisis was one of the major issues.

Page 23

Gas lines, it was during the actual field period that alternate day sales

of gasoline was established in Delaware. There.werehot line information

services established in Kent and Sussex County during that period. There

were considerable tension and even some fights reported in,the news media at

gas stations w ith people trying to buy gasoline. Naturally that situation

was reflected in the data. There is an unusually high level of concern

reflected about the energy crisis. We did, in addition to that original

survey, follow-up interviews by telephone,with, original respondents in June.

We-re@-contacted two hundred seventy,or about fifty percent of the original
respo-ndents,-and reititerv'iew6d- them. We asRe&@zkany ofl-@ the asame queit?Lenzubut

we asked some new ones in addition to fill out some areas that werenit too

clear in the first survey to measure some additional developments. That too,

involves mathematical weighting on the computer to relate an,accurate cross

section of the State population. You will get a copy of,the report that has

been prepared on the survey. I won't cover everything in it because there is

considerable detail, particularly on the demographic analysis. Welve looked

at the attitudes of the population by area, by race, by age, by income, by

sex, by religion, by voter registration, you name it, we looked at it.

There is a conside rable amount of that kind of detail in here. I will

concentrate on pointing out some of the highlights.

First of all, we did an initial evaluation of how the people.of Delaware
feel about the State. What kind'of a place is it to live? We asked three

questions:

U) How does the quality of life in Delaware compare to four or
five years ago?

(2) How does it, I'm sorry, what do you expect to happen in the.next
four or five years? Will quality of life in Delaware improve or
grow worse?

Page 24

(3) How does the quality of life in Delaware compare to states that
you are familiar with?

Thirty-six percent of the population Statewide feels that life in

Delaware has improved. Twenty-three percent said it was abo ut the same.

Thirty-seven percent said it had grown worse, four percent not sure, no

opinion. In effect there are almost two equal groups. Thirty-six percent

who feel the quality of life has improved, thirty-seven percent who feel it

has gotten worse. The patterns vary by area to some extent,.particularly in

Yilmin ton where the people feel@ the.queaity of47-lifeshoLs-grown- the
9

past four or five years. It is particularly blacks who feel that the quality

of life has grown worse. �txty-two percent of the blacks with an opinion

-now, than. cbmpiared. to.the past- In four _or- five years
feel it s, think, it@; 6worse

thirty-six percent think the.quality of life will be-even worse than it is today.

Thirty-three percent thinki-it will be better. Similar patterns, blacks

n whites
and residents of Wilmington ar e more inclined to be pessimistic tha

or residents of other areas of the State. Particularly in Kent County there

is a high level of optimism. More than half of those with an opinion feel

that the quality of life will improve. As compares to other States, exactly

half of the respondents Statewide think Delaware is a better place to live

than.other states. Only ten percent think it is worse than.other states.

The conclusion that we drew from this is that, first of all compared to

other surveys that we have conducted in similar states, there is somewhat

lower opinion of the State in terms of the past and expectations of the future.

However, it's a moderate concern as witnessed by the fact that people do

generally think triat the State will be improving. Now, I can't comment on

the validity of that belief whether it is a reasonable beiief or not, but

that's the way the people felt at a given point in February.

Page 25

certainly, that's about as high as Vve ever seen itin this kind of a question.

Need for higher wages four percent and scattered remarks in the same area.

The third problem; crime, drugs, and law enforcement volunteered by twenty-six

percent. Most of it along the lines that we need stricter, tougher judges-,

courts too lenient. We.need more police, need tougher laws, enforce the

laws equally for all, stricter drug laws and enforcement.

Taxes.and spending was volunteered fourth in.priority by twenty-five per-

cent. Taxes are too high nine percent, need more careful spending of taxes

ten percent, more equitable tax stritcture neededt nine -percent.

Land usage and the environment was next. Fourteen percent mentioned.

something in that area. This is on a volunteer basis remember, five percent improve

usage of land, better planning, stronger zoning, five percent keep and enforce

the Coastal Zone Act; four percent clean up the environment, stop pollution,,,

Education - concern in.that area volunteered by twelve percent, most

of it a rather general improve the quality of education.

Race relations - something in that area volunteered by eleven percent,,

unfortunately, most of it, nine percent, carrying anti-black connotations:

get the black chiselers off welfare, eliminate school busing, reinstat@!

separate but equal policies, no mixture of races.

Concern about the problems of the elderly, volunteered by.,nine percent,

most of it well scattered. Do more for the elderly in general; raise social,

security, hardly a State problem; lowertaxes for older people.

Other problems were mentioned by less than ten. percent including 'roads

and highways, eight percent; more public transportation, seven percent.

State government administration concerns about corruption and excess employees

DY Six percent welfare, five percent; health, five percent; parks and

recreation, fourpercent; housing, four percent, moral climate, particularly

Page 26

We asked a consider able number of questions about problems, issues

that may be of concern to people, we tried different techniques, from

general to specific and from a Volunteered kind of approach to a multiple

choice kind of approach. The first question on the area of issues, we

asked resid ents of Delaware to tell us what they perceive.to be the problems

confronting the State. The problems they would like the State government to

do something about. There was a wide range of problems volunteered as is

customary with a question like this. One problem that was mentioned most

frequently was the energy crisis, forty-five percent talked about that.

I've already mentioned that we were in the midst of the energk ci-isis in

February when this question was asked. We have seen on the telephone

follow-up -survey in June among other questions a reduction in conc2rn

about the en6rgy crisis, which is not surprising, but as of February the

top issue was the energy crisis. They covered. a lot of ground and specific

kinds of toncern@ Tliie.yworried about the availability of gasoline, about the

Possibility of rationing, the distribution of sale of gasoline, the cost of

energy services, g4sollne, oil, electricity, coal.. . Some were worried about

a deed a shortage or was it a
the truth of the ene rgy shortage, w s there in

scheme to get higher profits? The second most frequently volunteered concern

was in the area of bread and butter problems. Thirty-nine mentioned someth,'ng

in that a2@ea. Specifics, the two major Ories w6re, the cost of food is too

high, and the cost of living is too high. These are not perhaps problems that

are readily accessible to S-tate action; but.nevertheless, those were the

concerns and people do look to the State government for some assistance or

action in tnat area. In addition to that, only eight percent mentioned a

need for more jobs or more industry. That in itself is not unusually low,

Page 27

pornography, two percent.

Some general comments about these, first of all the level of concern

about the economy we have seen since that survey and other surveys is rising

steadily, Which will surprise no one I'm sure. It.was volunteered by thirty-

nine percent in February and at that time, that was fairly high, in our

experience in other states.

In State issues we have not seen much concern of that level. Crime,

drugs, and law enforcement volunteered.by twenty-six percent was at that time

a little bit lower than we usually find it in State surveys, it is in our

experience, continued to decline in importance quickly in relation to in-

creasing concern about the economy. Taxes and spending,.volunteered by

twenty-five percent, again that's not a.particularly unusual one, but it'sa

little bit lower than we've seen it in the past, there is further information

we'll come to regarding each of these issues, I should point out. We will

find further on taxes and spending that there is an unusual ly, or was at

least, an unusually low level of concern about the amount people pay in,

taxes in this.State. We have some information that helps explain that.

Land usage and the' environment, volunteered by fourteen percent,

that's fai3@ly high for a volunteered issue kind of concern. Most people

don't think inthose terms when they're asked to speak off the top of their

heads.

Educatioil,.tw6lve percent is fairly low, on the otherhand, we

frequently find it come up much higherthan that.

Race relations, is not unusual. Aid to the elderly, on a volunteer

@basis at least is not unusually high but1there is further ind ication elsewhere

that there is a high level about that. T.here is some variation in concern

PaLl @ 28

by area of the State, as it would be expected,, aside -from thd -energy Crisis

which I don't think is worthy of a great deal of attention at this point is

because of the change in the situation since then.

Economic concerns were particularly high in Kent County, fifty percen-

speaking of those. They range from thirty-three percent to thirty-seven

percent in other areas of the State.

Concern about crime, drugs, and law enforcement is particularly high

in Sussex County forty-four percent vs. twenty-six percent Statewide, lowest

in New Castle County outside of Wilmington. Interestingly, the concern is

not unusually high in Wilmington itself. We,will see shortly th at there

is.some indication that there*is a highlevel of concern indeed in Wilmington,

not that the problem is that close to the top of their minds so that they

think of it off hand when asked to recite the problems that they think are

important, but when they are reminded of it, they are concerned about it.

Tax and spending is low. I've covered those already. In addition we

handed response lists of thirty-four subjects, issues,,problems, we asked

them first of all to rate the performance of the State government on each.

The average for the thirty-four issues was, of those with an opinion, thirty-

seven percent held a favorable opinion of the State's performance, sixty-

three percent an unfavorable opinion. That's not unusual for a State govern-

ment, not at all unusual. Obviously, the most important issues are the ones

that are rated worse.

The public generally seems to work along the lines of what have you

done for me lately. If the service or facility is in good shape, and they

rate the State well, it is not important. If it's in bad shape and they are

concerned about.it, it gets a high importance and a low rating of the issues

after we asked them to rate the government, we asked them to pick the two, oi-

Page 29

three from the list that they felt were most important.

First on the list, cost of living inflation, forty percent selected it.

The cnange here, the energy crisis dropped to second position, with only

twenty-four percent picking it as one of.the most important. We had forty-five

percent volunt6ering,the energy crisis, but when they were reminded of

other problems, only twenty-four percent really considered it one of the

top issues.

Third in importance, help for older people, selected by twenty-three

percent, unusually high. It usually doesn't come anywhere near the top ten,

we-1-1,1 take that back. It's usually around tenth in importance on a State

issue list.

Fourth, crime in the streets, selected a relatively low sixteen per-

cent, drugs and narcotics selected by fourteen percent. Unemployment in-

creased in importance when we got to the list, up to fourteen percent

selected it. That's the particular concern of blacks and in Wilmington, as

might be expected.

Other problems, education thirteen percent, public transportation

twelve percent,.efficiency in government eleven percentj welfare programs

ten percent, taxes nine percent, again much lower than it usually is. State

hospitals and.health care nine percent- Protecting Delaware.'s coastal zone,

in the context of all these problems, only seven percent considered it one

of the most important problems. Government spending, only six percent are

concerned about that. housing six percent, significantly higher within the

City of -@,-iiminZton, more on the order of thirty percent there. Everything

else is volunteered by five percent-or less, mostly less. Air and water

pollution, 1-ive percent. ClosinF tax loopholes, bringing in new industry

=our 7percent- regulatinc growt.-i and development within the State, four.percent;

parks-and recreation, three percent.; protecting natural areas in Delaware,

three percent; maintaining existing roads and.highways, three percent; aid

for the cities, two percent', protecting consumers, two percent; getting

Delaware's fair share of federal programs, two per6ent;-encouraging tourism

in Delaware, one percent; building new roads and highways, one percent; farm

problems, one percent; highway safety, one percent. This gives an indication

of what people, as of February, felt was important, and felt was not so

important in terms of the broad'panorama of issues confronting the State.

The worse job rating given the State is on the most important issue,

inflation in the economy, ninety-One percent of those with an opinion rated.

the State unfavorably. I think we'd probably find the same thing if we

went out and did it again only more concern about-it now. It's the number

one issue these days in the nation. Issues seem to work that way, for a while

it will be energy crisis, and that's pretty well subsided, so now it's the

economy. But the State was also rated unfavorably on all of the issues

of any great concern, except education. Education which fell.se;venth in

importance,.voiunteered by thirteen percent, sixty-five percent of those

with an opinion rated the State well on education. Everything else until

we got down to relatively unimportant issues was rated unfavorably. The

other favorable ratings were on protecting Delaware's coastal zone, sixty-

three percent with an opinion had a favorable impression of State performance

there, sixty percent favorable attitude in the area of parks and recreation,

sixty-three:percent protecting natural areas in Delaware, sixty-two percent

building roads and highways, sixty-nine percent highway safety.

These are things where the public generally feels the State has been

doing a good job. There is, are some marginal ratings, fifty-two percent,

on encourageing tourism; fifty-onqE@ percent maintaining existing roads and

Page 31

highways. We asked another, took.another fairly general approach to the

issues. Starting with a fairly basic question to try and get an idea of

what people feel as the ideal thbust in Delaware over the next few years. We

handed them a cardlisting four alternatives and asked.them to select the one

that came closest to their own point of view. The four alternatives were:

(1) Improve, State services and facilities, evenif it means a sub-
stantial tax increase.

(2) This is a general, no specific service or facility mentioned yet,
just in general.

Do you think over the next four or five years the State should.
concentrate on improving State facilities..or services, eveit'if
it means a substantial tax increase?

Maintaining facilities and services as they are even if that
requires a substantial tax increase.

(4) Hold the line on taxes, even if it means cutting somewhat on
State services and facilitieslor reduce State taxes even if it
means bL substantial cutback in State services and facilities.

Twelve percent indicated support for the idea of an all out, effort to

.improve services and facilitie s even if it means a substantial tax increase.

An additional thirty-two percent indicated support for maintaining services

and facilities as they are, even if it costs some more, not a great deal
more, in taxes. Thirty-ei ht percent want the line .held on taxes, the*
9 y

felt that that was more important in general than improving any particular

facility or service, and eight percent indicated support forthe idea of

cutting back substantially on taxes, ten percent were not sure, or could

not express an opinion. When you remove those undecided and look at just

the respondents with an opinion, they split almost.fifty-fifty between

the maintaining or improving services at the expense of a moderate or sub-

stantial tax increase and holding.or cutting taxes. I don't say that this

gives you any easy answers. You will find through here that ona number

Page 32

of very important issues the population splits rather decisively, almost down

the middle,

BIONDI: They do that in elections too, don't they?

LOVELL: They certainly do. In regarding this public opinion research I,

we think it's very important, very valuable, it can give you some feeling

of what the people are concerned about, but you can't make decisions simply

based upon it. As it's already been said, sometimes the people aren't aware

of what a certain program involves, what the details are, what the-impact

of it would be. In addition, people change their opinions, many of these

opinions expressed here are not rigid; are not locked in, you are not stuck

with them, you can affect them. But this will give you an.idea of where you

will face resistance, what kinds of questions are likely to arouse controversy,

how you can deal with problems in the public realm, how you can publicize your

opinions, your recommendations., your approach. In this case, if you have

to make a decision on this I don't know.what you would do; half wants you

to cut or hold taxes and half wants you to improve services.

There are differences by demography, the ones most likely to support

the idea of improving or at least maintaining-existing services and facilities

are more likely, it varies somewhat and the de tails are in the report, are

more likely to be women than men; are more likely to be young,are move likel-

to be college graduates; they are likely to be concerned and active in

community affairs; they.are likely to be business, professional, or small

business people; they are likely to be, or white collar workers; they are

likely to be renters, city dwellers, those under five years in theState; they

tend to be Wilmington residents to some extent, and to s ome extent lower

Page 33

economic level, lower income.

The resistance to increase taxation is more,like.ly to come from men, those

fifty and older; those with less education-, those who are. not very conce Irned

or active in their own community's affairs; blue collar; retired and widowed;

small town and rural residents; andlongest term residents ofthe State, those

who have been here twenty years or longer.

Turning to specific treatment of individual issue.concerns, we've

asked a series of questions about all kinds of-problems, most of which were

covered in general in the data already talked about.

Let's-talk first about the emergy-crisis. and maybe we can get that

out of the way for the moment. In February, some seventy-four, -almost

three out of four residents of the,State considered the energy crisis at

least somewhat serious. Actually forty-four-percent went so far as to call

it very serious. The concern fell considerably by June, but was.still high,

sixty-seven percent called the energy crisis at least somewhat serious.

Concern did fall in the intervening six.months, particularly as gas became more

available, but the evidence we obtained indicates that people simply did not

forget the crisis as soon as they were able to,get gas again. We asked

for example, how much each respondent was doing to help conserve energy.

In February eighty-four percent were doing most or all they could. In June,

six months later, seventy-three percent still said they-were doing.all...,or

most of what they could so that people still regarded the energy crisis as

around, Just not so immediately compelling or so much of a problem to them in

their every day lives. Interestingly enough as.of February a plurality

felt t1lat there was noreal energy shortage. Forty-six percent rejected the

whole validity of the energy crisis, that changed by June. By June, a

majority offifty-three percent were willing to admit thatat least there was

PaF , 34

a real energy shortage. That helps explain why the drop in concern was not

inore decisive than it was.

In terms of the other problems, the economy, that was the second most

frequently volunteered issue and it's the first one on the selected list.

We asked a series of questions. First of all about the State's economy.

Over the next year or so, do you expect the economy of the State of Delaware

to improve or become worse? There was a split, again, but sixty-six percent,

two thirds of the residents-expect the economy to grow worse, as of February

this was, they expected the economy to grow worse within the State. Only

nineteen percent expected it to improve. When they turned to their own

economic situation, however,they@ i.'a little bit more optimistic. Forty-three

percent said.th at they personally, they and their family personally were not

as well off as they were a year or two ago. Eighteen percent reported

improvement in their own financial situation, thirty-eight percent reported

little change. Blacks in particular expressed feeling that they have suffered

in the last year or two, fifty-one percent of those, I'm sorry, fifty-one

percent of the black residents with opinions stated that they were not as

well.off in February as they had been a year ago. On the other hand, looking

ahead a year or two, thirty-six percent expect to be worse off; nineteen

percent, to be better off; and thirty-seven percent, little change. There's

a plurality in both cases in other words, well close to a plurality, who

is deeply concerned about the effect of the economic climate on their own

personal lives. That is particularly true among blacks except that blacks

tend to be more optimistic about the future than whites. A lot of that, we

asked them why they expressed the opinion they did, is just plain old optimism,

particularly black respondents. Many of them volunteered that it can' t get

Page 35

any worse It is as bad as it is going to get. So I would,not take that

the fact that blacks are more likely than whites to expect improvement as

a verystrong indicator that that really will improve for them.-,

The reasons people attribute in explaining their expectations, if

they expect improvement they tend to cite personal things such as I'm changing

jobs or I'm moving out of the State perhaps. Very few offer.a basic reason,

..they are scattered reasonsand very personal for the most part. But.t.he people

who expect things to be worse for them take.a different tac, they,tend to

blame government in one way or another, on situations beyond their control;

,.inflation, cost of living. There is some concern, that's inflation, cost:of

living is the primary reason people who.expect to be worse off in a.year

or two to see that. Another forty-three percent, I'm sorry,.I'd better not

even mention these figures because it would take me half an hour to explain

them. There is some concern about wages,but that's not the major issue.

The major issue is cost of living inflation.

When we turn to the question of job opportunities in Delaware we asked

now Job opportunities in Delaware compared to job opportunities in.other

states they are familiar with. Forty-one percent say that job opportunities

are better in Delaware; thirty-percent say they are about the same; only

seventeen percent felt.that job opportunities were worse in Delaware than

elsewhere. There is a difference, particularly between blacks and whites,

again. Thirty-two percent of the blacks say job opportunities in Delaware

are worse.tban they are elsewhere. It's also,true in Wilmington.

I've got to get this organized. Okay, with regard to specific services

and dollar priorities. -The basic question; we asked people,to choose between

Page 36

improving State service,,�'in general at the expense of a substantial tax

increase. We asked that same question about each of about ten or twelve

specific areas of interest. The first one, help for older people. Eighty-

five percent of those with an opinion felt that help for older people must

at least be maintained, even if it costs a littlemorie in taxes. Forty-nine

percent of those with an opinion went so far as to say substantial improve-

ment is needed, even ifItcosts substantially more in taxes. Fighting

the energy crisis was also given a high priority of additional expenditures,

forty-eight percent'. mass transit, f iftY-one -%percent ofrtbose with;--..

opinions said mass transit must be improved even if it costs substantially more;

another twenty-six percent said at least maintain it. Law-enforcement,

courts, and prisons, ranked fourth in terms'of priority on the list with

about three out of four calling for at least maintaining current efforts in

that area. Schools and education only fell fifth, that's as we've already seen

on a volunteered issue, it was unusually low volunteered concern about

education but there's a fairly high commitment to use of t4X money to support

it. Thirty-five percent want more spent in this area or at least want

the service improved, forty-one percent in addition think it must be

maintained even if it does cost a little more in taxes. We did not, by

the way, specify what kind of taxation or, even what level of taxation in

each question. Education in the State,'as'I understand it, plays a very.

strong role in education here, but a lot of it comes from direct property

taxes. ng the environment also came up fairly strong.support for
Protecti

tax expenditures. Thirty-eight said maintain efforts.in this area, even if

it costs a little m ore. Another twenty-eight percent want substantial

increases. housing, twenty-five percent improve housing even,if.-it.costs

substantially more and thirty-five, maintain current efforts. A totalof

sixty percent of those with opinions are concerned about housing there.

Page 37

Improving and maintaining highways, considerably less important. Fifty-

nine percent of those with an opinion want it at least maintained but very

few of those, only thirteen pencent, call for substantial improvement.

Attracting new industry, fifty-six percent want efforts at least maintained,

with twenty-seven percent wanting substantial.improvement. Building new

highways, fairly low priority in comparison. Welfare, low priority, the majority

there wants to hold the line on taxes in that area, which is no big surprise.

Promoting tourism in Delaware falls at.the bot tom, not a high level of concern

there, there are differences-by area of course and by race.

BIONDI John, in the interest of time, let me ask you to summarize

and make it a little sexier. What is the attitude of the.people in the

State? Summarize the overall response of.the people in the State to the

major source of additional revenue. What's.the least objectionable source

of additional revenue, if additional revenue is needed? And two, what do

they think about the coastal zone overall? Let's focus on those two for.a

few minutes.

LOVLLL: Okay, regarding the additional revenue, there's a fairly

strong split between an income tax increase and institution of a sales tax.

We asked several questions. One, which of three possible methods would you

least oDject-to? There wasa change, here too, between February and June.

In February, the least objectionable, thirty-five percent sales tax,,thirty-

four increased income tax, seventeen percent increased property tax. That

ciian-ed in June, Forty-two -percent oh-jecting least to instituting a sales

tax, with thirty-one percent objecting least to increasec income tax. The

momenium in direction of favoring a sales tax, wher, we comDare the two

Cirectlv between a nig@ier incouie tax and Institution of a sales tax, the

Page 38

balance shifted dramatically from February to June. In June forty-nine

percent opted for a higher income.tax over a sales tax, with only thirty-

seven percent prefering a sales tax. It almost reversed by June, fifty

percent called for a sales tax rather than increasing the income tax,

forty-two percent calling for a higher income tax as preferable to a sales

tax. Part of this is probably due to the fact that April 15 came and went

in the interim between the two. I just wanted to remind you. However,

clear majorities,'we read a series of statements and asked them whether they

agree or disagree with each. Clear majorities both in February and June

agreed, a graduated income taxis a fairer.form of taxation than a sales tax.

Clear majorities agree that a State sales tax in Delaware could hurt a

retail business that depends on customers from neighboring states that

already have sales taxes. They split exactly half and half on the argument

of a State graduated income tax keeps executives who make high salaries

trom wanting to relocate their businesses or industries in Delaware. You'll

find this one probably a little bit curious, if the State government would

cut down waste.in government spending it would have enough money to meet

the State's needs without a tax increase. Ninety percent of those with an

opinicr agree. That's an indication of how the public responds, whether or

not that is anything approximating what's thereal,situation I don't know,

I doui)t it frankly. But I think that gives you an indication of what kind

of problems will be faced if any tax increases are proposed. We asked

some about some minor tax things, but let's turn to the coastal zone. We

did a series of statements, both in February and June, repeating the same

ones and we also asked additional ones in June. In general, first of all,

the transfer of oil between super tankers and barges in the Delaware Bay

should he regulated by the State. Strong majorities agreed both in February

Page 39

and June on the order of eighty-seven to eighty-five percent of those with

an opinion. Drilling for oil and gas should be permitted in the Atlantic

Ocean off of Delaware. Agreemen .t was high in February, sixty percent, it

fel.L by June fifty-four percent, but it is still a Tnaj.o3Kty of those with

an oDinion. Construction of a super port, construction of a super port

snould he permitted in the Atlantic Ocean off Delaware, fifty-two percent

agreed in February while twenty-two percent disagreed, the rest no opinion.

The margin narrowed considerably by June, perhaps partly because of the

easing of the energy shortage, forty-seven percent agreed, thirty-four

percent disagreed, still a majority of those with opinions supporting

construction of a super port in the Atlantic. But construction of the

super port in Delaware Bay by ten points agreement outweighed di:�.@-

agreement, in February by one point in June, almost split dead even on a

Bay super port. Also on the question of State control on final say or veto

on super port proposals, strong majorities want the State to have the final

say whether it's in the Atlantic Ocean off Delaware Bay."' We asked some

additional questions about the super port, how people would feel about it,

this is in,June now, if it meant little or no revenue for the State government.

Well a clear maj ority would,oppose it if it means little or no revenue. If

it iead development of a petro-chemical piant on the shore, a super port

_@laware Bay would be opposed by a majority,of those with opinions. The

question of new heavy industry in general in the coastal zone, new heavy

ind-ustry should continue to be prohibited in the coastal zone. Clear

majorities of those with opinions, agree, both in February and in June.

partIc
ular heavy industry such as oil refineries, petro-chemical

Pag- 40

plants, and steel mills, only a third approved or favored that idea, a

majority of fifty-four percent opposed it.

What about changing current coastal zone regulations to allow case by

case d6cisions on construction of new heavy industry in the coastal zone?

A majority favored the case by case approach even though they are in general

opposed to heavy industry in the coastal zone. Commercial and residential

development in the coastal zone, should State approval be required? Close

to ninety percent of.those with an opinion, yes. We asked some questions

about growth and development in Delaware too. In general, most people tend

to think that recent history of growth and development in the State as a whole

has been about right. Although there's a substantial minority of about a

third who think it has been too fast. I'm sorry, that's within their own

area of the State. Statewide they think it's about right. Over the next

few years the State as a whole should continue to grow according to half

of-those with opinions, a third want to stop things where they are now, no

more growth. Question about control of growth we found first of all in

February there seemed to he a contradiction, people opting both for local

control of zoning and pl anning, land usage and the same majority opting-for

State supervision and control. So we refined that a little bit in June and

asked a direct question. People don't.care who controls it, they want it

controlled though. They want State and local government involved in control

of growth and toning through such measures as zoning. A majority agrees

the State has not done enough to control land, farm, land from developers.

People tena to feel, a majority feels that loc ai and State land development

controls tend, do not restrict developers too much. I think that covers

the areas o-i' immediate concern.

Page 41

BIONDI: Thank you John, doe's anyone in the audience want to ask John

any questions about the manner in which they did the survey or anything like

that. You will receive a full report of it and you can read the results.

Jdhn, I did notice though, when you were talking about those people who

improved or wanted the services improved or maintained even if they had tax

increases, you said they were mostly women; people from eighteen to

thirty-four and college graduates; concerned and active in community

affairs; business, professional, and small business people; white collar;

you went downthe Iline and you left off the fourth one was not registered to vote.

LOVELL: We thought we'd be a little selective.

BIONDI: Okay, does anyone want to ask anything about what you've

heard as an opinion of opinions, and we,are all sophisticated now, somewhat

sophisticated with what polls are and what utilization we can make of them,

Is there anyone who wants to ask John a question about the poll? Senator?

BERNDT: I think I might have missed something. Who sponsored this

study?

LOVELL: The study was doneby Oliver Quayle and Company for the State

of Delaware Planning Office. They were in consultation with them and they

approved the questionnaire.

BERNDT.: Then the State paid for thestudy through the Planning Office.

LOVELL: The State paid for the study, right, out of federal funds.

BIONDI: Out of federal funds, as usual.out of a federal grant. Yes.

Are there any other questions about the methods or..procedure involved in the

poll? Okay, thank you John..

One thing I did want to point out and that is that with respect

Page 42

to each one of the committees which has been formed, in addition to having

a person from the State Planning Office assigned to each committee, we have

had discussions with Dean Norman of the School of Business Administration

at the University and have discussed with him the possibility of having

a member of the University staff assigned to each committee to help with

the staff work of each committee. We talked to him Monday of this week.

And we are awaiting a reply from him. It's likely that we will be able to

get such assistance from the University for each,committee for guidance

and support in the work of the committee. Okay, let me open it up for

any comments, anyone wants to speak on anything we've discussed today?

Bob Hickman.

JORDAN: With all due respect to the State Planning Office and the

guy who just gave us that long presentation, I think this offers us a

dead end on the whole thing. In your opening remarks you suggested

that what we wanted to do was to raise the level of discussion.,

BIONDI: That's right.

JORDAN: On the subject, I do not think that anything I've heard on

the questionnaire does it, and in fact,.I think it tends to lower it, in

that respect I think it is unfortunate. Row this may have a useful purpose

in, from the standpoint that those of you who are responsible for executing

whatever policies, or putting into effect whatever policies or decisions we

come up with must of necessity take those kinds of things into consideration.

I hope that we don't approach this with the attitude that we are going.to

have this book in one hand and our study material in theother hand, keep

referring-to it besides where we want to go. I think on that basis we will

get absolutely nowhere.

Page 43

BIONDI: I have no interest in it on that.basis at all, Bob, I have

very little interest in it as a substantive document at all, period. It's an

indication of what the.people in the State were thinking in February and

-June And I don't propose to spend my time continuing to worry about what,

they're thinking. I am concerned about what they ought to be thinking,

what proper public policy ought to be and,that's where I'm going from here.

I trust the Commission will go that route with.me also. Okay, yes, Toby?

I violated a rule that I was supposed to establish, and that is, when we

speak,we are supposed to stand up, give our umeand speak clearly. Stand

up, speak clearly, and give your name, and who you represent so you can be

identified on tape.

RYAN: Toby Ryan and I am with the Building and Construction Trade Council.

You had mentioned earlier that you felt that these.various,committees,

these three committees that are set up should actually.have open hearings

for the public to come in and speak their piece., Well for thepast year

and a half we have Md hearings up and down the State of Delaware and I

feel that they actually became a contest.between, now I'm talking about the

coastal zone, the environmentalists.and.the.econ,omists or myself representing

the construction workers, and one day you would have a hearing and the next

day in the paper it would say, so and so outnumbersso and so. Then the

next hearing you'd have this group outnumbered that group and it was a

repetitious type of thing and I think if you had these committees having

these type of hearings you'd actually start into thesamething again.

BIONDI: Well, I don't want to say that I'm going to discourage public

hearings, okay. I think it's up to the committees to decide how they will

meet and work and the circumstances under which they,will hold public,

hearings. I do.not think there is much purpose in having the kind of a

hearing in which you simply announce that we're going to be at X school tonight and

P a g e 4-4

everybody will show up and just have a gene:@al brawl. That's the kind of

thing we've had.before, I don't think that offers much hope for the future.

I would hope that we would look'at it from the point of view of committees

working up an agenda, a work schedule, deciding to hold a meeting, stating

the purposes of the meeting, inviting those people with an interest to

attend, pre-submit their statements and have a serious discussion of the

problems involved. There will come a time when the Commission puts it's

entire report together and when people will have a*right to address them-

selves to it in that other type of public hearing but I'd like to proceed
basically as the Corporation Franchise Tax Committee'did.

I think some of you were members of that committee. I think we have

to quietly sit down and do some work and when we have meetings to -_`ocus

the meetings on substantive problems and who can contribute tothose problems.

The Chairman of each one of the committees is going to have a difficult

job with respect to that and I want to bring up the subject of the chairman-

ship.

At the first meeting of the Technical Advisory Committee we said we

would like to have meetings of the committees going in about two weeks.

We are going to ask the committees to make recommendations from amongst

their own membership as to who should be chairman of the committee and make

those recommendations to the Governor who will appoint.the Chairman of each

committee. We are willing-to entertain any other basis for the selection

of the chairman. We'll pretty much want to leave that up to the committee

members at this point to decide how they can best work together. There are

considerations some people are obligated time-wise at this point-in time

to other things and we want the committees to have chairmen who can work with

the committees. Yes sir.

Page 45

KRAPF: I'm Fred Krapf and, Mr, Biondi, I would like to take this

opportunity to thank the Governor personally for putting me on this

committee and I'm sure everybody else feels the same way. I think this is

something that Delaware has needed desperately and I know that I've been

forced out, being in the construction business, almost out of Delaware and Vve

been fortunate enough to do well in other areas and it's nice to be back

and to hear that maybe they do, want people back in Delaware. I go along

with.Bob Jordan,., in if you're going to have to sit:through an hour's dissertation

while somebody is reading me a survey I just don't think.there is any point

to thissort of thing and I also feel that.there's two things that we do not

need and that's more surveys and more studies. We've got enough surveys

and enough studies that if we piled them up in. this room I'm sure we couldn't

get them in here even if they were on microfilm. I would like to see us

get to work and do something and set a time frame that is realistic. I go

opposite with the gentleman, and I forget who it was who said, that thought

if we could just define the problem by June.; I think we all know basically

what the problem is and we could all do that very shortly and I was hoping

by the first of the year we'd come up with some solutions or we just.won't

have anybody left. Maybe I'm looking at it from a wrong point of view but

I feel that this thing needs to be pushed you've got a great group of people.

here who can push it. I think that we'reall interested and I hope that

we can move.that time frame up before June.

BIONDI: Well, I think we're going to try to adhere to the schedule.

I think we can proceed with the schedule. .1 agree with your.comment
with respect to further studies. I have already.opposed and canned the hiring

of consultants to put together a study of the studies we have. I think

Page 4o

we have people on the Technical Advisory Committee who can sit down and

put the studies together. We've done enough studying. The raw materials

are there and the studies are there. What we need to do is come to some

informed judgments about them except in certain areas. I think that we

do in the State have an absence of critical data with respect to some

of our problems.

Let me indicate one of them I'm personally familiar with. It was

the Corporation Franchise Tax. A recommendation was made as a part of a

Delaware Tax Study Committee that the top rate of the Corporate Franchise

Tax for those corporations paying the maximum would be.increased from $110

to $150 thousand. It would raise $3 million. The Corporate Franchise

Tax Committee, when it was appointed by the Governor to study the problem

in depth, thought that recommendation would be disastrous. The point I

want to make is that the first questions we asked were questions like this:

Who pays the Corpora te Franchise Tax? How is it stratified? Is it

classified into eleven classes of corporations by amount of tax paid?

How many corporations fall in each class? Are these corporations in the

state or do business outside the State? If you took all the corporations

on the New York Stock Exchange and put them in the stratifications, where

would they fall? Where would those in the American Stock Exchange fall;

Where would those on the Over-The-Counter Market fall? (CHANGE OF TAPE)

How did corporations progress through the rate schedule?. What happened

to those corporations who were paying the maximum ten years ago? What's

the status of the Corporation Franchise Tax in other states? What's the

cost of 'Incorporating in other states comparable to Delaware, taking into

account incorporation costs, and taking into account the cost of domesticating

Page 47

a foreign corporation? We sat down and asked those questions. They

were good questions, but there weren't any answers to those questions.

There had never been any data developed. The first thing we had to do

was hire programmers to come in and secure that kind of data out of our

own records. Yet people in the State have been making judgments about

the Corporation Franchise Tax and what you could do.with it everytime

there's been a tax crisis, and it's been a bi-partisan attack on the tax.

It produces somewhere about sixt een percent of our revenues. Well, think

welre in the same position information-wise with respect to a lot of other

critical questions, but I don't believe it's going to take an extended.

period of time to find the answers to those questions. Okay. Anybody else?,

Arthur Krieger, you!ve got nothing to say? Throughout the meetings

of the Corporation Franchise Tax Committee you k ept saying, what are you

going to do to bring new business to Delaware and I kept telling you, you

were not being relevant to the issue. Today you have a chance to be relevant.

KRIEGER: I'm at a loss for words.

BIONDI: You'r e at a loss for words. That's the first time I've found

you at that.

KRIEGER: Don't get excited, Frank.

@BIONDI: Okay, Henry, do you have any ideas about what we're about.

here? Do you see us being able to coordinate what's going on here with the

things you're doing in the county?

FOLSOM: Very definitely. We're plowing the same.field. Very definitelyl

our committee and the county government of course are pl owing thesame field.

Pa,e 48

I think we have much of.the input data, certainly the interest and I hope we

can contribute.

BIONDI: Thank you Spencer Thompson, I took a lot of your thunder.and

relied on it in my opening remarks. I didn't plagarize it however. Do you

have any other comments at this time ? You've given some thought to the structure.

of the Commission and its membership - it Is function.

THOMPSON: I don't know that you are going to be too successful in

having this group select their own chairmen. I think we are going.to

comments are going to move quickly on this. We're putting people together

who havenl-t worked together and it would be helpful to have suggestions

from you to the committees, Frank, as to how it might be accomplished.

Secondly, most committees are no better than the staff that you've got for them.

I think it's important, to,get somebody, assigned as a secretary to the committees

who has got the skills to help them pull the information together and to sort

out the information-.

BIONDI: Alright, I think we can take care of the second problem. As

to the,first problem.with respect to the selection of the chairmen, is there

any kind of a consensus here that perhaps- that I.should talk with members

of the various committees and secure their suggestions, and then make a

suggestion to the Governor.as to the chairmen of the committees. That's the

best way we should proceed? How. do you feel about it? Okay, we'll go along

on that basis..

BRYSON: You're the Chairman, Francis.

BIONDI:. I'm trying.to be,.democratic today, with a small

John, but I have no hesitancy.about making those kind of decisions. Al?

Page 49

MADORA: Al Madora, Director of Public Works, New Castle County., I

suggested that why wouldn't a couple meetings, let them decide a temporary

chairman for the evening to get a feel of who's on the committee.. You know,

get a feel of the people and then maybe the committees themselves could get

together and recommend someone.

BIONDI: Well, that's an alternative Al.

JARDINE: Why don't you have the Commission members of each committee

select the chairmen?

BIONDI: I think you can expect the chairmen to be selected in the

bmext.few.days. I'm not going to be hung up,on this kind of problem.

MADORA: That's where the power comes.in, right Frank?

BIONDI: Well, we've had reasonable discussion between reasonable men,

now it's time to make a decision, and we'll go on. Now are there any other

comments? Leon?

WEINER: I think there are two questionsthat don't fall in.the Leon

Weiner is my name - that don't fall into either of the three committees,

but run across.the grain on both and Ild.like to.suggest that somewhere,

in some fashion, either some guidance.from you as Chairman or what other

method you'd use to try to deal.with them.

The first is the question that you pressed upon,,which is the relation-

ship between the State, county, and local governments. It is a critical

one,,not only from a legal point of view as to which.has the power and the

responsibility, but also how they can function inthis kind of..relationship

so we don't produce,an overlapping and.extraneous consideration of. these

things that are not, you know, feasible. And the second is, a consideration

of what is thegeneral attitude toward growth? We have assumed from hearing

Page 50

what you've said today, that we're going to have growth. I would suggest

there are some people here that don't believe it,.or may not want it and

I think that if you're goingto have a fruitful. kind, or meaningful, or

whatever word you want to useout of here, there needs to be some kind of

a posture which suggests: (a) that a certain amount of growth is going

to happen whether we like it or not or examine the alternatives, and (b)

face up to that responsibility. Because I think that many of our dis-

cussions can get lost without getting that second,question dealt with.

BIONDI: I think you've put your finger ontwo good questions, Leon..

I think that there are going to be primary questions that the Technical

Advisory Committee is, going to have to be wrestling with and each one of

the subcommittees. Now therels.going to come a point in time as the sub-

committees go on with their - it's obvious that - well, let me say

about anything can happen, but.we currently have two systems of control

over State and local zoning and planning for example.. You have one level

of control at the local level and I don't know anyone at the local level

who would support the assumption of the planning and zoning function by

the State. On the other hand, the Coastal Zone Act itself is the result of

a zoning authority by the State and may not be consistent with what'@

going on at the local level. I think we're going to have to answer this

question in terms of how we approach problems. For example, I asked Dick

Bauer at the meeting of the Technical Advisory Committee a question con-

cerning the industrial growth study which is being done pursuant to the

208 Program. I asked him in doing that industrial growth study were they

.going to look at the problem of the c oastal zone from the point of view

of land use planning in the coastal zone, and what land use planning would

dictate with respect to industrial uses.within the coastal zone or were

Page 51

or were they,going to look at it on the basis of the fact that it was

simply prohibited. He advised me that he was going to look at it from

the point of view of what proper land use planning would call for in the

area. In that context, you are dealing with the problem of State vs. local

control and out of this discussion, and out of the work of these committees,

weire going to have to come up with State policy which is either coordinated

with or in some cases conflict with thelocal policy. The object of working

together with these Technical Advisory.Committees and with these committees

having a broad membership of local government officials.is to see where

the consensus is. But your two questions are questions we are going to

have to take on early. Yes.

VAUGHN: And kind of in line with what Mr. Weiner has said, a couple

of things that are going to be common to the work of several of the

committees., one kind of a procedural one. In figuring out things to do

c.onstructively, thequestion that we must,ask in every committee is who

will do these? So each committee is going to have to wrestle with the

matter of who's going to do what, and maybe we're going to need some

guidance from the Chairman, and from the Governor, and our legislators

as to how to handle that one and then.as concerns another bit of subject

matter tha t is common to all three committees, and yet not really assigned..

as the responsibility of either one per se, and that's transportation.

Tr'ansportation looms large in the economic development matter. It looms

large in the land use and community facilities and in terms of the Post

of, the various public services that the State will have to provide in the

future. It is probably going to be one of the biggest. Well, how do we

handle transportation?

BIONDI: Land Use and Community Development? It was on a list that

Page 52

Dave had prepared and he proposed to handle it in the Land Use and

Community Development.- Why did you think it was most relevant there Dave?

KEIFER: Because it was essentially a matter of urbanization policy.

It was a question of transportation.

BIONDI: Okay, well, that ought to be raised early on in the sub-

committees as.to whether or not it's in the right ball game. Are there

any other comments?

KREIGER: My name is Arthur Krieger, I just wanted to check with you

Frank, as to what your plan is as to the mechanics of coordinating from

here on in?

BIONDI: Well, I think that-meetings of the three subcommittees should

be set-up to take place within the next two weeks. The staff officer

assigned to Land Use and Community Development is Mr. Hugg. The staff

officer assigned from the Department of Planning to the Economic Development

Committee is Mr. Hudson, and the staff officer assigned to the Cost of

Public Services is Mr. Fisfis and I think they should be in contact with

the members of the committee this week and ascertain the best date and

time. Now, maybe something we can get straightened away here now is,

comeone called me and indicated that he preferred to have the meetings

in the evening. What about the difference between evening and afternoon

meetings. Is there any consensus of the group as to when the meetings

should he held?

ANONYMOUS: Afternoon.

BIONDI: A strong vote for the afternoon.

ANONYMOUS: Afternoon.

BIONDI: A second strong vote for the afternoon, how about t,he rest

of yout

Page 53

ANONYMOUS: Evening.

BIONDI: All right,.why don't we do this. Each of you guys from the

Planning Department try to schedule the meetings at a time that aatisfies

the majority of the members of the particular-committee., Okay? And if

you have,,a conflict, a tie vote, call me. Now, Art, we would look forward

to getting a meeting going within two weeks. Dave.Keifer himself is going

to call a meeting of the Technical Advisory Committee.,.We are going.to

have transcripts made of these meetings and also summaries of these meetings

prepared and shall distribute. Have we made provisions to distribute to

everyone here today a summary of this meeting?

KEIFER:, We'll do it.

BIONDI: Okay, Would that be helpful if we did.that so you could

maintain an informational flow? Alright we'll.do that. We'll also get

out to you, to eachone of the committees,:the.suggested tentative areas

of your interests. We want to make it understood that concerning the

areas in which you are going to work, we want the judgment of the people

on the committees with respect to that. What we have done is merely given

you.suggestions. I will attend the meetings.of the subcommittees, at

least the first meetings of the subcommittees so that we won't stall,

around for lack of direction. Now, is.there anyone who thinks his

services would.be better utilized in some other capacity than on the

committee he has been assigned to? We tried to make a judgment but you

can't be right on all these, yes?

THORN: My name is Ernest Thorn, Common Cause,.my own particular

experience is on land use, not public cost,. but I am willing to work

wherever I am needed however.

Page 54

BIONDI: Alright, well I can't see any reason why that can't be

honored.

THORN: I'm representing Stewart.

BIONDI: Okay, you want to change that designation then to Land Use

and Community Development. Fine. Are there any other suggestions at this

time? Yes sir.

WALTON: My name is John Walton, I would rather serve on the Land Use
Committee but I have a strong interest in'the Economic Development also

but I'm more concerned about one thing now, Mr. Bion di I hope I'm

not getting the impression that this Delaware Commission - I know we have

great conflict of interests of opinions in the room and the people in

the room who know me or know my views, they may resent them or they may

not, but be that as it ma y, I don't want to lye part of a commission and

I don't think anyone else does that's going to rubber stamp an industrialize

Delaware Commission. When people stand up and say let's get this thing on

and get on with it that just leads me to believe we're going to get on

with something.

Now there may*be some polls, for example, Mr. Biondi, that the majority

of opinion was that we want to accept a moderate growth plan and something,

not that my organization says this or anything else, but that maybe we want

to accept zero growth or a certain percentage growth. Would these people

be as anzious to get this report out and get on with it? I mean this is, if

welre going to work in the interest of everyone, I think right now, I'd rather.

serve on the Land Use Committee. I'm interested in Economic Development

but I think there should be another meeting of this Commission itself and then

Page 55

have your subcomm ittee meetings,-so we get a chance to hear from everyone

because there are people in this room who I've never heard their views.

I know by organizat.i on who they are but I'd like to hear from the people in

the Commission and know what their views are.

BIONDI: Well, my own judgment is that@the committee structure is the

best way to proceed. The reason why you were put on,the Economic Develop-

ment Committee is because you are the representative of the Farm Bureau

and one of the critical questions is the extent to which farm land,-.-in the

State should he preserved for agricultural purposes.

WALTON: You just,said farm land and agricultural purposes. That's,

land use.

BIONDI: Well, it's also relevant in the Economic Development area

but as I say, fine.

WALTON: Well after you've read over your several lists there and I

caught it. I don't know where you're discussing agricultural lands in the,

future and things of this type, I really don't. I would assume it would

be under Land Use but if it's going to be under Economic Development then,

that's.okay.

BIONDI: I think that's an important consideration in the Economic

Development area. But I have no objection to,you serving,on the other.

committee. Okay?

WALTON: Alright.

BIONDI: Any other comments? Okay, does anybody have any suggestions

as to future procedures other than a motion to adjourn.

ANONYMOUS: Seconded.

BIONDI: Thank you all for coming. Would you all signthe register on
your way out if you haven't 'signed it yet?

Lynn Drummond
Recovding Secretary

STATE OF DELAWARE
EXECUTIVE DEPARTMENT
PLANNING OFFICE

DOVER
SHERMAN W. TRIBBITr DAVID R. ]KEIFER
DIUC

DELAWARE TOMORROW COMMISSION

MINUTES

April 8, 1975

Attendees*

0. Francis Biondi Peter A. Larson
David R. Keifer Hector J. Rodriguez-Costa
Clifford Hearn W. Spencer Thompson
E. Sherman Webb David S. Hugg
Carl Russell Nick Fisfis
Ernest W. Thorn William R. Latham
John.C. Bryson James H. Gilliam, Jr.
Jane Tripp Dan Kuennen
Marvin Brams John F. Walton
Joann D. Slights Theodore W. Ryan
Dorothy Greer Joseph Golden .
Arthur Kreiger John D. Daniello
William Bradford Gerald L. Cole
William Markell Bruce L. Hudson
Leon N. Weiner Henry Ridgely
John B. Morton Crawford J. Carroll
Jay N. Cooperson Joe Conaway
Marcie Bierlein

Cha-i man Biondi called the meeting to order.at 3:15 p.m. and

welcomed everyonelto the second meeting of the Delaware Tomorrow

Commission.

The purpose of this meeting is to present three Committee

reports to the Commission, with summaries to be given by the

Committee Chairmen, and to discuss future action by the Commission.

The Economic Development and Land Use and Community Development

Committee reports were mailed to everyone prior to,the meeting and

the Cost of Public Services Committee report was distributed at

the meeting.

Chai man Biondi stated that hefeels the Commission members

should consider the reports of the three Committees with any

dissenting views of Committee members that may come,in over the
course of the next several weeks and that we should set a time,

10 days or so, formembers of the Commission to.comment, in

writing, with respect to the contents of all three reports. If

they disagreei they should state their reason for disagreeing.

The Commission members bhould suggest anything that they feel

should be dealt with that hasn't been dealt with bythe three

Committees.

Chairman Biondi proposed to then hold a meeting one week

later of the Commission to consider these reviews to determine

to what extent the Commission will adopt as its own report. These

ideas are open for discussion. Everyone will have an opportunity

to fully consider the reports and to comment on them.in writing.

MR. THOMPSON: In commenting on the report, I will assume

that you've read it, I am enough of a realist to realize that you

haven't all read it but I have to go,on the assumption that you've,

read it. In'the report, we tried to survey, forthe Commission, the

major elements affecting economic development in-the State. We did

this not to try to arrive at a conclusion as t6 what the futurd

rate of growth in the State should be. We felt that's really an issue

that the Commission ought to consider, not only in the light of the

economic positions withthe land.use and the cost of government and

other elements. What we did try to do was to bring the gwowthof

the State in the last 20 years tnto perspective, to explain why

that growth had taken place and then to try to give you some idea

of the kind of economic growth we would foresee in the next 10

years just from the industry and the population that's in place.

Also, we tried to lay out for the Commission some of the things that

you could do if you really wanted to accelerate the rate of growth

or direct the rate of growth in the next 10 years. We weren't

trying to say'what it ought to be, we wer e just trying to clear

the brush out.of the way so you could look,at that basic issue.

Looking at the past 20 years,.what did we find that was significant

to the work of the Commission? First, Delaware's growth in the last

20.years,,both in population and in jobs, has been phenomenal. It's

one of the. fastest growing states east of the Mississippi in that

20 year period. This rapid growth of the last 20 years has required

a substantial in-migration of people into the State; it wasn't a

growth that grew out of the natural growth of population, it was

a growth that partly was from the natural growth of population but

at least ha lf of the growth was a result of in-migration for

peop.le to take new jobs in Delaware. The rate of growth was

greatest.in New Castle County. This growth was achieved in spite

ation in the State, in the City of
of two areas of declining popul

Wilmington.and in,rural Sussex County. So the growth is all the

more remarkable when you lookat two depres'sed areas that we've

had within the State. Also-, the growth was in spite.of two or three

declining areas of jobs in the State. In other words, there has

been a substantial decline in the number of people employed with

4,-

the'railroads has declined significantly in the past 20 years. The

leather working industirtes, which had an activity in the'Wilmington

has all but dispppeared and some of the Marine activities in

the Wilmington Basin and around Lewes have declined significantly

in the last 20 years. But in spite of that kind of decline, overall

the State, has had this remarkable rate of growth.

The growth that.we',ve had has been in'the higher paying

industries. @In the industrial area, growth.has been in autos and

chemicals and both of these'industries are on the high side of

rates of pay Ias compared to all industrialAobs in the United States

so the present per capita income in Delaware has been rising in

the last 20 years as well as the growth of population and jobs.

However, it is interesting that the most rapid rat e of growth in

employment in Delaware in the last 20.years was in government and

in the service categories. From our point of view the.very rapid

rate of growth in government jobs are a cause of concern and you'll

see it reflected on the other side and,the cost of-government on
that, as to whether the burden of government.has become.much greater

in the State during the period of the last 20 years and what happens

to that rate could have an effect on economic growth in the-next

10 years. The growth that we've had has res ulted few se veral

factors. Just let me indicate what I think are the three 1p*ajor

factors affecting the growth: (1) The location of the State in the

northeast corridor, as it's called, between Boston and Washington,

and the improved transportation in the corridor, particularly the
major highways..that have been.added, contributed-to alot ofnew

industry locating in the Delaware area, strategically located and

I p an availability of good
t was acce tably located. (2) There was

land sites in the State and the related utilities: water, roads,

railroads, gas, sewage, and so forth. These serv ices generally have

been good in the State of Delaware, particularly as compared to

Pennsylvania and other areas as in this geographic area. (3) There

has been a favorable tax base for business in Delaware as compared

to Pennsylvania, New Jersey, and Maryland..

These three factors have contributed to alot of new industry

moving into the State. It's been done'with no special incentives,

by way of special revenue bonds, or tax credits, or subsidtis from

government. There have been subsid&ts but there's been no marked

subsidy in Delaware as compared to Virginia, the Carolinas and

areas like that where they'd really gone out to subsidize bringing

industry in the last 20 years.

Looking at the next 10,years, we think the rate of population

growth, both in Delaware and in the nation, is going to slow down

considerably. The national,growth certainly is slowing down and

the rate in the State is slowing down, largely as.a result of the

decli.ne in the birth rates. Alto, we think that there will be

.a substantial drop off in the internal migration of people within

the United States in search of new jobs. Migration is becoming more

difficult and witl remain difficult for the next,10 years because of

mortgage rates and alot of 66her things that are slowing down that

migration. So that unless Delaware makes major policy changes, the

rate of growth.in net new jobs and in population will drop sharply

in the next 1.0 years as compared to the last 20 years. However,

because of the location of the State andbecause of the present

industry already located in the State, it fs the judgement of our

Committee that net new jobs will grow,.at,least as fast as the labor

force without net in-migration. In other words, we don't need

to make a special effort to bring alot oflnew jobs in the State in

order to provide jobs for our existing population.

The majority of our Committee felt that.the,net,growth in

new jobs in the next 10 years would be more than the,growth in the

work.force from the existing.population so that we.wowld have some

net in-migration, bven from existing industry growth over the next

10 years, but even the most pessimistic members of our COmmittee

felt that the growth in jobs, while it will,slow down, will not

be less than the growth in the size of the labor force from existing

population.

Secondly, we think the per capita income will keep pace with

the national data because of the kinds of industrJes and the kinds

@of jobs that are available in Delaware. In other words, it was

our judgement that Delaware does not face a crisis atthe present
time, such as New England faced when the.textile mills moved out

or such as the Appalachian areas,.of this fountry, faced when the

coal industry declined substantially, or as you had in the deep

South when there was a very significant c.hange.in the Agricultural

.patterns so that there was a lot of excess population available.

We don't see that kind of crisis in Delaware in the next 10 years.

However, the decline in the rate of net new jobs, and the decline

in the growth of population as compared to the last 20 years, will

generate certain political pressures. We're aware of these, we,

can see some of these pressures, even evidenced within our own

Committee. For example, the construction Industry in Delaware has

been a booming industry for the last 20 years because of the

phenomenal growth. When the growth drops off, the construction

industry is hurt and so there is pressure to accelerate the rate

of growth in the State. The same thing is true from real estate

interest and other interests that profit from escalating land

values and construction activities.

ThIs decline In-the rate of growth and the resulting political

pressures, in our judgement, give the Commission the job.of wiighing

all the facts and making the soundest decision for the State

as to what kind of a rate of growth we'd like to have in the next

10 years. Delaware, in our judgement, can afford to be selective.

we're not in a state of crisis. We're at a point that, if we

can agree on our future, we can make some intelligent decisions

Ao influence that future.

Now, the other thing we tffed to identify for the Commission

the things, the aspects of the job, that will effect economic

growth. First of all, we.felt that the State should concentrate

on bringing in industry into the State that will tend to turn

around the declining, or the depressed areas, of the State; namely,

the City of Wilmington, and the rural areas of'S.ussex County.

These are the two geographic areas of the..State that ought to have

particular attention, to the extent that we're being selective.

We think that the State must be selective to get needed results,

you can't get any kind of industry to come into the Wilmington area or

come into Sussex. There are only certain kinds of industry that can

be attractive, and if we're going to bring them into the State, we're

going to have to really concentrate on that kind of industry and under-

stand why we're doing it.

Secondly, we think that in Delaware, we need a much stronger State

development agency, (and this would include the State Planning Office

organization) in order to compete effectively with surrounding States.

In the last twenty years, a number of States have done a great deal to

facilitate new plants or new industry moving into the.State. One of

the ways they've done it is to have a strong State development agency

that could meet with the prospective industrial clients and help them

settle all their problems in a very efficient and effective manner.

We don't have that kind of mechanism in Delaware today. I know, I've

been through this process on the business.s.id e of it, in terms of putting

a new plan in Delaware, it's a much more complex job than building a
new plant in Virginia, where the Governor, through his development agency

on down-they really roll out the red carpet to make it attractive to-

come in and they bring all the resources of the State to your doorstep

to encourage you to come in and build a plant in their State. We are

not now competing in that league, and if we're going to bring industry

into the State, we're going to have to think competitive, and overcome

some of the county, city and local jealousies and frictions that we have

in this area of bringing industry into the State. We're going to have to

do it.also if we want to be selective and effective.

More than this, we think that the State needs to go to work on some

major economic problems, which if not corrected in the next 10 years, could

seriously impede economic growth. For example, the railroad network,

south of the canal, is in deplorable condition based on a report the

Committee received. It has deteriorated and is in bad condition. Now

if that isn't turned around, it's going to have a real impact on getting

ne w industry to come in south of the Canal, if that goes down the drain.

That's major economic factor facing the State.

Secondly, the State has not been spending, as the cost of government

data will show you, a proportionate-share on the highway network. This
is beginning to show up in New Castle County, where we're getting.more

and more bottlentacks, whether you look at the Newark area or you look at

the area around Wilmington, and unless we spend the capital to break those
highway networks, it's going to impede the rate of growth, even in the New

Castle County area,

Thirdly, we think that it's important to give close attention to the

rapid rise in the cost and the burden of government. Delaware, in the

past twenty years, has been a very attractive place to come into, because

the tax rates have been attractive for industry and the relative cost of

govern mient, from a, business point of view, have been low You look at

studies that are made in New Jersey, Maryland, and Pennsylvania, and they're

all looking at Delaware, saying how much better off Delaware is, but that gap

is narrow. If we continue to have an increase in the cost of government

in the next period like we've had in the past, we could loseAhat advantage

entirely. I think,we need to understand why that's happened and whether it

can be turned around.

Those are the major issues, in my mind as I've worked with the Committee.

The'Commission needs to decide really how much growth is desirable in the

next 10 years, where the growth should take place, what kind of jobs we want

to bring into the State, and we want to weigh the costlof that economic growth

in terms of bringing it into the State. We think we're going to get

growth roughly equivalent to the increase in our work force from existing

population without effort that is significantly more than we put in, just

from the industry that's in place. Beyond that,, we think the Commission

has to look at it, in the larger aspect of the Commission.

That, Mr. Cha irman, is my summary.
CHAIRMAN BIONDI: In several places within the report there was the comment

that there may have been another view with respect to the rate of growth

expected in jobs and population.. Did anyone on the Economic Development

Committee plan to file a dissenting report, or file any comments?

MR. THOMPSON: We have had,a difficult time sorting out the actual

employment records by industrial categories in the State, in the last.twenty

years, and the rate of increaseor decrease. I think by the end of the

month, probably in the next week or ten days, some research that we have

had carried out for us by the University of Delaware will be completed,

and as a result of that research, we will have eliminated most of the disputes

over the figures. We Inay have som e disputes on the rate of �rowth in the

future but at least we'll eliminate the disputes on what happened in the

last twenty years. We may have some dissents.on how much growth we expect

in the future, whether it's just enough to.take careof population or whether

it's going to require some in-migration. We couldn't settle that debate

until we had better data on what happendd in,the last twenty years. We had

some curious anomolies out of the Department of Employment Security in which

the population grew fastest between 1953 and 1.963, but the number of jobs

grew more rapidly between 1963 and 1973. 1 think it's because of some.dis-

tortion on how fast jobs actually grew in 195.3 and 1963 as compared to 1963

and 1973. 1 think in anobher ten days we'll have that reconciled.

CHAIRMAN BIONDI: Will your Committee meet then after getting

that information and supplement this report?

MR. THOMPSON: Our Committee will do two things: We'll meet to

consider that and we'll also meet to give the members of our Committee

an opportunity to submit any dissents they have in writing.

MR. WEINER: Spencer, has your Committee at all been aware of or

coordinating with, the rather elaborate study that has been going on in

New Castle County, known as the 208 Study, with regard to this question

of growth and industrial land use needs and projection and allocations?

MR. THOMPSON: I would have to say that the projections New Castle

County has come up with are not far off from the projections that we

have been making. If anything, they may be a little higher than the pro-

jections we have made, but they are not seriously out of step.

MR. WEINER: One of the reasons was that, on the question of employm6nt,

they have done a rather definitive study industry by industry and sub-area by

sub-area.

MR. THOMPSON: Which is what we're also doing, independently, and
weire going to cross check it against their figures.

,CARL RUSSELL: Specifically, have you used the 208 proposal as the b,--is
for most of your direction?

MR. THOMPSON: We haven't used it at all, it's been done entirely

independent of what we did.

MR. RUSSELL: The work being done by the University is that the work

that is going to tie in with that study?

MR. THOMPSON: Yes, the work being done by the University will be cross

checked with the work that this group did, to see where our differences

exist, if any. That will be handled in an addendum to this report.

MR. WEBB: You pointed out that the growth of government and growth

An service industries during the past twenty years was pretty strong in Delaware.

Did you do any checking to see if it was abnormal in relation to rates

of growth in other States or other areas? It appears that this is a

national phenomenon and not necessarily a localone.

MR. THOMPSON: There are two things on the service area: the number
of service jobs in relation'to the number of jobs in basic industry

have been growing. This will continue to go that way if the purchasing

power of jobs and industry continue to go up--they will be demanding

more services and buying them, so the ration may move from 3:1 to 4:1

in the next twenty years. I think what's happened in Delaware may.also

be influenced by what's happened on the location of a lot of shopping

centers just over the State lines in Delaware. If we should have a sales

tax it might change that rate of growth in the future as compared to what's

happened in the last few years, where there's been some advantage in

locating a shopping mall just on the Delaware side of the line, rather

than on the Pennsylvania or Maryland side of the line.

MR. WEBB: How about tourism. That's been quite heavy. Are they

considered service for your purposes.

MR. THOMPSON: It'san important industry, in total number, not all

that large, as compared to a lot of other retail trades, some of the

others are much larger.

MR. WEBB: One last question. You say that.the growth will be at

least sufficient to take tare of the new entries into the work force, and

possibly (a majority said') it could exceed it and require some in-migration,

but you're not suggesting that the mix within that work force might not do

some changi,ng. Is that not correct?

MR. THOMPSON: The mix may change from the mix that there's been in

the past. This, our report indicates, might put a burden on career educa-

tion, and so forth, in the State,-to make sure that that's adjusted to

anticipate the kind of mix that will take place in available jobs.

MR. CONAWAY: In reading over the report, I was a little perplexed

with the absence of Sussex County, but with your comment about that being

a target area, I would say that we are very pleased to hear that- that is

a desire of the group.

MR. RUSSELL; You mentioned in your summation that one of the areas

which needs to be addressed is the increased cost of government in the

past few years. I didn't see specific mention on this in the report.

Would you elaborate on this a bit. How far did you do into.that?

MR. THOMPSON: From our employment data, we were awaretthat the number

of people employed in government has increased much more rapidly than the

number of people employed in the service industries or in basic industries.

It's in that sense that we saw the cost of government going up, we just ran

up a cautious flag, but we didn't get i,nto it because we felt another

Committee had that responsibility.

MR. RYAN: I am a member of that particular committee, but I miss ed

the last couple'of meetings. Was there anything brought up about the Coastal

Zone act, in its present form?

MR. THOMPSON: No, there wasn't. As the report indicates, there's

been no evidence brought before the Economic Development Committee that the

Coastal Zone Act was a serious impediment to the economic growth. We didn't
have any strong evidence one way or the other. So we.didn't really get deep-

ly involved in the Coastal Zone Act. Again, we felt that this was more of a

problem for the Land Use and Development Committee, than it was for ours, since

we could seesufficient jobs available in the State for the existing popula-

tion, without getting into the Coastal Zone Area.

MR. RYAN: I had written about a four or five page letter, that

the Economic Development Committee had requested.' I had mailed it back

to the Economic Development Committee, and stated on there about the

unemployment in the building trade. We gave reasons, in this particular

let ter that I had written, as to why we thought the Coastal Zone Act, in

its present form, was harming the construction industry.
MR.,THOMPSON: I have alluded to the fact that the Construction
industry is one of the hard hit industries within the State at this point,

particularly with the decline on it. I really think.that it's an issue that

the Commission needs to address itself to. The Economic Development

Committee did not try to resolve that issue.

CHAIRMAN BIONDI: I want to pursuade the members of that Committee

that they should undertake that question deeper than they have or in a

different form than they have -address it there or file a dissenting report.

MR. WEINER: To clarify, you are saying that employment opportunities

for the existing population, as a result of its natural growth, will be

available without any major economic increase other than the natural

growth of the economic elements which are present today. Are you assuming

that you would exclude in-migration or look fora balance between in and

out migration for that kind of a population defined as existing.

MR. THOMPSON: When we talk about existing population, we were looking

at the number of net new entrants into the labor force, as a result of

youngsters 15-18 coming into labor, as compared to the deaths and people

withdrawing from it. We assumed, in projecting against the jobs on that,

that there will be some out-migration, there'll be some in-migration, but

they would tend to net them out. But we say that the minimum estimate is

with no net in-migration, the growth of jobs would be equivalent to the

net new labor entrants of the labor force

MR. WEINER: With a population base projection to do what in the

next 10 years, increase or not?

MR. THOMPSON: Whether the population goes up or not in the next

10 years is not important, because the population is already in place in

the State, that will be coming into the labor market.

MR. WEINER: But it's based on the stable no increase in population

in terms of job producing requirements. In o,ther words, there will be

no people coming of age, and you are making the assumption that in-migra-

tion and out-migration will met out at basically zero.
MR. THOMPSON: When-we made the projection of jobs, we thought there
would be more jobs than the net increase in the labor force from 'Che

existing population.

MR. WEBB: Didn't you say that there were two findings of the

Committee and that one was that, at the minimum, the new jobs would.be

equal to the new entrants and the other was that there was a.!majority

who felt that there would be more and,would require some additional

in-migration.

MR. THOMPSON: We have a range of view of 28,000 of in-migrants

in the next 10 years overand above the net new entrants into the labor

market, from,existing populition. This assumes, even on the high side,

that the rate of growth in jobs in the next 10 years would not.be much

more than half what it was in the last 10 years.

MR. WEBB: This also assumes no impact from off-shore drilling

or anything in the oil industry.

MR. THOMPSON: Not at al I, we simply don't know. We have indicated
here that we think that the Stat.e needs moreinformation before a
projection can be made...

REPORT BY THE LAND USE AND COMMUNITY DEVELOPMENT COMMITTEE

MR. LARSON: Unlike Spencer, I don't think I can assume that

youlve all read this, because I didn't get Ey copy of this report

in the mail yet, although I am somewhat familiar with it. However,

I won't read it to you. I'll just try to get some of the high

points. As you can judge, Spencer's Committee was dealing primarily

with the question of how much. Our Committee was dealing with

questions of what kind, where, and in what form. Essentially, the

Economic Development peeple were dealing with facts. I think our

Committee dealt, and in some depth, with issues. If @conomic

forecast is an inexact science, political policy-making, with

respect to land use, is even more so. I think you will realize

that when you do have a chance to go through our report.

Essentially, what we set out to do, in our Committee, repre-

sented by a broad spectrum of interests, both public and private,

throughout the State was to create a model for Community Development

and Land Use for the future. We did this, essentially, through the

process of discussing and identifying the various issues on land use

and community development that the individual members of the

Committee were dealing with, saw, and could articulate in a form

usefulfor discussion. From that process of discussing the issues,

we set out to develop a set of positions or policies that the State

of Delaware might follow in the next 15 to 20 years, that if implemented,

through various controls, at the local and State level, would

set the kind of development patterns for our communities, both

developed and currently undeveloped, that the members of the Committee

at least wish to see.

We also, from that point, developed a set of programs and tobls

for implementation, for consideration by the Commission in the event

that the policies were adopted. I think it would be fair to say

that the consensus of our Committee was that our concern was essentially
with quality rather than quantity. What were the community develop-

ment patterns going to look like? What will our towns and cities and

rural areas in Delaware look like? We were dealing essentially with

physical things; 'things that one can see,.such as a farm, an office

building, or an airport, or a marine terminal. These are things

that can be identified physically. They can be measured. They.can

be controlled through land develop!nent legislation.

Three major streams of thought emerged from this process. First

of all, a strong feeling that Delaware should protect its prime

farm land in the future, for a variety of reasons, not only because

it's good farm land,but also because it represented almost an

industry in this State, that perhaps for many years has been overlooked,

but nevertheless a very important segment of our economy.

Second, there was a strong sentiment to find a way to standardize

our land use controls and regulations. Not only standardize from

the standpoint of the rules and regulations themselves, but standardize.

from the point of policy, if you will, as to what land uses were most

appropriate to what sections of the State or individual portions of

the State. One of the recommendations coming out of this consensus

is that Delaware consider the development and adoption of a Statewide

land development code, which would be a guide to be used by local

governments in their responsibility of actually controlling development.

Thi,rd, and perhaps most important of those consensus reached
in our committee, was the position that in Delaware we should look

for our future development to take place essentially around the

systems'that exist on the ground today, our existing towns, our

existing cities, our exisitigg settled areas, to build on the base

of utilities, transportation facilities, government centers, other

activities that are already there; to avoid, if possible, the

phenomenon of suburban sprawl, which has become so familiar to us

in the suburban areas of our State over the last 20 or 25 years.

This consensus, in turn, has lead to policies. For example, within

our Industrial Land Use category, we should first examine the potential

development of existing industrial sites and buildings that are within

a city like Wilmington. There is a very close correlation, Ithink,

with th is thinking and the consensus within the Economic Development

Committee.

That, briefly, is where our Committee came out. We were not

unanimous, as you will see Men you read.this report. We know full

well that the counties are not going to be particularly pleased with

additional controls, perhaps, imposed at the State level, and we

fully expect that the eounties will resist this position very

strenuously within the Committee. But, I think it's a good debatable

point for the Commission to get into. We were examining within our

Committee, and we will examine it further prior to the meeting of

the Commission, the question of the proposed American Law Institu te

Model Land Development Code. Some of us feel that that has some

promise for consideration by Delaware and,we will probably be making

some recomm endations on that to the Commission before it winds up

its work.

I will be glad to answer any questions.

CHAIRMAN BIONDI: Your Committee, then, will continue to meet

and you will come up with recommendations to the Commission with
repsect to that one area (the ALI Land Development Code) which is

mentioned in your report for possible digestion. Has your Committee

given any consideration to the recent study which has been done by

the Delaware Society of Professional Engineers in which they are dis-

cussing, in connection with but apart from, the Coastal Zone Act?

They are talking ab@ut a comprehensive statewide land use plan.

MR. LARSON: No. Their report came out just about th e time we

wound up our work. This would be of sonsiderable interest to the

members of our Committee and certainly, the Commission itself would

want to sonsider these recommendations.

MR. WEBB: Has the Committee considered at all the potential

impact of the Federal Legislation that is-proposed on energy siting,

which requires each State to develop a Comprehensive Plan for the

siting of such things as power generating gacilities, pipelines,

etc. - anything having to do with energy generation, transfer, or

management because the kicker to that is that if the State does not

do such a development plan the Federal Government steps in and

imposes upon the State.

MR. LARSON: The answer to Skip's question is no. However, there

is a proposed State policy here, with respect to the question of

utilities, and terminals,.which in effect, says that the State of

Delaware should maintain the final sign-off on location of these

facilities. Essentially, we feel that Delaware should be on top

[Page 16). "Delaware should assume regulatory and operational

control over any future sites or rights of way for marine terminals,

bulk transfer facilities, or utilities, including pipelines."

Now, that's a big can of worms, but it's a great big chore

and it probably could not be done with the capabiltties that we

have on site in Delaware, within our Government structure.

CHAIRMAN BIONDI: I would like to suggest that your Committee,

in connection with it's work on the ALI Land Development Code, also

review that report by the Delaware Society of Professional Engineers,

where they have proposed Statewide Land Use Planning. We will provide

you with copies of that report.

MR. WEINER: Once again, my question with regard to coordination

with the 208 Land Use Study and Results.

MR. LARSON: We had the reso urce person from the 208 Program

serving with our Committee and they have made some comments, parti-

cularly with respect to the question of water supply and sewage

disposal that have been considered by the Committee. In so far as

the Industrial Study goes, the resultsof that study were not

available to us at the point which we were putting down.our final

thoughts on industrial policies. I don't think there are any

basic contradietions, however.

MR. BRYSON: I have some questions on Page 11 of the report.

Item 3, what do you call public shorelines? Is.this a public owned

beach or are you referring to a public use area?

MR. KUENNEN: I think that was the consensus of what we were

talking about, not to use funds in those areas that were not operated

by the State.

MR. BRYSON: How about public use areas? Just for the record,

there are no funds being spent on any beach other than a public use

beach area right now. The only beaches we are spen ding money an

are the ones that the land owners will give us an easement for

public use of@that beach as a public beach.
MR. LARSON: So the State may have already developed this policy.

MR. BRYSON: Somewhat. It may not be as far as you want to go,

and it's not as far as I'd like to go.

MR. LARSON: This all started when we began talking about what

happens every 15 years or so when somebody'i beach gets washed out

and the Corps of Engineers and the State has to build new jett4es

orsomething.

MR. BRYSON: It is extremely frustrating, and I would,welcome

any advice or comments. The next question is on the implementation

at the bottom, of the page. We can't get enough money out of boats

and park fees to even maintain boat ramps and park fees at this p6int.

Your goal is well intended, but the source of revenues are not going

to work.

MR. WEINER: I had two questions that go to some broader policies.

There are recommendations here that suggest the interjection of the

State in the local planning and land:use policy questions. Are there

any conments from your Committee about the whole question of those

powers which have been delegated to the counties or to the local

municipalities versus those that the State, recognizing that the
police power under which we do planning and zoning is the power of

the State, which it has by law in many instances delegated to other

municipalities or counties. There are suggestions here which indicate

that the direction of the report is asking for the reassumption of

some df some of those powers by the State and outlining that they will

be removed from the jurisdiction of the municipalities or local forms

of government, including eoun ties. Is there any place in which

those powers and that kind of structure, which would accompany your

recommendations, has been thought through or that we will get some

kind of an outline on it.

MR. LARSON: Only so far as there is 'sentiment for the development

of a Statewide Land Development Code, which we presume would supercede

all existing delegations of power. It would deoegate power, no

question about it, but it would probably supercede the existing

planning and zoning legislation.

MR. WEINER: Are you proposing the addition of another tier of

regulation, or are you selectively taking back certain power s to the

State and reducing the powers of the municipality or of the county

which it currently has. I think there are two paths here.

MR. LARSON: I can't answer that because I think what we're

really asking is that, if the Commission agrees that we should go

for the development of a Statewide land development code, we would,

in effect, be starting with a clean piece of paper. The legislature,

presumably, with the input from the various other political powers

that be in this State, would make a decision and would make a decision

on what was to be delegated.

MR. CONAWAY: That is not the impression that I had. The

impression that I was left with as a membbr of the Committee was

that this would be another level - a code that would be used to

make surethe counties and the municipalities follow these set

patterns but that it would be superimposed over the whole thing.

MR. LARSON: It's possible that it could work that way. For

the members of the Commission, as you can see, there is some
considerable uncertainty about how this would work. I don't think

any of us is an expert at it at this point., We do feel, however,

that there is little coordination at the present time between the

land development policies of our local governments and what may

be'the merging Statewide policies on Community Development and Land

Use. These emerging policies may represent an axis of power that has

not existed in this State for many years, an axis of power that will

wed the agricultural interests and the very urbanized interests along

with conservationists. It may represent a stream of thought that will

lead to more power going to the State government.

MR. WEINER: I just want to make the record clear on that. I'm

holding no grief for for example New Castle County's Mickey Mouse

system of land use control or zoiigg - and Mitkey Mouse Is for the

record - in case anybody has any illusions on it. I.simply think

that this is oneoof the areas that the Delaware Tomorrow Commission,

if it's going to perform the service, needs to deal with and to reconcile
and to make clear what it is that it's looking for, on the other hadd,

where the local and municipal governments and the county authorities

have their position. My second question, which is found on top of

Page 11, relates maybe to what Mr. Rygn was atking about before, was

do I understand the statement that Delaware should continue protection

of coastal and estuarine areas throughout the State, as a flat

statement, to be an endorsement of the current coastal zoning practices

and law. Is that what it's intended for?

MR. LARSON: I think so because earlier we had proposed some

modifications, and the majority of the Committee felt that the

existing law-should remain.

MR. BRYSON: In that vein, is the feeling that the Coastal Zone

Act, as it now stands, is a great act?

MR.-LARSON: Certainly as a pioneer effort in trying to manage

a Coastal area, the Delaware Act is a landmark and it may go in the

National Historical Register someday, but there are some who feel

it can be even more effective and even more closely tied to some of

the economic policies of the State than it is today. However, our

Committee felt it should continue as tt is presently written.

MR. WEBB: Mr. Larson, when you say should continue "protection

of coastal and estuarine areas throughout the State" there are

estuarine or wetland areas which are not within the Coastal Zone.

In other words, are you talking about the Coastal Zone and the greater

area of wetlands or estuarine lands, for example, the Chesapeake drainage

area, which is not in the Coastal Zone, the Nanticoke River, for

example. I don't think that comment i s specific enough. I think

it ought to be broader.

-MR. COOPERSON: I'm not quite sure that I understand Mr.
Webb's,point when he says coa.sta.1 estuarine areas. Cypress Swamp

is, as far as I know, not an estuarine area, it is a fresh water

swamp. I think you all realize from what's being said here there

was a good deal of differences in the Committee. We were concerned,
as people on the outside, not to try and write laws (there were
Hyyers on the Committee but that wasn't their function there) but

to establish a policy. As I understoodift, there was no question

that there might be amendments to the law, but essentially the strong

protection policy for the coast and the coastal wetlands was what

was desired.

MR. WEBB: I'm talking about the interior wetlands that are

not in the coastal zone. I am saying th at it's not broad enough.

I'm not attacking it on it's narrowness.

MR. COOPERSON: There is another portion of the statement of

the Land Use Committee that deals with natural resources other than

coastal areas, but we felt that this should be addresed separately.

MR. BRYSON: The current Wetlands Act covers what youtre

talking about, Skip.

MR. WEBB: That's right. The borders of the We tlands Act are

different from the borders of the Coastal Zone Act. Which are you

talking about--the larger or both? I mean John can show you maps with

quite a lot of dtfferences between the Coastal Zone Act and the Wet-

lands Act, right John?

MR. BRYSON: The Wetlands Act does include the Cypress Swamp

and some of the larger swamps. I don't think the marshes a re covered

by the Coastal Zone Act.

MR. WEBB: There are some areas.in lower New Castle County that

would be in the wetlands.but are not in the coastal zone.

MR. LARSON: At one point, we had a whole shopping list of

natural resources,'but the problem was that we.kept adding them.

it reached the Point where we.were afraid wedd leave something out

so we just didhft put all of them in specifically. In fact
one that we didn't put in was.swamps, as a matter of fact, we.
had about everything else, including ponds,

MS. SLIGHTS: I think the intent was, though, that these

things be included, that it was an all-inclusive policy.

MR. THORN: As a memb er of the Committee, I would agree with

that statement.

MR. WEINER: I still am not clear. I'm raising a question...not

arguing a position. The sentence says "Delaware should continue

protection". Is this a flat-footed statement of unqualified support

for coastal zone, and wetland, and swamp, and flood area legislation

which currently is on the books, or is this a statement that Delaware

should protect those areas? The word "continue" has got me confused.

Now, it's either'one or the other. I would ask the Committee to refine

this to say what they mean,,because. the Economic Development Committee

apparetnly bowed out on that subject, and it would seem to me that this

Committee has to do it, or somebody has.to.do it,,and I think that at

some point it is a critical policy question for a..State which is no

more than 10 miles wide at some point where two miles. or 20% of the
width of the.State is affected by,a single piece of legislation.

I think we ought to be very clear on what the policy recommendation

is from this Committee.

MR. WALTON: I want to give our Chairman somessupport, Mr. Weiner,

before he has to answer that question. @One of the reasons that this

area has not been more specific was just the,limited time with which

we had to work. Tha't.'s the main reason. .-We could.have spent hours

and.hours on this one subject and maybe come up with a full page state-

ment. which would have brought a lot of controversy. You notice

there were some of us who did not vote, of which I am one, and there
were some of us. who voted against it. I'd like to point out the reason
being is just what you're mentioning, Mr. Weiner, that the policy

statement is not knexplicable, but it leaves a lot to be desired. This

is an area which we thougt the full Commission should be faced because

our sub-committee was not going to resolve.the whole thing anyway.

About the Wetlands, Act,,add all the other Acts, and the Coastal

Zone Act, there are those of us who are of thlac-,sdhool of thought

that you can't dvaw a line at 20% of the State'. you have to talk

-school of thought, how are
about the whole State. This being a major

you going to separate the 20% out of all the Coastal Zone. There are

those of us who think.the Coastal Zone runs clear to the Maryland. State

line,.and there ave those who wrote the law who think it stops at the

Delaware Bay. These are things. that are not answered and we couldn't
vote for a policy statement.

I have a question Mr. Bryson: Is State policy now not to pay

money torestore beaches unless they get access to beaches?

MR. BRYSON: That's right. We haven't spent any money on'a beach

@thlt the owner didn't give us right of way for public use. That is

an unwritten policy, one that I have been carrying out, not.something

that the law dictates.

MR. GILLIAM.: I have a direct response to Mr. Weingr's poi6t. As
a member of that Comittee,.it is not my understanding that that was an

enforcement of an existing Iegislation. I agree that,that should be
made clear and perhaps the Committee.ought to work on it.

MR. RYAN: It seems to me that when the.Delaware Tomorrow Commission

was appointed - when it was recommended by the Governor to have such 6

Commission the reason for tt was the controversy of the Coastal

16ne Act.

CHAIRMAN BIONDI: I don't accept that. I think we're concerned
with large scile problems of what this State's going to look like

in the future.

MR. RYAN: This is my opinAin. My opinion is that the �overnor

,felt thAt something ought to be done because we're baving the urns

up and down the State on the Coastal Zone and he decided to draw

up this Delaware Tomorrow Commission. But there's been very little

effort put i.nto one of the most controversial subjects that have come

up in the State of Delaware in the past two years and that's the Coastal

Zone Act. This Committee says they didn't put that much effort into

it, the Economic Development Committee says they didn't put that

much effort into it, I don't know what the next Committee's going to

say, but it has been a problem in the State of Delaware. It's been
a recognized thing throughout the nation that the State of Delaware is

an anti-industry State. If we don't have that recognition, we're

.certainly putting a.lot of effort into the Future magazine as far as

putting ads to try to get people to come into the State, we're putting

effort into this, and I think there ought to be some effort by these

three Committees into the Coastal Zone Act to see. Everybody has

said that we don't know.

CHAIRMAN BIONDI: I think the Coastal Zone Act is a specific

problem which the Commission is,goingto have to address and an

important problem. But, overall as I look at the report of the

Economic Development Committee, which is concerned with -industry

throughout the State, all forms of industry, and as I look at the

Land Use and Community Development Committee report, which is really

talking about a set of policies for all levels of governmentt for

all kinds of residential, commercial, and industrial groups, really

the quality of the State we're going to live.in, and as I look at the

Cost of Public Services Committee report, I don't think that this

one issue has been treated badly. I think it's probably been given

the attention it deserves up to this point in the Commission's

proceedings.

MR. RYAN: Mr. Thompson said earlier that we really can't do

too much on the Coastal Zone because it takes a little more effort

and a little more meeting, but one of the reports of the Economic

Development Committee, on March 13, says the Coastal Zone Act

should be rewritten.

CHAIRMAN BIONDI: That was a draft of that Committee's report.

Before the Commission is through it's work, we're going to have to

address ourselves to this problem. 1here are a broader range or

problems and I wouldn't be spending my time on this matter at all

if that were the only issue. It's an issue that can't be ignored but

some of the things which are being suggested here are very fundamental

to the future of the State and are ofaa broader context.

MR. RYAN: I agree with you. However, the question was.brought

up about the Coastal Zone, not just by me, but by other people in

this room and they said that it'L'such a broad issue that we haven't

enough time to do it. I'm saying that maybe there ought to be

some effort put into that one particular.subject.

CHAIRMAN BIONDI: Well, I think before the work of this

.Commission is over with, you're going to hear more of it.

MR. WALTON: Just to set the record straight, Mr. Ryan, I

said that we did not spend a disproportionate amount of time on

the Coastal Zone. I felt that we spent a lot of time on the

Coastal Zone. I'felt that we spent a lotof time on the Coastal

Zone in our Committee. The Chairman should speak to this issue.,
I think the time spent was in proportion to.the concern of tssue

that it is and it took up more time, on our Committee, than any

other part of our work, just to set the record straight, because

somebody's got the idea that we shortchanged them.

CHAIRMAN BIONDI: I agree with Mr. Weiner's position with

respect to the recommendation ought not be subject to 100 inter-
pretations, the recommendations ought to be laid out, but I would

like to see it done in the context of considering, not just the
Act itself, but considering the American Institute Land Development
Code, considering the report of the Society of Professional Engineers,

which recommends Statewide Land Use Planning. Mr. Walton alluded

to it a bit when he said that he thinks the Coastil Zone extends

to the Maryland Border.

MR. WEINER: 'I want to make this point, because I've now

heard the ALI State regulations mentioned.so many times, for fear

that someone would say that for the record,.nobody raised the

Spector of a monster of the undesirability, conceivably of the.ALI

regulations, let me please introduce the fact that, until youlve

read that voluminous piece or document, and have examined it

carefully, and I don't know who in this room has, that we should

proceed very cautiously and clearly to understand whether we want

to impose that on our State, and not to make the assumption that,

simply because the American Law Institute spent seven years preparing

the document, that it is either useful or necessary document in the

State of Delaware. I just put that caveat out because it's been

mentioned-so frequently that, if there isn't,some voice raised,

one might assume it was gospel.

MR. COSTA: I would like, for the recordi to express my concerns

with the word "to co ntrol" because I think it is a very conflicted

and very stnsitive word. It can be good, but it can be very

stifling. But the three counties, with their differences and with their

competitiveness, I think it's a very good thing, but the waste of

separate effort, time, and money, to a common cause is bad. For
those who rule or make decision, it is.very healthy to delegate authority

because if either the county, or the State, or the federal government,

have absolute c ontrol, and this is my concern (control can be
anything relative) it could turn tossom6thing that in other places

is called tyranny, or dictatorship of sorts. I, unfortunately, have
on.ly been present at two of the meetings of Mr. Larson's, and I wasntt

aware of this tendency to control.

COST OF PUBLIC SERVICES COMMITTEE

MR. KREIGER: I'd like to change the format of the presentation as

given by the other Committees, I'd like to have my Vice-Chairman, Dr. Latham

and Dr. Brams (University of Delaware staff), aid me in giving this pre-

sentation. Our committee had the task of analyzing the. Cost of Public

Services with respect to our State, and I can happily report that we

achieved a first with the three Committees, as we have no dissenting

opinions and we don't have any minority reports. Ourreport is a factual

report. We won't have any controversy over it. The Committee had

approximately 14 meetings, which count the sub-committee meetings and

probably involved a mininium of 800 to 1,000 hours of work. The final

report consists of about 50 pages, which Mr. Keifer will send to all the

people who have not received a report today. The report is basically

broken down into two areas. One has to do with the revenue services

for Delaware as'a whole and Delaware as-a whole is broken down into

subcategories of the State of Delaware and then the local portions,
which is further broken down into the three counties of New Castle, Ken' t

and Sussex, and then the City portion (we used the three major cities--

Wilmington, Newark, and Dover.) We couldn't obtain the information on

the smaller localities and the Committee's feeling was that they were not

of major significance so that what you see in the report really is the

main gut of what th e costs have been. The revenue portion, which we

referred to as Section A is broken down further with respect.to the per

capita figures. We made another analysis showing what the portion of the

revenues are broken down by Delaware sources and by external sources.

What we mean by external sources is the federal revenue sharing funds,

which have a large impact on our State and also we considered as a special

category, the franchise taxes, which are rai.sed by the State of Delaware,

and which we felt should be dealt with separately because of the fact

that most of that revenue_is not produced by Delaware sources and is

sort of external. The figures with respect to the revenue will be commented

upon, after I finish my opening remarks, by Dr. Latham. The Cost of

Public Services, which we refer to, in our report as Section B, has been

broken down in a format which we felt was most important because it's

never been done before in the history of the State, and it had not been

available, andthose figures are broken down on an operating basis, and

a capital expenditure basis. Those number, which are presented in

Section B, are very significant and meaningful. Again, comments pertaining

to this section will be given by Dr. Brams, who headed up that section.

I might add that we had approximately 35 or 40 other reports before

we adopted this format, which is on a functional basis so that you can

see, for example, the cost and the expenditures of our Government (when

I say our Government--that's the overall encompassing title of the State

expenditures, the County expenditures, the major cities expenditures,

and education expenditures.) Education, I might add, is today about the

biggest expenditure that the State has.

We didn't for internal purposes, make any comments or review of the

tax policies of the various functions of the State or the operating agencies

within the State or comments on whether or not, as some of the other Committees

did, the income tax rates are correct or not correct. What we in effect

analyzed was all the income and/or revenue sources of the State from

1968 to 1973 and we also analyzed all of the costs for the same period

of time 1968-1973. The .1974 reports, when we started, were not available,

and they are not included in the report. We would also like to bring

forth to those present, and to the Commission, the fact. that one of the

things that will stand out and is app arent,.which is something that cer-

tainly ought to be considered is the fact that the State of Delaware

doesn't have large surpluses, as some other States in our Country do.

Just be coincidence, there's an article in lastnight's paper which refers

to the fact that, of the fifty states, Delaware's in the group of

approximately six or seven that don't have any surplus reserves and can't

dip into monies that have been built up over the years. We are living on

a hand to mouth basis.

CHAIRMAN BIONDI: Asked for an explanation of how to read Table A

of the Committee's report.

DR. LATHAM: In Section A, the table presented there are simply an

attempt to look at where the revenues that the State has generated at

both the State government level and at the local government levels over

the last five years. Contrary to the Economic Development Committee,

this Committee felt that the last five years would give a sufficient picture

of the history of revenues. If you look at these,numbers, you can see

very dramatic changes in this short period of time, and going back 20
years for examinations of State revenues.and expenditures-is not as useful
as.a similar. process would be for employment analysis.

The first table gives the totals for revenues by all levels of

government, including school districts, with the exceptions that aren't

already noted that excluded are the small municipalities and any.other

governmental agencies that we might not have been aware of that receive

revenues. The top line in each.table refers to the entire State, and

the title is Ma jor Delaware Revenues, just to indicate that it's not

really quite total, but it's very close to being total revenue. Then the

table breaks down the major revenues to those received by the State

Government, and those received by some of the major local governments.

In Table 1, general and special funds were combined for one.total. This.-

is one possible total for State revenues that you can come up with.

In this Committee's work, there has not been an attempt to reconcile

everybody's different revenue numbers. These are based on the State budget

'and include both general and special fund revenues.

MR. BRADFORD: With one major exception, the attempt here is to show

revenue in relation to expenditures. This is an attempt to take revenue,

regardless of where they come from, that end up as expenditures, on

Part B. It is an attempt to refine receipts of money, of some sorts,

that are used as expenditures. Therefore, you will not find these figures

.anyplace else. The backup documents do have a breakdown of these figures.

M: There is a kind of consistency in these figures. The
DR. LATHA

fact that local governments expend some funds that are received by the State,

is accounted for here,by simply noting that they are,received at the

State government level. This is supposed to be reflecting point of receipt

of revenues and not point of expenditures of revenues. So, we have a

breakdown that goes from S tate go vernment down to the three county

governments, and the three major municipalities and the school districts--

within the counties.

The following two tables break them down into those that are basically

Delaware-controlled sources, and those that are beyond the control of

forces inside of Delaware.

All franchise taxes are excluded from Delaware sources, even the

franchise taxes of corporations that do business only in the State of

Delaware. It can be argued whether these funds are beyond the control

of the State or not, but you can also argue that additional funds ought

to be considered the control. That's the position the Committee took.

MR. WEINER: I think what you were trying to do in your methodology

was to take a look at the Di vision between what you can raise from local

sources as distinquished from what comes in from external sources. I

think that the question is: is what you did clear enough to be able to

give you enough to make some policy decisions on?

MR. WEBB: Expressed interest in seeing a breakdown of the totals

in order to see how they were reached.

MR. BRADFORD: Probably the greatest difficulty this Committee had

was to reconcile 75 different methods of recording revenues and expenditures.

We had to chose. The figures are available. We ask you, on faith, to

accept that we did our homework, and accept that these figures are in

the order or magnitude of the expenditures and the revenues of the State

of Delaware. They may be off by 3-5 percent.

DR. LATHAM: Went on to explain the breakdown of the tables in

greater detail.

A lengthy discussion followed on the detail of the tables in the

Committee's report.

DR. LATHAM: These figures are-not saying anything about Delaware

Tomorrow. They are simply saying this is what's been happening over the

last few years. This particular Committee was really unable to say much

about Delaware Tomorrow with respect to cost.and revenues, without some

knowledge about the form of growth in the future; how many people are

there going to be, what kind of industries are there going to be, and where

are these people industries going to be located, because that will

critically effect both revenues and the expenditures.

It would be dangerous to attempt to project State revenues on a per

capita basis. Presented here are revenues on,a per capita basis, as they

exist right now, but I do not feel it would be legitimate to take the

State's projected population figures generated by the Economic Development

Committee, because some revenues are not tied closely to population and

other revenues are tied closely to population.

Care also has to be taken in trying to add up the per capita figures.

The only people for whom per capital expenditures are kept are the residents

of the three cities. To add together revenues for a person living in Wilmington,

you add up the City of Wilmington revenues, New Castle County revenues,

and State level revenues and find out what the total revenues collected

for a resident of a City is. But it would be dangerous to say that that

represents the revenue collected from the residents in those cities, be-

cause we know that alot of the revenue payments, in the case of Wilmington,

come from people outside the City.

There is also a danger in trying to compare some of these numbers

for Delaware and similar figures for other States, because of differences

in levels of service provided and also differences in the kind of govern-

ment organization that exists in other'States compared to Delaware.

There are just some cautions in trying to do too much with what's

been presented today.

CHAIRMAN BIONDI: As you look at what future costs are going to be,

will you be using the same population statisti.cs, that the Economic

Development Committee is using here?

MR. KREIGER: We'll use whatever is determined to be a valid number

in the future.

MR. WEINER: There are two or three things that are lacking, at this

point, to enable the Commission, as a whole, to move forward. One is that

welve got general revenues or totals of revenues by area and by number

of years, but the sources haven't been done. I think you need to look

at the sources. Basically, the Delaware Tomorrow Commission is going to be

looking at whether we make decisions or recommendations that there should

be growth, orlack of growth, then it's going to effect the question of

what kind of policy flows from who pays for what public services. At that

point, you get into the population projections for the future, or on a

per capita basis or otherwise. While this is an excellent start, I think

the Committee has not yet tackled the question that we're going to have
to be confronted with. They have not tackled it because I wo6ld think

that the other two Committees have to set down some kind of policy criteria

for this Committee to begin to project into the future and I think there

is that difficulty of making those projections, whether it's for population,

or sources of funds, or the kinds of public service or public interest

expenditures that are needed. In a sense, their work is not completed,

for those reasons.

Section B of the Committee's report was explained in great detail

by Dr. Brams. He explained that Tables 1, 2, and 3 are really all the

same data presente d in different ways.

MR. BRADFORD: The attempt of this Committee was to get a data base.

Admittedly, it is a first step, even as a data base, and we will do what

we can to refine it and we will welcome your questions and suggestions,

but the major contribution to the Commission's work has not even begun,

as far as we're concerned, and probably shouldn't be.done until we have

some guidance. Any trend lines you see here in the past may well be changed.

Our job is going to have to be to take the best estimates of the kind of

people'who will be-furnishing income, and thekind of expenses and where

they take place, before we can come up with costs, or where those funds

are coming from, or what will be the impact upon State government if

the average income of people goes down in relation to the present dollar

level. Where will the income tax be? This is the kind of information

we will have to spend our time on.
MR. MO RTON: I would like to cl'ose on a note of caution, as you take

.this material home and attempt to look over it more closely. There is

a thread that runs through all of our presentations today which makes

extrapolation of data a risky venture, at best. As you look at this,

you'll see the capital expenditures are rather erradict and are much more

closely related to the pattern of growth. By pattern I mean, timing, location,

and type. On the other hand, operating expenditures correlate much closer

to the overall magnitude of growth. In going through this program, we have

established a historical perspective and an analytical method of s tudy,

which I think will lend itself well to ca rrying this work further into the

future when we have the data from the over groups and guidance from

the overall Commission.

MR. WEINER: An attempt by this Committee to try to look into the

future (on the issue of demand for governmental services) is impossible.

What I think is important, and wh at I think the Committee and the Delaware

Tomorrow Commission has.to do, is to lay down some general patterns of

policy of how we pay for public services. There is currently in New Castle

County, and with the State Highway Department, the theory that the new

resident should pay for his own sewer, water, etc. This is a new notion

of the fact that those of us who get here earlier had our sewers and roads

built for us, but now the new residents should pay for every bid'of service

that he gets. Maybe that's the direction that the State of Delaware wants

to pursue. The general direction of policy of how we pay for public services,

and where we should be going as a direction, is what I think would be

important here.

On the other side of the equation should be some kind of a tax policy

which has some equity and is not regressive. I'm not sure that I want to get

into that or that you want to get into that, but I think that some suggestion..

which talks about the burden of payments for public services is important

if we're going to make a contribution to the State or to anybody else. So

definitive figures, that are based on statistical garbage, are going to

come out garbage. If they're based in terms of direction.and guidance as

to where we're going to go, then I think.it has a 'value.

MR. WALTON: The thing that's lackingl as a result of the time constraint

the-Committee worked under, is the major cost of public service s and that's

the federal portion. The Delaware Tomorrow Commission should be ever

mindful of the federal costs of public services. It may be too much to

do, but I think the people who read what this Commission has to say should

know exactly what portion of their dollar is being spent by the Federal

government and for what services.

MR. RUSSELL: We should keep in mind that the commitment that the

local and State governments take on when they get involved in some of the

federal program is the kind of commitment that will have an impact o n some
of the policies weire talking about here. There has been very little talk

about what kinds of commitments and how far out they will stretch.

MR.,BRYSON: I'm concerned that Delaware Tomorrow is going to be just

like Delaware Today, unless we take some review of the cost of public

services today, one versus the other, and try to get a handle on that, so

we can determine whether or not the cost of each public service is reasonable,

rational, and if it is.something that should continue. I don't know how

you do that job.

CHAIRMAN BIONDI: One of the things that the Committee is assuming,

I believe, is that the demand for public services has historitally been

at a certain rate and is not going to dramatically change. If you want

to cut taxes back and give everybody refunds, and abolish State programs,

you're talking about a change in our society, and the way we.do business, which
is beyond the scope of t he Delaware Tomorrow Commission.

MR. KREIGER: We considered making comments with re spect to performance

by various functional categories, and it was decided that we would not make

any-comments because it was beyond the purview of what we originally set

out to do.

CHAIRMAN BIONDI: We've got reports, in their curre nt status, from

these three Committees. The Economic Development Committee is going to

meet again and go over the 1953-1973 work force and employment data and

compare that data with what's been developed in the 208 plan. They will

prepare an addendum to their report based upon that study. They're going

to give Toby Ryan an opportunity to argue to them again, or file a

dissenting report, or revise the majority report - depending on how

pursuasive he is.

Pete Larson's Committee is going to be talking about a land development

code. In connection with that, some parts of the 208 study will be looked

at. They will also take into account the report by the Delaware

Society of Professional Engineers.

The Cost of Public Services Committee has accumulated some data and

they have some ideas on how they can approach the future, but we've

got to try and give them some guidelines, from the other two Committ ees as

to what the future's going to look like.

With that in mind, how should we proceed from this point with the

Commission in the consideration of these matters? One idea is to ask the

members of the Commission to submit, within a reasonable period of time,

their documents with respection to the reports that have been received

not only with respect to reports that. have been received but with respect

to other things the Committees haven't considered that they thing should

be considered. The Committees are composed of members of the Commission and

non-members of the Commission. I think that we ought to give the people

on these Committees the opportunity to look at the questions raised by

members of the Commission. We ought to refer the comments and questions

raised by members of the Commissi.on'back to the Committee s and allow them

the opportunity to review those and respond, before we proceed to adopt

position which will become the position of the Commission in these various

areas. How do you think we ought to proceed to do this?

MR WEINER: I think we need a period of two weeks when we read and

review and digest what we have received today, and come back with written

comments. It would seem to me, the Committees should ao back to the drawing

board on some of their drafts. Until you've taken those two steps you
can't set a timetable beyond,'it.

MR. WALTON: There have been a great many differences of opinion

expressed here, but if you read,the reports, there is much material that

is agreed on by the Committees. It appears to me we need some kind of
a fourth committee that would take what's in the reports now, that has

been agreed upon, and set that aside, so somebody can start collating the

kinds of questions that there are differences on, so when we meet as a

Commission, we can get to the hard job of nailing those questions down in

terms of debate, or whatever is going to happen.

CHAIRMAN BIONDI: The difficulty with that, at this point in time, is

that there is substantial agreement, for example, between some aspects of

the Economic Development Committee report, and the report of the Land Use

and Community Development Committee. But that only reflects certain agreements

between members of those two Committees. It does not reflect the common

agreement of the members of the Commission with the contents of either one

of the reports. What we need at this time is a period of comment, I would

say two weeks for members of the Commission to comment on the three reports

to the Technical Advisory Committee and ask the members of that Committee

for their comments on it; then give those comments back to the Committees

so they can review those comments and come back to the Commission. It will take

a little longer to do it that'way, but it's a substantial amount of work

has been done, and we've got to proceed as fruitfully as we can at this

point. If we don't make the deadline of June--then we don't make it.

The comments should be identified, refer exactly to the report and the

section you're referring to and then Submit them to Mr. Keifer, who will

channel this information.

MR. WEINER: I do think,short of waiting until the other two Committees

report, that there should be anexai,0nation of onc, or two questlons that

were raised here be-fore. On the quPstion of thc, contribution,

cn the revenue side, for example, in the cost of puhi ic. service, you have

extracted all the federal contributions, on the expendituie side, you've

included them. If you're. goir.(j to make. any kind of qualitativ.e analysis

tcward a general policy, the federal shalre has to be separated out.

That's one thing we have to know if we're going to look toward policy.

MR. RUSSELL: One point of warning, we are concerned that there has

been much mention made of the 208 Program. Except for a very few number of

reports and projects that have been approved, most of the data that has

been coming out of 208 at the present time is draft only and should be

accepted as such. We've been warned by the project people and by EPA to

keep that in mind.

'CHAIRMAN BIONDI: The deadline for getting cononents in to Mr. Keifer

will be April 22.

DR. BRAMS: I have one comment in the context of the Cost of Public

Services Committee, you may have very well come to the conclusion, given

the problematic nature of forecasting revenues and expenditures ten years

in advance, that you might, in fact, not want to do it. My own feeling

is that the problems, are such that you could generate a set of numbers

to fairly simplistic assumptions, but in terms of.the validity or the

usefulness of the numbers, it may, in fact, not be a very good way for the

Committee to spend its time.

MR. WEINER: As a matter of policy, I think it's very important to

forecast for the future, or else that Committee will be just chasing its tail.

MR. MARKELL: We've-all seen difficulti,es of projecting just population

and how wrong those projections are. If we try to project revenue and

expenditures on the basis of population, we are really going to be in hot

water if we go more than just a little bit down the road.

CHAIRMAN BIONDI: But again, we'll probably come out with a set of

guiding principles rather than a set of numbers to shoot at.

The meeting was adjourned at 5:45 p.m.

Respectfully submitted,

Dee Burkley

STATE OF DELAWARE
DAVID R. KEIFER PLANNING OFFICE PHONE: 1302) 678-4271
DIRECTOR DOVER
Ref.: 1007-1404

DELAWARE TOMORROW COMMISSION

Minutes of Meeting of May 27, 1975

A meeting of the Delaware Tomorrow Commission was held on May 27, 1975,

at 7:00 p.m., in the Library of Buena Vista.

The following members were present:

J. H. Gilliam Jr. Dave Keifer
Leon Weiner Fred Krapf
Jay Cooperson Representative-Seibel
Carl Oldach Theodore Ryan
Senator Berndt Dorothy Greer
Secretary Bryson Frank Biondi, Chairman
Secretary Daniello
Ernest Thorn
Secretary Hall
Carl Russell
Joe Conaway
John Walton
Joann Slights

Also attending:

Skip Webb Jane Aughey William Latham
Dave Hugg 'Peggy McLane William Bradford
Henry Ridgely Rita Smith (attending for Mrs. Marcie Bierlein, but
Marvin Brams not a voting proxv) Michele Kudish
John Morton Dan Kuennen Eric Brucker
Arthur Krieger Gerald Cole William Markell
Spencer'Thompson

Mr. Biondi called the meeting to order. He requested a copy of the Draft

Report of the Delaware Tomorrow Commission be, distributed to everyone present.

First, Mr. Biondi mentioned the Report of the Economic Development Committee.

9ff A&
EXECUTIVE DEPARTMENT
SHERMAN W. TRIBBITT

noting that the Committee had submitted its report on April I and subsequently

an addendum had been prepared by three members of the Committee. This addendum

concerned two specific matters: (1) the Coastal Zone Act, and (2) the reduction

of the inqve tax level (19.8%).and reduction and.change in the capital gain

tax (100%). These are the two controversial issues within the Economic

Development Committee.

Second, the Land Use Committee filed its report on April 8. Since the

last Commission meeting, the Land Use Committee met. This meeting r esulted

in an addendum to itsreport, dated May 15, 1975. This addendum deals with the

problem of a statewide land use plan and the recommendations of the Delaware

Society of Professional Engineers with respect to the Coastal Zone Act.

Last, the Cost of Public Services Committee prepared its report and no

addendum has been prepared as of now.

Also, the Commission prepared a preliminary draft report. This report

was done by Dr. Bill Latham, of the University of Delaware, under a consultant

contract (between the Univ ersity and the State Planning Office). This report

was based upon: (1) the Executive Order #43, issued by Governor Tribbitt;

(2) the minutes of the Commission meetings; and (3),the three reports (mentior3d

above) of the Committees.

The purpose of this preli minary report is to attempt to verbalize what

is contained in the three Committees' reports. Action on the preliminary report

of the Commission will be taken at a laterdate.

The Repo rt of the Economic Development Committee was first considered by

the Commission. Mr. Biondi proposed the Commission examine each recommendation

except for the two issues where disagreement exists. These two issues will be

considered separately (either by the Committee first, then by the Commission;

or by the Commission directly).

The first part of the report identifies the economic needs of the State;

the second contains the recomm endations to meet those needs. Mr. Biondi

suggested that recommendations 1 through 14 be considered b' the Commission
y

and recommendations 15 and 16 be considered at a later date.

Chairman Biondi opened the floor for comments and/or questions from the

members.

I.l. (page 1)@: RATE OF POPULATION GROWTH-,

Mr. Wiener raised a general question with regard to the approach to the

population rate of growth and the way it is used in the development of the

report. It fails to take into account that the critical question is not total

population but number of households that will be affected and will reflect the

character of economic job needs, housing, etc. At presen t, family sizes are

dropping and the birth rate is lowering, but household formations are up over

1,600,000 annually and indications are that household formations will grow more
rapidly. Also,, the increase in longevity will reflect on the households of

senior citizens (although small households). This number will continue to

increase our,needs for,housing, jobs, etc. These phenomena have been ignored

in the consideration of needs.

Mr. Thompson asked Mr. Wienerwhat would the significance be on the number

of households in terms of economic development. Mr. Thompson said that his

Committee approached the problem in terms,of.job opportunities -as to whether

or not Delaware would have a more rapid rate of growth to provide jobs for the

existing population.

@Mr. Wiener explained that if there is an average household size of,3.2
or 3.7 and an average size household that is rapidly dropp.ing to 2. 7@ or@'2.8 the

number of jobs or the income producing opportunities.are per household rather

than per number of.people (this is not con.sidering multiple employment). The

number of dwelling units is not dropping in the same.proportion as the total

population is dropping. So, if calculations are based only on population

(397,600 by 1986) and dividedby 3.2 (or 3.7) a different result will be

obtained than if the figure of 2.7 (2.8).is used. It was noted in the report

that the number of jobs would not drop in rel,ationship to thelowering of the

population in the same ratio. However,,the calculations were only based on

population figures and not on household numbers.,

Mr. Thompson said that the report considered the amount of people who will

be coming ihtb the market looking for jobs. The number of household is not

germane. There will be,more women going into the labor force in the next ten

years than there have been up to now. The thrust was to.anticipate the size of the

labor force.

At this point, some further clarification was made by Mr. Krapf. He felt.

that more people will come into the job market because there will be fewer

children who will not be.seeking employment, therefore the ratio is greater.

Mr. Krapf mentioned the.computations made by Mr. Davis, of.the Diamond State

Telephone Company, who discussed.this same matter at the last meeting of the

Economic Development Committee. If at the moment, in a family group, the number

is 3.7 and it will drop to 2.8 it'means that there will be more people percentage

wise looking for employment. Th e true,importance is that: do we want the State

to grow or not.

Mr. Wiener took as example the need for telephones,compared to the number

of people per househould. Mr. Biondi agreed with the fact that with the same

amount of people if more households are formed,,there will be more needs for

telephones -.but he questioned how a greater number of people can be coming

out of each household into the job market when the women labor force has

already been accounted for, the younger people coming into the labor force

as well as people living longer.

Mr. Bryson commented that Mr. Wiener's point should be considered. He

explained that this phenomenom will be felt in ten years from now. The trend

now is 2.8 persons per family unit and the population remaining equal, there

will be more people employed to keep these family units and this does not

necessarily mean the woman working.

Mr. Cooperson commented that the question is not what the economic impact

of the greater number of households is - which is clearly going to be different

but how the number of people seeking jobs is arrived at objectively. The first

part of the report deals only with the question of how many job seekers will

Delaware have to deal with, not what the total demand generated in the market

will be. Obviously, if there are six people and there are two persons per

household, there is a need for three houses (this is one impact). If there are

six people and there are three persons in each household,.there is a need for.

only two houses (it is a different kind-of impact). Yet, the amount of job

seekers remains the same.

The point that Mr. Wiener was ma.ki ng is that if the population number remains

the same but the number of people in each household decreases from 3.2 to 2.8,

each,unit will have to be economically supported. There will be more.people

going into the.job market as a result. The question is how is it measured?

The Committe e partly answered this question in making two points, (1)

there will be more young people going into the labor market; (2) therewill

be an increasing amount of women seeking empToyment; but two more,points should

also be considered, the increased longevity and maintenance of increasing

amount of households.

Mr. Biondi asked for Mr. Lat ham's opinion as to how one can measure the

impact of this factor. Mr. Latham replied that he would have to look into the

labor force change. At this point, he did not know exactly how the house hold

formation affects the labor force participation rate differentially from

Mr. Thompson's findings. An increase in labor force part icipation rate will

occur. The question is will this increase occur at a higher rate because of

the smaller family size. Mr. Latham stated he was not sure whether it will

have an impact or not on the labor force.

Mr. Brucker said that he did not feel that because there will be more young

people working, an increase in the female force, and the household size falling

that these would be major factors in the growth of the labor force.

Mr. Wiener said he will accept the figures brought forth in the report, but'

mention should be made of the decrease of persons within the household unit.

Mr. Thompson specified that his Committee used all the resources possible

to make estimates on the size of the labor force as it relates to the estimated

increase in the number of jobs in industry. The Committee was not trying to

make an economic forecast as to how many telephones or how many houses that will

,be needed in Delaware ten years from now. That was not the question the Com-

mittee was addressing and it should not be read in that sense. The Committee

was looking at the narrow question: How large the labor force will be ten years

from now to take care of people who will want to work.

Mr. Wiener apologized, saying that he thought the Committee was trying to
consider the broader aspect of economic consequences (consumption of.energy,
need of homes, etc.) that would affect the economic well-being. He, therefore,

withdrew his comment. It was the feeling of a few Commission members that

Mr. Wiener's comment should be taken into consideration. Mr. Biondi noted that

the impact of smaller family household on the work force will be examined

as well as the impact of this phenomenom on other aspects of the economic

considerations.

1-2. (page 2): GROWTH IN DELAWARE'S LABOR,FORCE

No objections or comments were made, except as it relates to Mr. Wiener's

comments, above.

1.3. (page 3: RATE OF GROWTH IN EMPLOYMENT.

Mr. Biondi asked for comments. Mr. Oldach said that there is no real

method of forecasting.job growth so it was arb.i trarily assumed.that it would

,be half the rate, but it might be conservative. The greater growth of jobs

is solely dependent on the State's economic health. It is not safe to say the

rate of growth is going to be half of the present and do nothing about the

economic well-being of the State. If the State allows the environment to

downgrade for business, problems will develop.
Dr. Brucker mentioned that fixing a figure of 10,000 for unemployment is

opti mistic. A figure of 15,000 or 16,000 was suggested. Mr. Thompson commented
that Delaware's unemployment in the last twenty years has been below the national

average. At this point, Delaware's rate of unemployment is high but so it is

@throughout the Nation. There is no sign that Delaware's unemployment rate is

going to be higher than the national average in the long range. Dr. Brucker

said that it is unrealistic to expect a 2.9% unemployment rate by 1985. Mr. Biondi

remarked that the State will be faced with,some.serious problems if its unem-

ployment rate is constantly higher than thenational average. Mr. Bryson noted

that the Delaware figuresare much more accurate..than those of the Bureau of

Census which are about 2%'higher than reported. Mr. Krapf disagreed.with

Mr. Thompson's assumption that Delaware will remain below the national average

for the next ten years on its unemployment rate.

Senator Berndt said he feels that the unemployment rate in Delaware will

be higher than the national average within the next ten years because-not

enough credence is given to the gas and oil shortage without some viable

alternative to solve this shortage. Delaware does not have the alternatives

that the other regions have. Delaware's efforts to import have been crippled

by the programs of the federal government. This will have an impact on the

unemployment rate.

Dr. Brucker commented that he would project somewhere in the vicinity of

6% unemployment rate without getting into the question of whether Delaware is

below or above the national average. If Delaware is to have more young and more

females into the labor force, then Delaware is more than likely to have a higher

unemployment rate than the national average.

Mr. Krapf agreed with this thoug ht.

Bill Latham felt that too much significance was given to the national

average. It is the composition of the population that counts. The rate of,

unemployment cannot be divorced from the composition of labor.

Mr. Russell asked Mr. Thompson if his Committee considered the impact of

the energy crisis on transportation manufacturing in relation to the automobile

plants, and to the building industry in relation to the number of households.

If these factors were considered, the question should be asked whether there

would be much disparity between the unemployment figures advanced in the report.
Mr.Thompson remarked that Delaware automotive plants are not of the type

that are the hardest hit, as compared to the Detroit area for instance. Both

General Motors and Chrysler plants are modern and are strategically located

in terms of the eastern market. The Committee considering all these factors

and trends in industry saw no indication that there would be disadvantages in

the next years compared to what had existed in the past ten years. The types

of industries in the State are very.dynamic (chemica.1, automotive, distribution
centers) and the strategic location of Delaware caused the Committee to believe

that the.past trend would not change.

Mr. Thompson went on saying if the unemployment rate was much lower than

the national average, the State would experience in-migration; however, the

Committee expects that the in-migration will drop down significantly in the

next ten years but there.will still be enough job opportunities to take care

of the population already resi ding in the State.

Mr. Wiener said two factors need to be considered- He agreed with the

Committee's statement on page 8, last sentence; however, he questioned the

relevance of the estimate of 10,000 v. 15,000 .(of unemployed), except to the

point that the Committee on Cost of Public Services will need a base on which

to operate. It does not change this report in any way, except to anticipate

some additional costs that may be borne because of unemployment. It would be

prudent the Commission agreed to a 5% or 6% anticipated rate and try

and provide the financial obligation based on,this percentage. If the Commission

is going to look at supporting unemployment figure of 10,000 v. 15,000, then

the question of revenue supporting that base is going to be critical,

Mr. Biondi suggested that (on page 5, first paragraph), a statement be

added to the first sentence, to read: "Even if the national average with

respect to unemployment were to be 5 to 6%, the Committee's conclusion would

remain the same."

Mr. Bryson commented that if the Commission is to be concerned.about the

cost of public services, underemployment is more a problem than.unemployment.

This situation exists,in Delaware and will continue to exist in the years to come.,

Mr. Walton asked for an explanation about the balance between unemploy-

ment and in-migration. Mr. Thompson answered that if Delaware has very low

unemployment, and hi gh. unemployment exists in the surrounding states, the

in-migration will increase. If there is high unemployment in Delaware and

low unemployment in the surrounding states, there will be an out-migration or

no in-migration.

Mr. Walton c oncluded that those Commission members who believe that the

unemployment rate in Delaware will be higher than the national average will

prove Mr. Thompson's formula accurate because the in-migration will drop off.

Mr. Thompson reported that this is one of the underlying issues for the

Commission. Delaware, in the past twenty years, has been one of the@fastest

growing states east of the Mississippi. The question is should it continue

to grow at that rapid rate or will the growth rate slack off? Just a change

in the rate of growth of people employed in Delaware (and therefore the total

amount of people working) hag an impact on how rapidly land values go up. It

has an impact on how easy it is for people to change from one job to another.

There are all sorts of economic impacts on the rate of growth. The rate of

growth for Delaware is dropping compared to the past twenty years (t his has

been only for the past two or three years). Mr. Walton made the remark that

the farming industry (as he puts it: "I am representing one of the lesser

dynamic industries ...") has decreased tremendously. There aremore farms

for sale in Delaware than there ever were before. However, Mr. Walton added,

thatfarming could go.either way in the next twenty years.

Mr. Krapf said that the Economic Development Committee came up with a

problem that has to be looked into in Delaware. Does Delaware wish to keep

its growth rate at the present level, increase its rate of growth, or decrease

it. The numbers, can change by the attitude of the State. Mr. Krapf said he,

personally, would like to see the State continue to progress as it has in the

past (up to two years ago), meaning more population, more.and better jobs.

The Commission members generally agreed on the findings of the Committee
regarding the Delaware'iper capita income ranking (pages 5-and 6).

The Commission members.also agreed on the comments the Committee made

regarding the City of Wilmington's special economic and social problems.

Mr. Krieger mentioned that no reference was made to the higher education

institutions (University of Delaware, Delaware State Colleg e) or to the

Technical and Communi.ty Colleges.

Mr. Thompson explained that the Committee addressed itself only to the

problem that thE- State should do more in the area of matching the vocational

training to the job offers. Mr. Russell asked whether the Committee had

considered the DTCC and the CETA programs being funded under county and local

auspices. These programs are heavily funded toward job training. They have

been in effect for the past two years. If the Committee's considerations were

only up to 1973, the CETA programs as well as the work of the DTCC are not

reflected in the report. Mr. Bryson noted that Mr. Russell's point is well

taken, except that the work that the DTCC are doing is for base industry. No

one has geared up toward state development. Mr. Conaway said that the DTCC..

is doing just that with Sussex County. The-County requests the DTCC to provide

it with the type of trained people the County has jobs for. Mr..Daniello

commented-that the CETA programs train people coming out of other occupations.
It may be wise to wait two years tosee if the CETA programs are fulfilling
their aim. It is not certain that the people in the CETA program who are in

public employment will.remain in public employment.

Mr. Biondi remarked that the programs of the highschool/vocational

schools are the only ones on which the State can count for the next ten

years. Mr. Russell said he woul d. like to add the kind of examples the Com-

mission wants to see, such as the results of the CETA programs (Title I) in

New Castle County, and the types of results obtained in Sussex County with

the Delaware Technical and Community College. Mr. Russell agreed to draft

a few lines on the subject to add to the paragraph on page 7 of the report.

Mr. Daniello remarked that the report only refers to highschool vocation

training; but, in this day, vocational training certainly goesbeyond the

highschool level. Mention needs to be made of post highschool training.

Mr. Biondi said that the Commission will deal with this matter later.

Everyone agreed that the State does not have enough diversity in its

types of industries and is too reliant on.the chemical and the auto industry.

On the subject of underemployment, everyone agreed that it is a problem,

in Delaware. All agreed to the meaning of underemployment (the person who

is notemployed up to his skills).

Representative Siebel asked whether the Committee had considered the

largest employer in the State: State Government? Mr. Biondi replied,this is

considered in the report of the Cost of Public Services Committee.

There was no disagreement in the comments on the homebuilding industry.

The last paragraph on page 8 was considered by the Commission.

Mr. Cooperson remarked that the report mentions the loss of old businesses

and industries and the need for new companies but what about the expansion

of present businesses? The Committee must have implied that, assuming a growth

in the existing businessesi there is a constant turn over of industry and yet.

,within the strength of Delaware's existing industry, Delaware must look to

new industries to provide employment.. Mr. Walton noted that the Land Use.

Committee discussed the matter extensively and agreed that the one way to

satisfactorily achieve State growth is.to let existing industries expand.

From a community,development standpoint, it is the most satisfactory way

of helping Delaware. This, of course, may be,contrary to the automotive

industry but expansion of other industries that are here*no,w'should be our

overall development goal plan for the next twenty years. The idea of going

out and solicit.new businesses is not as economically sound.

The matter was left open by the Chairman.

II. RECOMMENDATIONS:

1. There were different views on the urgency and importance of saving

the railroad service in the State. Mr. Conaway stressed that the railroad

service is of primary importance and vitality to the survival of Sussex County.

If Sussex County does not have its railroad service, its, economy is finished..

This was demonstrated during the period of time when the,bridge over the Chesapeake &

Delaware Canal was out of order last year.,.Mr..Biondi suggested the wording

be changed to read: "I. Anurgent and important ma. Itter.is All Com-.

mission members present agreed.

.2. Mr. Biondi asked if it would be sensible to impose on the Division.of

Economic Development the responsibility to carry.the permit applications to the
county and State processes. Mr. Daniello replied that he has found during

his tenure that a potential industrial prospec.t has to deal through so many

state, local, quasi-independent agencies: that it discourages many prospects.,

Mr. Biondi said that the Committee recommended on page 12, Recommendation 5,

"to streamline the regulatory and revi ew processes of the State Would

it be feasible to go even further.and to have one person in the Division of

Economic Development responsible for handling the applications?
Mr. Bryson replied that no one from the, Department of Community Affairs

can carry out an application from a given industry into any agency and answer

the necessary questions. The Department of Communilty Affairs could introduce

the prospective client to the different agencies.and coordinate the application

---but the Department of Natural Resources has.to use its experts to see what

an industry is going to produce.

Mr. Daniello went on saying that he does not agree with Mr.,Bryson. There

ought to be one single lead agency in Delaware where prospective industries

would go to get answers as to, at least, what applications and what questions

will be required of them in order to proceed with either building, or carrying

on a business. The Department of Community Affairs has started to do a lot of

informal talking in terms of coordination but it,is not enough.

Mr. Krapf was very eloquent in showing the,need for Delaware to-do away

with much of the red tape and bureaLcratic regulatory agencies4 He mentioned

Virginia for instance, which has one person.to help the client go through the

permit requirement process. He suggested that Recommendation 5.be much stronger

in its wording, but he added, 'at least someone (the Secretary.of the Department of

Community Affairs) is listening and sympathizing; al.thoug.h some of theDepartment's

approaches are wrong (such as advertising in a magazine for new industry to

come.to Delawa re).

.Mr. Biondi asked Mr. Daniell'o what suggestionswould he make that his.

Department could or should do to imprcve the language in Recommendations 2 and 5?

Mr. Daniello suggested that some suggestion be added to have the Governor

assign a lead agency or a spec.ific group of people from different agencies

that would serve as the liaison for any company prospect. Mrs. Siebel ask ed:

"But isn't this the responsibility of the Division ofEconomic Development
right now?" "Yes," Mr. Daniello replied, but hel does not have the power or

the authority-to tell the Division of Revenue (for instance) that when that agency

has made a response to Toyota in Tokyo that that response should have been

checked out with other State agencies involved in the answers that Division

gave.. He does not have the authority to tell the Planning Office that the

response given to a letter dated 1969 concerning the Degussa Company was too

late. He does not have the responsibility for any other but his own agency.

It was the general consensus of the Commission that there were entire7y too

many levels of government in Delaware.

Mr. Krapf further commented that Delaware will not grow if the permi t

application hierarchy is allowed to remain as is. All the different agencies

should get together to simplify the system. This should be done through the

Department of Community Affairs.

It was finally agreed that the language of Recommendation 2 is not strong

enough as to the role that should be given to the Department of Community Affairs

(through its Division of Economic Development) in terms of receiving the lead

as the coordinative agency to provide the necessary mechanism to all industria.1

concerns (already in Delaware and wanting to come to Delaware) to grow in the
@State.

3. Mrs. Smith,(representing the League of Women Voters for Delaware) asked

the meaning of the term "speculative industrial buildings", on page 10.

Mr. Daniello replied that in order to guide the growth of industry into

particular parts of a state, many states set-aside land and build a facility

before having the actual clients to occupy the facility.- Delaware does not

have this. Delaware has financial incentive programs that have been geared

toward manufacturing facilities and toward financial loans for the owner
after he is on site. The State would underwrite the financing through the

bond act but it would be the private developers who would construct the facilities.

4. After a short discussion, a general agreement to strike the word

Ilentirely" in 4a., and a motion duly made and seconded, the Commission

unanimously adopted all of recommendation 4.

5. Already discussed within recommendation 3. There were generally

two thoughts. One, that expressed the feeling that because the law has established

a set of rules, nothing can be done to change the process, and the.State should

live with it; the second feeling was that the law should be changed.

Mr. Oldach commented that the Commission should express the needs that

exist; the objective ought to be the cha,nges; and the mechanism to. accomplish

these changes can be developed later. Mr. Russell remarked that this is the

very co ncern of New Castle County regarding the Delaware Tomorrow Commission.

The values of all are the same; the economic development is just as important

as the enviro nmental protection aspects, but how is this going to be done anu

by whom is New Castle County's.great concern.

After a motion duly made and seconded, the Commission adopted Recommendation 5,

as written.

6. Mr. Russell expressed his concern in regards to-the contents of

Recommendation 2, concerning the economic development of the State against,

supporting the efforts of the DAC, which is a regional body whosedirection

may not always be advantageous to Delaware. It was felt.that DAC was not

instrumental in Sussex and Kent Counties obtaining EDA funds. In fact

Mr. Bryson said: "When it came to Kent and Sussex (Counties) getting EDA

funds, we got it in spite of Delmarva (Advisory Council).".

Everyone agreed to keep Recommendation 6 in the report,

7. There were some questions as to what taxes were referred to in this

section. The word "adopt" was felt to be too strong and the consequences of

adoption of a formula far too reaching. It was suggested by Mr. Bradford that

it might be wise for the Commission to recommend a review of the State property

and income tax base as a whole, at all levels of governments. It was the

consensus to strike the word "adopt" and replace it by "study". After a motion

duly made and seconded, the Commission adopted Recommendation 7, as changed.,

8. The League of Women Voters suggested in a 1 etter from Mrs. Marcie Bierlein

that the paragraph in the middle of page 13, third sentence be changed to read

as follows: "The highest priority for the State Planning Office under the Coastal

Zone Management Program should be research to predict and to actively promote
and direct development Quoted, in part, from Mrs. Bi erl ei n's 1 etter:. ."The word

'monitor' bothers me since it implies passively watching and noting what we

see happening. I would hope the State Planning Office, in coordinatton,with

the affected counties would have adequate controls at their disposal to actively

promote and direct development to those areas where it will do the least harm

and will produce the least ulcerous impact to the State and the local areas,

thus, I would prefer the sentence read: "The highest priority for the State

Planning.Office under the Coastal Zone Management Program should be research to
predict and eventually direct the landside development that occurs as a result,

of offshore drilling for oil and.gas and/or of a deepwater port."

,It was the feeling of the Commission members that the Planning Office

should not be designated as the agency to control the developmentsince it

is charged with the task of managing a program which is directed to limit and control

the development of the coast. The more adequate wording should be to

research; to predict and then charge an agency to monitor based on the

Commission's conclusions. The planning function should not be given the control.

It was noted, however, that., as a rule, the planning agency does not control but

merely restrain. There has to be some.planning done if offshore drilling is to

come to Delaware. No one wants uncontrolled and unrestrained development..

Mr. Webb remarked that because of the numerous federal agencies involved in the

w state agencies that
offshore oil and gas drilling matter, -there may be a fe w ill
handle the onshore development impact aspect or the federal government may
designate the Planning Office as the sole agency responsibie to Washington for

the State of Delaware.

Mr. Biondi asked-whether there was a necessity to say that.the highest

priority of the.State Pla nning Office is to research, etc. The general consensus

was that the sentence read: "The highest priority for the State should be

research to predict and eventually direct the landside

Mr. Krapf said that the State of Virginia., for instance, is rapidly gearing:

up to the idea of offshore oil drilling. Large tracts of land are being bought

(one of them by one of the largest oil drilling rig firms) to prepare.for the

onshore development. However, Delaware is still "researching and studying".

Mr. Walton remarked that anyone can buy land in Delaware, but the actual use

the the land is controlled by the' local planning commissions. The Commission

is talking about making 'a State policy, but the controls are at the local levels.

Mr. Biondi mentioned that the way Delaware's tax structure is presently set,

up all the tax benefits would go to the local governments and the majority of

the costs for services would go to the State government - the State would not

get any of the revenues. The State could have a net loss position econo-

mically with that.kind of development in the State. It was noted that
Louisiana has a net loss of'$59 milli .on a year. Mr. Oldach said that Delaware

does not have much to offer in terms of economic development, its main asset

is its geographic location and the State should capitalize,on this.

Mr. Daniello asked if offshore drilling was done in the Baltimore Canyon

could the oil be brought into Delaware with the Coastal Zone Act in its present

form? Mr. Keifer replied: "Yes, no question about it."

Mr. Wiener s aid that the way the paragraph is worded,(as amended), on page

13, is meant in no way to support or to strengthen the State Coastal Zone Act.

The Coastal Zone Act in its present form would allow Delaware to bring in oil

from the ocean. All this paragraph means is that Delaware has to study and

research and eventually direct the landside impact so as to obtain orderly

development. There are benefits that would result from oil drilling; there

are problems; and the State's obligation is to come up with an answer.

The Chairman asked for a vote. The Commission unanimously adopted

Resommendation 8, as amended.

Mr. Biondi suggested to schedule a meeting of the Commission to hear the

addendum report of the three members of the Economic Development Committee who

have a different view from that of the Committee's on the matters of the Coastal

Zone Act and the State tax structure (Recommendations 15 and 16). Recommendations.

9 through 14 would then.be considered by the Commission. Mr. Krapf sugges:ted

that his Committee (the Economic Development) meet to examine the two issues

mentioned above so as to iron out any differences. It was decided that
the Commission will meet on June 4, 1975, at 7:00 p.m., at.Buena Vistak.

Mr. Keifer was asked.to send a copy of theaddendum report of the

Land Use Committee to, everyone, plus one copy ofthe full report to
Mr. Krapf who lost his ...

Chairman Biondi adjourned the meeting.

Respectfully submitted.,,

Francine Booth
Recording Secretary

*NOTE: This meeting was subsequently changed to.8:00.p.m.. in the Community
Genter, of the Wi1ton, Deve-l
o@pment (on@ the n6rth' sAde@ of U.S,.. 40' approximately
one mile southwest of the i,,ntersection of U.S..40and U.S. 13). The date of
June 4 remained the same.

DELAWARE TOMORROW COMMISSION

Minutes.of Meeting of June 4, 1975

A meeting of the Delaware Tomorrow Commission was held on June 4, 1975,

at 8:00 p.m. in the Community Center of the Wilton De velopment.

The following members were present:

Mr. 0. Francis Biondi
Mr. David R. Keifer
Mr. James H. Gilliam, Jr.
Mr. Ernest W. Thorn
Mr. Peter A. Larson
Mr. Carl S. Oldach
Mr. Jay N. Cooperson
'Mr. Leon M4 Weiner
Mr. Clifford B. Hearn
Secretary John C. Bryson
Mr. Theodore Ryan
Ms. Joann D. Slights
Mr. Albert Adams, Jr.
Ms. Dorothy Greer
Mr. John F. Walton
Secretary Cli.fford E. Hall
Mr. Henry Folsom
Mr. Joseph Golden
Secretary J. Thomas Schranck
Senator Robert J. Berndt
Mr. Carl Russell

Also Attending:

Mr. E. Sherman Webb
Ms. Rita Smith (attending for Ms. Marcie Bierlein)
Ms. Peg McClane
Mr. John Morton
Mr. William Bradford
Mr. Arthur Krieger
Dr. William Markell
Mr. David Singleton
Mr. Dan Kuennen
Ms. Jane B. Aughey
Mr. Richard M. Bauer
Mr. Edward J. O'Donnell
Mr. Steve Chamberlin
Mr. David Markell
Mr. Bernard Dworsky
Dr. William B. Latham
Ms Michele Kudish
Mr: James Gutman

Chairman Biondi called the-meeting to order at 8:25 p.m. As an update

on where the Commission stands In reviewing the Committee reports, Chairman

Biondi stated that at the end of the last Commission meeting the group had

discussed the first eight recommendations of the Economic Development

Committee Report. They also acknowl edged the fact that there were two issues,

the State Coastal Zone Act and the State tax structure that should be further

discussed by the Economic Development Committee. The Commission members agreed

not to discuss these two items until the Economic Development Committee had

met to discuss them. This Committee met on Monday., June.2. Mr. Spencer

Thompson, the Chairman of that Committee, notified Mr.. Biondi that there would

not be a further report of that Committee presented to,the Commission to.be

discussed at today's meeting.- due-to the fact that several interested Committee

me
members could not attend Monday's meeting. Another- 'eting of this Committee

will be scheduled.

The Commission members agreed to defer action on issues 9-14 of the Economic

Development Committee Report until that Committee meets and decides what other

amendments or modifications they.are goi.ng to make to theirreport..

It was moved seconded.that the Commission move on to the report of the

Land Use and Community Development Committee.

The Land Use and Community Development Report contains a prelimin ary sec@-ion,

pages 1-3,. which is merely an introduction.and general findings of the Committee.

Mr. Biondi suggested that the Commission start discussions on page 4 discuss.ing

the findings first and then the policies as these are specific breakdowns of

the general findings on pages 1-3.

Mr. Weiner raised several questions about the general findings on page 2,

which he believes are not dealt with elsewhere in the report., He stated that in

Paragraph 3 under General Findings the use of the words ',future quality of life"

and "Strict environmental and design standardsit and "high quality standards".

he feels that the language is too general. He suggested that it be clarified so

that when you talk about the "future quality of life" you mean the total environ-

ment; the physical, social, and economic and not strict environmental standards

only. He emphasized that the term quality of life may have d,ifferent,meanings

to different people. He feels that the term is used too loosely could be very

easily misunderstood.

He suggested that Paragraph 3 should read:*

"The Committee agrees.that Delaware's strategy should emphasize the
future quality of life for,the total environment, the physical, social
and economic aspects as well.

and "also by insistence upon desirable environmental and design
standards for new development."

Mr. Biondi asked what are the Implications that Mr. Weiner sees in the

paragraph as written. Mr. Weiner answered, "that poor people aren?t a nice

quality of life." - What wetre talking about Is a quality of life that takes

into account the fact that our total living environment is physical, social and

economic.

Mr. Larson had no strong objections to Mr. Welnerls proposed changes.

Mr. Walton stated that his thinking,on the reasoningfor the wording was that

this Committee was only dealing with Land Use and Community Development issues

not the total picture. He feels that the terms Mr. Weiner Is talking about

should be, in the Commission report. Mr. Biondi agreed and stated that that's

the purpose of these meetings --to make any amendments forthe final report.

Mr. Larson felt that Mr. Weiner read something into the report that didn't

exist. Mr. Walton felt that the basic Interpretation of the Land Use and

Community Development Committee is thatthe economl-c status of the peoplein the.

State has something to do with their quality of living but ft.'s not relevant to

the quality of living which they achieve when they live in Delaware certain

poor people In this State have a better quality of living than certain rich

people in this.State. Mr.-Biondi stated that the,problem is that we're dealing..

with Images of what the quality of life should be.

Mr. Russell stated that, as a member of the Land Use and Community Develop-

ment Committee, he interpreted the title of the Committee-Community Development,

to mean the same definition that the Federal Governmentuses, which Is physical,

social, economic and environmental.

Mr. Weiner and Mr.Larson both agreed to change the word "strict" to

"desirable," so as to read "...and also by Insistence upon desirable environmental

and design standards for new development".. It was also agreed to delete the,

..word "high-" In. Paragraph 3 -to read, ".The Committee also agrees that with quality.

standards...

Community Development Patterns

The Commission then proceeded to page 4.

,Mr. Biondi clarified that the word 'findings' used In this report means a

kind of broad conclusion with respect to a problem based upon the overall

knowledge, common sense, observations and experience, etc. of the people Involved

In this report.,

Community Pattern Findings

Mr. Folsom questioned the first finding established urban settlements

with their existlng..." -Is there more than one with any support facilities

In.the excess of their needs other than the City of Wilmington?

Mr. Larson stated the term "settlements" refers to all. the towns In Delaware

that have basic Intrastructure no one 'community was singled out. Mr. Folsom
asked if there Is more than one "settlement" that has a -more than adequate

structure and how many.of them are less than adequate? Thts question raised

another issue: Are you assuming in thisreport that, If a structure Is Inadequate

for further growth, It is cheaper to enlarge that.structure and add,to it than

to start anew. This question Is dealt with later In the report.

Mr. Weiner felt like the word "findings" really means observations. Then,

as a point of Information, in Paragraph 3 under findings "Factors other

than those of local concern and the desires of Indiv.idual property owners must

be brought into the planning process ... then the "must" is.not.an Imperative but

is part of an observation of the way it ought to work or, is working. He asked

for clarl.fication.

Mr.-Larson stated that the term "must" indicates that you want some.change

It Isn't working. It Is astatement of a condition thatis not-existing at the

present time,that ought to exist.,

Mr. Gilliam suggested that, In light of the way we've been operating and,

in terms of what's most important In this report,.It might be a good idea to

refer to the policies instead of getting very involved in findings. Mr. Biondi

agreed and stated that, proceeding In that fashion, if anyone wants to question

one of the findings.in relation to a policy point,- please speak up.

Community Patterns Policies

Dr. Markell stated that on some of these policies, the Committee should

expand on how they cameup with their decision.

The term "sprawl" could mean Newark shouldn't expand or you don't start.

a new community. We should have the benefit of how the Committee arri ved at

these conclusions.

Mr. Biondi felt that no one policy makes sense alone. .It should be

in the context of all four of the.policies they really have to be'read as one

ake the first.three policies together, what they don't want
policy. If you t

to happen.concerning sprawl is pretty clear.

Mr.-Russell asked Mr. Larson-to-def,ine urban center and.how far that.de-

finition is taken, For example, would Brandywine Hundred be considered an urban

center?

Mr. Larson said that when you talk about anurban center you're'talking

about towns essentially although there are uninco .rpqrated areas., for Instance,

In New Castle County, that would be defined as an urban center. The Committee

didn't get Into that in great detall.- they were talking about towns towns that

had a fire station, a cluster of buildings, afeed store and the kinds of

things that draw people In.

'Mr. Weiner stated that he heartily supported policy number three because

it states that urban centers whether it's a big urban center Like Wilmington

or just a small conglomeration in a rural or quasl7rural area are places

where quality of life that are physical, social and economic have bound people

together. We ought to utilize those qualities and revitalize them to make

maximum use of what exists.

Mr. Folsom asked for clarification of the word "urban". If youtre talking

about urban meani ng. municipalities or incorporated areas, then. in policy number
two, the on,ly place in New Castle County that could use that. policy is Wilmington.

He questioned whether ltl.s even needed.there. Ifthe word "urban" does indeed

mean municipalities, then the policies are not practical. in New Castle County.

Mr. Cooperson felt that the critical pointis,the matter.of.physical

facilities wh-ich are in place - orcould easily be put in place asthe basic

matrix for some concentration, of population. The Committee felt that, not only.

in terms of physical form, but in terms of energy demand, we can no longerafford,

as a society, to go on dispersing population or leap-frogging developments as

we have in the past and expect that we can.extend,the physical.facilities to

them Indefinitely.:.This Is no longer a practical solution. The crux of the

matter is:. are the physical facilities there or can they be easily put In or

be tied into physical facilities somewhere else. On that basis there are some

communities. that are not qualified as an, Urban, center. However,, there may be

a population concentration where physical facilities are avallab.le and It is

sound policy to encourage development, either through i,mprovement,of transpor-

tation systemsP of sewers, etc.

Mr. Oldach felt that the Committee needs to give,more thought to how we

define what Is a reasonable concentration..and technique for future growth to

balance,the values of open space versus,residential areas and communities.

Mr. Biondi tried to define what areas the Committee had in mind with the

concept of urban centers.

Mr. Thorn stated that the Committee felt the need to emphasize, along

with a desirability to preserve open space the need for a more efficient use

of energy. The Commission has to decide whether we want to-encourage cluster
IN
and discourage sprawl..

Mr. F olsom suggested that policy number two be changed to read, "New

community development generally should occ.ur.within or near existing population

Co"ncentIrations whereutility networks and community facilities and services are

already In place or can economically be,expjanded.

.Dr. Latham noted thatthe Committee's report suggests that, wherever

growth takes place, that those who are to,benefit from the growth should,bear

the full cost of it. He felt that-the Commission should embrace this idea.

He suggested a user charge for people to bea r the fullo-cost of growth. Mr. Biondi

noted that Dr. LathamJs talking about number one a po,licy.and numbertwo

a penal ty for refusing to follow that.pol I cyl,

Dr. Latham explained that If everybody has to share the 'fulJ cost of the

facillfles for growth then the least cost was to take advantage of existing

faci-lities. However, if there is a group of people who are-wil,li-ng to pay-the

cost of a new development far from anything else, does this Commission want

to go on record as wanting to not allow them the choice of bearing the full

cost of.their growth to have a new development In a new area? Mr. Biondi said

that what the Commission wants to do Is express a.sense that the-public policy

ought be not to encourage it. Dr. Latham explained that pay-Ing full cost.takes

care.of that without trying to direct peop.le's choices.

It,was moved by Mr. Thorn and seconded by Mr. Weiner that the first three

policies be supported. as amended..

On policy number four, Mr. Gilliam noted that It should be clarified exactly

what Is meant by "code" - just what Is being advocated here.

It was agreed that policy number four should be deferred to be discussed

along with the addendum and the report of the Econom ic Development-Committee.

ed that for the purpose of future discussion, when a conomic
Mr. Biondi stat n E

Development Committee Report and AddendUMrto the Land Use and.Community Development

Reports are discussed, we should clarify what we are talking about when we say

land development standards in this context.

Mr.. Larson answered that the Committee wasconcerned with how you went

about controlling land development hot concerned much about where.or how much.

Mr. Bryson suggested that "guidelines" shou.1d.be substituted for "standards"..

Transportation Policies

Secretary Bryson suggested that In policy number two the word "need" be

changed to "availability".

Mr. Weiner stated that In policy number one the statement "not cars"

implies that you don't want anymore highways. He felt that todeclare a

7 9

vendetta,on automobiles or on highways Is unrealistic. It is a matter of

saying that we Want our emphasis to go In the area of mass transit.

Mr. Larsoniclarified that the,phrase "not cars" is not meant to imply that

you shouldn't build anymorehighways - it means that, If the best alternative is

to. move people and goods in mass transit other than cars, then thatts the way

it should be done.

Mr. Chamberlin explained that these policies are a.two-sided Issue. If a

development is located c.lose to an urban center where therets regular bus

transportation In the terms of the designof that developmentand its,.approval

througha planning process that can reduce the public and.private.investment

necessary to produce a given number of houses by adopting these policies.

Mr. Kreiger felt that before a policy of this type.is decided on, they

should have some Indication of.how this con.clusion-was reached;,for example,..

what would be the cost.

Mr. Thorn directed Mr. Kreiger to policy number four.as the answer the

Committee had to try to avoid getting into a.sc.heme which might end up wasting

money.

Mr. Webb noted that another problem Is that, for examp,la, a study is being

undertaken by Highways and Transportation of.mass transit needs in. Kent County

which will' probably result in a demand responsive system because of the low

concentration of people as opposed to a fixed route system'. There is.a.

differential in terms of the.area to be.served, the type of equipment or type of

service provided.

Mr. Gooperson felt that it was.important to think in terms of a balanced

transportation system in lower Delaware as well as New Castle County. The

Commission should decide whether the emphasis is going to be entire,ly on highways

for moving goods or whether they will put emphasis on seeing that the railli.nes

are revitalized so that we are not totally dependent on highways.

Mrs. Smith (representing'Mrs. Bierlein) asked whether policy three "in

urban and.resort areas" should be inserted - or whether.the--intent of-.the

Committee is to promote mass transit Statewide. It was agreed that this was

needed Statewide.

Mr. Biondi asked If a developed mass transportation system in.terms of a

bus system in New Castle County was feasible or does it run contrary to human

nature.

.Mr. Larson stated that there was,a pretty fair mass, transportation.system

operating.in New Castl-6 County now, however it could be Improved if there were,

more.volunteer rider sh I p.

Mr. Biondi stated that we may need to insure-Juture, public funding of-the

mass transit system on a long term basis. Mr. Weiner, noted that In 1957, during.

the planning stages of many of our highways, many peopleralsed the question of

using the freeways as a 'system for mass transportation w4th.loops that would

run-in high speed.lines Statewide and there.ought to be parking and riding

faciliti-es at every Interchange and additional land shoul-d'be acquired. There

was no governmental po.licy to'support that. Mr. Weiner.expressed-his.support

of policy number one as long as the words "not cars" doesn't give the impression

of being anti-highway.

It was agreed to change po,licy number I to read:,

"Transportation policies should be primari[y concerned with the,
movement of people and goods, not just W11h.the movement of,cars.11

Mr. Bradford notedthat in policy number one, the movement of goods Is men-

tioned but it's not mentioned in any policy thereafter - there Is more concern

with the movement of people.-.-This report should address the rail problem.

Mr. Walton said that the improvement of existing roads was one ofthe

desirable features of this Committee, however he agreed that the railroads

should be improved to facilitate the movement of goods.

Mr. Folsom noted that in policy number 2 an economic balance should be

achieved in the best way to transport people and goods. He questioned whether

the Committee realized themeaning of,the statement "increases the resources

available for mass transportation". T he operating subsidy for DART has Increased

500% in the last four years. In addition, Federal funds have been received.

Is the Committee saying that over and above w,hat they are spending in govern-

ment funds nowj that we recommend that that be Increased?

Mr. Biondi clarified that the Committee Is saying that a.larger portion

of transportation dollars should be spent on mass transportaflon than Is

.currently spent.
Mr. Singleton felt that the Committee should think of positive incentives

to encourage the most efficient forms of transportation for people or goods.

For example; parki ng and riding facilities, subsidization of mass transit,
etc, Mr. Cooperson noted that, like itIor notwe are going to have to turn to

other forms of transportation - because within a few years, we're not going

to be able to afford to do It the way we are now.

Mr. Chamberlin expanded on Mr. Folsom's statement of the economic

balance by saying that you have to look at total dollars and not just,the costs

the County Council would have to vote on in'terms of their Capital Budget.

Mr. Bryson suggested that In,policy number two the words "need,f6r" be

changed to "availability of" and that some approach be taken to.reduce the

availability of parking facilities to help promote mass transit.

Mrs. Slights pointed.out tha t the words "need for" provide the pos.iti-ve

point of view and "avallabili.ty of" express the negative point of view.. One

supposes that you are going to provide enough mass transit that the need for

the automobile is no longer going to be necessary and, therefore, you will not

need to have the availability of'the facility. She proposed an amendment that

'both statements be Included in policy number two to read: .11-reduces-the need

for an'd.therefore the avallabllity@of automobile facilities In urban and

resort areas".

A motion was made and seconded to accept policy number two as amended by

Mrs. Slights.

Mr. Singleton proposed, on policy number three, to change the word-ing to read

"to promote all use of mass transportation through the greater development of

positive Incentives and to educate.0'.1t..

Mr. Russell noted that the need for Incentives In Now Castle County Is as.

great outside,the City 9f Wil.mUngton as it I,s.inside the City. Mr. Singleton

said that his recommendation wasn't I-ntended-to apply only to the City.

It was moved and seconded that pollcy.number three be approved as amended.

It will read: "Delaware shou-Id develop programs to promote greater use of mass

transportation.thro.ugh the development of Incentive programs and to educate.

citizens on the need for increased use of transit.

It was moved and seconded that policy number four be accepted as written.

Mrs. Smith questioned In polAcy number four on page 6, you ta,lklabout

utilizing existing technology and in B.1 on page 7 you talk about fiscal com-

mitments for exploration and developments ofnew systems. She asked if the,

Committee wantedto clarify how much emphasis.to put on each of these policies.

Mr. Larson said this was an Inconsistency. B.1 will be modified to con-

form with number four on page 6.

Mr..Larson went on to say that the Committee feels that we shouldn't,

at th.is t.ime,.venture Into a lot of esoteric.personalized transportation systems.

We should put our Federal money where we know thesystem will work and that1s

in buses that Is what we tried to say in number four.

Mr. Russell expressed his feeling that the policy statements ought to.have

some sort of explanation in the final report. Mr. Biondi ex plained that the

revision of the preliminary draft will.be constructed out of the minutes of

the meetings and the changes made all along.

Uti'lity Findings.

Mrs. Smith read a letter written by Mrs. Bierlein which stated that

flutility finds 2 and 3 seem to be In conflict. What Is wrong with constructing

interceptor lines with excess capacity,in areas where development is being

encouraged. Perhaps the Committee Is s.imply giving a caveat In number three
that great care shoul/d be exercised ln.pla'cement of sewers, since they are

such a powerful Incentive In development. Certainly.no excess capacity should

be built Into lines In areas where future development. Isto be discouraged. On

the other hand, since sewers require such a massive public Investment, it would

seem to be prudent for local governments to build In appropriate excess capacity,

in those areas where they want to encourage growth,".

Mr. Weiner stated that there may be someplace In this country, State, or

county where there Is a current practice that results in the construction of

interceptor lines sized wl.th.excess capacity and designed.to.serve the ultimate.

He's never run across one, however he believes that this runs contrary.to the
other policies that call for avoiding "sprawl". The definition of "sprawl".-

used on a. previous policy that said we should discourage It:- is unreasonable

and inefficient use of community.facilities. This finding (number three) says

that you shouldntt design them to serve the ultimatehighest density population

anticipated.. This is very confusing. He agrees with number.two. Mr. Weiner

felt that one of the problems is that "we respond to sewer lines and other
J
utilities only when there is a demand and we are In a,crisis. Number three

e and two logically and needs to be revised. Number four is
doesn't follow on

correct in that It creates a self-fulfilling situation but is a valuable tool

for.,guiding,,Ia.nd use an,d,therefore should,be I-ooked at as..a good th i.ng. -, From-

that point of view, If we're going to get a utility policy, we have to get our

findings consistent with what it Is we're trying to do.

Mr. Biondi gave his Interpretation of the findings as. follows:

Itif you have point A and point B and they are, say, ten miles,apart, the

thrust of this.finding was that we shouldn't build a sewer to,se rvepoint B

if there's nothing happening between A and B because youtll be.forcing develop-

ment between A and B. You'ought to try to force development closer to point A

which assumes some logical extension of your line."

Mr. Weiner stated that i-f that's the thrust, then the words'llexcess

It
capacity" are wrong - what you're saying is "over extension If you say excess

capacity, youlre talking about the sizing of the pipes to handle as high and

clustered a density as you can which Is w hat we-ld like to see so it doesn't

get sprawled all.over.

Mr. Bryson said that excess capacity Is required by law. Extension is a

better use..

Mr. Wa,lton explained that when the Committee discussed these polic les, scme-

one from the Planner's Office said that the cons.ideration of the planners,in

Sussex County was for 84 inch sewer mains down in the Bethany Beach@area. This

Is excess capacity. What happens is that from the time the planner puts this on

paper to the time the elected officials put out the money, the 84 inches gets shrunk,

to 24 inches.

Mr. Russell stated that possibly the reasonjor people moving in this

direction reflects on recent activity.in the past two years and present activity

in New Castle.County and some of the interceptor activities toward Glasgow and

Newark., These activities all relate to already committed on line, rezoned

activities - major rezoning activities which were.a legal. commitment that

New Castle County had made.. These were not excess capacities.

Mr. Biondi asked Mr. Russell If he was saying that when the.County rezones

a property, it makes.a legal commitment to provide the utilities.

Mr. Russell said that was not what he.was saying., He clarified that there

is a reasonableanticipation of population growth to use those utilities within

a short planning span, This was a legal commitment the county had made.

Mr. Bryson clarified that the reason for excess capacity.was extension.

ExcessIcapacity in a line means you plan to have a sewer line and.a sewer system

that will serve an anticipated growth for a number,of,years. You canit build a.

line today that doesn't have any excess cap,acity and still keep any reason to

your construction periods, If you do,'It w ill cost:you double orthree times

as much to come back next year or the following year to correct the situation

you've made a mistake on, as it will be to put some capacity there. Over,

extension building a line in the area.where you have no reasonable expec.tati on

of growth simply to create that growth is.bad. The excess capacity is required

to avoid superfluous construction costs later on.

Mr. Biondi asked if using the definition of over extenslon.and looking at

the problem in those terms, is there a current practice.of.over extension anywhere.

Mr. Bryson said that there was in Sussex County. For example, they put lines in

where they had no anticipation of growth on the streets It was done at the

t.ime the town said we'.11 have growth there someday. When you're trying to promote

@growth by putting,a sewer there that's over extension.

Mr. Biondi suggested that numberthree be changed to reflect overextension,

asa problem rather than excess capacity.

Mr. Weiner noted that again apparently finding number four is directed to

that specific,condition of encouraging growth in towns where there are over

extensions.

Mr. Bryson suggested changing the phrase "construction of excess sewer

capacity",to "over.extension of sewer systems' in finding number fou.r.,r 7

Mr. Weiner asked if it isn't a constitutional,right of the people in a

community to want.a.population increase. -Mr. Bryson'said that they have the

right to want it, but the State also has the right and the obligation under a

Federal planning concept to do a State Plan which has to be approved and their

concept.of growth has to jive with what we.feel to. be a logical growth factor

and.not one of high anticipation. This,goes both ways.

Utility Policy

Mr. Wa I tor n noted that Mr. Conaway abstained from voting on this Issue

-@because Sussex County I:s us I ng ut-1, 1: l-tTes to@ foster growth. -
Mr. Weiner said he had no objection to theutility poiicy except that he

was not sure what the word "premature" meant In this policy. If we understand

that premature means not timely in terms of the growth patterns that are

existing then he could accept It.

Mr. Cooperson pointed out that he didn't think this policy need5rt he word

11premature". He also felt that the word "necessary" is not necessarily the

best word. He suggested that that phrase be changed to "....which encourage

development in areas not otherwise desirab.le for urban uses". My understanding

,of the Committee's position was that we were talking about a correlation between

that growth of sewer facilities-with support that may be desirable or not de-

sirable from all of the other,factors that should be taken into.account in:the:

planning process.

Mr. Walton pointed out that the objection the Committeetried to raise in

this policy was unwise use of tax money. The F ederal Government had no business

giving the towns money unless the towns know what they were going to do with it..

Mr. Biondi noted that Mr. Luce had not voted on this policy. He asked

Mr. Russell and Mr. Bauer what objections they had to this pol.icy. They said

they had no objections to the policy with the changes. made striking "premature".

This policy was accepted as amended.

Implementation

Section-A-1 under tax measures was approved as written with no objections.

Mr. Weiner made a motion that Section A-2 be stricken. The motion was

seconded by Mr. Blond.i. Mr. Weiner agreed to leave: "Tax incentives to property

owners to keep land in open or non-urban uses",as is and strike the rest. He

felt that this policy discourages comprehensive plans and encourages the one by.

one zoning and planning decisions that the Committe.e.found in their Community

Patterns Findings was not good planning.

Mr. Biondi asked about the argument that this would, in fact, force land

into premature development?

Mr. Weiner said not if you're going to raise the tax base-everybody's

going to try to keep their land open space,until they're, immediately ready to

use it within the next week or two because theminute you get it rezoned, you're

going to pay premium taxes on it.

Mr. Bradford.said,that his understandi.ng on the "windfall profits tax"

is something done by governmental.action. S,uch as 1-95 or properties immediately

adjacent to 1-95, w-here the land has a.change in va.lue immediately.

Mr. Biondi asked what the time span is from the time you'd plan a develop-

ment, take it through rezoning, to the time that development would be a viable

economic entity? This is about a two year.period.

Mr. Weiner felt that there were questions with A-2 and the public action-

the windfall profit tax. His argument Is that where properties are adjacent

such as to a freeway-or elsewhere - and wIJI grow incrementally, somebody has to

tell how you're going to determine what the profit is that will be made at

some point In time and tax them immediately for It - which Is an impossible

thing to.do. This I-s obviously unfalrand Impossible toadminister.

Mrs. Smith pointed out that the sentence says "tax Incentives.coupled.with

immediate tax obligations". She felt thi.s meant that a piece of property

wouldn't have any tax obl.lgatlons coupled with tax.incentives previously. Mr.

Walton said that assumption was correct. Without confusing the-issue of a roll

back tax public plan, one of the words to be looked at is "rezoning" and,the

questlon-of when the.rezoning.takes place. If governmental action-causes a

utility to go th rough an area, there wou.Id be no additional tax b urden

Immediately until the rezoning were applied for. The idea on this is that all
the open spaces that were held In speculation out he re are on the agricultural

rate, which is the reduced rate, and not bearing the full burden of the

speculative land value as the rezoning took place. When the land has been

rezoned, the owner should be taxed fromthat day on,an.d not left at the

agricultural rate, because from the time of rezoning a profit is anticipated.

Mr. Weiner objected because the person who.will, ultimately p Iay at a higher.rate of

taxes on the land Is going to be the new homeowner, If you're going to tax

it based on the rezoning.

Mr. Walton clarified that this Is true only if you.build in an area in the

eyes of everyone else, considered to be an open space area. This Is a.deterrent

to building in these areas.

Mr. Bryson asked what would happen to an area that the county rezoned,

for example: a farm that, through a zoning change, is reclassified as a residential

zone. This change is not sought by the farmer - it.co.mes thro ugh a change

In county plans,.etc. Does the farmer have to pay the higher tax rate? Mr.

Walton said he would.

Mr. Biondi asked what was meant by the statement "tax incentives to property

owners to keep I.and In open and.non-urban uses". He asked If there wasn't

already a tax Incentive.

Mr. Bradford suggested that the word 11such",be.inserted to.,read "coupled
with immediate tax obligations when such landlis.committedo..".

Mr. Biondi clarified that A-2 Is proposing tax incentives, but does not

spell out the kind of Incentives. He suggested putting a period after the word

rezoning.

On the concept of other public action, Mr. Walton.stated.that he feels that

i-f the government takes th.Is action on the individual, he feels that it's within

their domain. If the taxpay ers of this State tell a landowner that they are

rezoning his property to a different use that it Is currently applied and that

will be the ultimate'use, then the taxpayers should pay for It.

Mr. Biondi further suggested that A-2 be amended to say 11... for use as a

result of the owner seeking rezoning.11

Mr. Russell noted that on page 11 under open 'space, Implementation number

one says basically the.same thing as A-2. Mr. Weiner felt that the wording

In implementation number one should be worked into A-2. He felt that this wals.

clearer.

Mr. Waltonclarifled that the "windfall profits tax" was meant to be only

an example of a tax Incentive. Mr. Weiner felt that Ifthe policy recommendation

is not clear, it ought to be worked on. How are tax incentives going to be

defined?

Mr. Biondi made a motion that A-2 be amended to read: "Tax incentives to

property owners.should be-developed to..keep land in open-or- non-u-rban@uses, coupLed..

with immediate tax obligations when such land iscommitted for use as a result of

the owner seeking rezoning."

This motion was moved and seconded and approved by all.pre sent except

for Mr. Weiner who voted no.,

The next meeting of the Delaware Tomorrow Commission was scheduled foe

June 9, at 4:00 p.m. at the Wilton Community Center. The follow.ing meeting

will be held on Jun e 16, at 4:00.p.m.An the Cabinet Room of the Town-send Building,

in Dover. Sandwiches and refreshments will be served ateach of thesemeetings..

The meeting was adjourned at 11:00-p.m.

Respectfully submitted,

Dee Burkley
Recording Secre tary.

DELAWARE TOMORROW COMMISSION

Minutes of Meeting of June 9, 1975.

A meeting of the Delaware Tomorrow Commission was held on June 9, 1975, a t

4:00 p.m. In the Community Center of the Wilton Development.

The following members were present:

Mr. 0. Francis Biondi.- Chairman
Mr. David R. Keifer
Mr. Peter A. Larson
Mr. John F. Walton
Ms. Joann D. Slights
Mr. Jay N. Cooperson
Mr. Leon N.. Wainer
Mr. Carl S. Oldach.
Ms. Marcie Blerlein
Ms. Dorothy Greer
Ms. Marion 1. Selbel

Also attending:

Mr. E. Shaman Webb
Mr. Dan Kuennen
Mr. Arthur J. Krieger
Dr. William-Markell
Mr. William Bradford
Mr. Carl Russell (voting proxy for Mr. Slawlk).
Mr. Steve Chamberlin
Ms. Rita.Smith
Ms. Peg McClane
Mr. Bernard Dworsky
Ms. Jane B. Aughey
Mr. Edward J. O'Donnell
Mr. John J. Kirwan
Dr. William Latham
Mr. Gerald Doherty

Mr. Biondi called the meeting to order at 4:25 p.m. The Commission is in

the process.of discussing the Land Use and Community Development.Committee report.

He asked if there was any further discussion concerning A-2 under Utility Policy.

Mr. Weiner recording the only no vote on A-2 as amended asked if the

Commission would consider changing the phrase "as a result of rezoning" to

flat the.point at which the plan Is recorded". This means the tax structure

would change once therel,s a recorded plan, on record, which commits it.to.that use.

Otherwise, large scale planning, of any kind, gets penalized unfairly. He

stated that he wanted to cl-arify why he voted no. He agrees with the princigle
that we need tax incentives so that property owners will keep their land in open

space and also to "attack speculators who rezone the land and ride it for its

highest value to milk it because of a.public action." However, the penalty

should not be on the new homeowner. He asked If the Commission would consider

this aspect of this issue and make the changes suggested above or at least spell

out that the Commission is not looking to penalize the phasing of a.development.

He feels the phrasing'of this policy should be fully explained.

Mr. Walton stated that when the zoning request is made, Is actually when

the land is committed to the non-use of agricultural open space.

Mr. Larson suggested, as a compromise language, using the'phrase "....result

of- the:-owner seekUng' to dqve,.Iop

Mr. Bradford felt that a tax incentive program should take into consideration

a logical, carefully designed, phasing In or phasing out program. He further

stated that what we're trying to get away from Is the sudden windfall type of

changeover rather than the kind of thing Mr. Weiner's talking about.

Mr. Larson noted that the other side of thecoln Is that we're trying to

encourage people not to develop by giving them the incentive of lower taxes. The

trade-off to change one's mind 1n.that situation is roll-back. The point at which

you impose that penalty is the crux of Mr. Weiner!s question.

Mr. Cooperson stated that if A-2 is designed as a tool to keep open space

the objective is fine. If the community wants the open space, then they should

be willing to pay the cost for it. Preferential Assessment does not seem to be.

the best tool.

Mr. Walton agreed and said the best tool is tomaintain an environment of

the economics that agriculture can succeed and youtil get the open space free.

When you change the economics and make it more profitable for the farTner to.sell

his land, then he'll sell it.

Mr.Veiner emphasized that his.concern is with the use of the land. Mr.

Walton said that the law which is passed for farmland assessment in Delaware

establishes the criteria for whether or not you received the farmland assessment.

It's In the law who,ts going to qualify and who isn:ft.

Mr. Larson agreed that the language on page 10-and 11 Is more preclse.than

A-2 on.page 7. He explained that there will be,quite a,few redundancies in the

report because several people:wrote it.

Mr. Biondi noted that.no one has any detail with respect to the kinds of

specific tax incentive plans that should be included. He asked if it made

more sense to.adopt the implementation number one on page. 11 and striking.

A-2.. This paragraph Indicates,that there are specific plans involved, however,

none are mentioned.

Mr. Larson noted thatP originally, the Community Development Section was at

the end of this report and was then moved.to the beginni.ng due.to its broader

scope. This -is one of the reasons for the,greater deta.il In A-2.

Mr. Weiner stated that he had no objection to the policy on farmland on page

10 for farmer preference. However, he.felt that shelteri-s as important as food

and should have as strong a policy.

.,Mr. Walton said that he felt the intent ofA-2 is to work against the wind-

fall profits. Mr. Weiner said that if that's the, intent,AtAs not stated very

c lear I y.

Mr. B.iondi said that someone ought to take into account the comments on

..pages 719 10 and 11 and work to.revise the language to get a consistent policy.

Public Investment

Mr. Larson suggested a change in language for B-l.to make it consistent

with Policy Number 4 on page 6, which was adopted at the last meeting,.,to say;

"Greater fiscal commitment to transit, including an explanation of innovative

systems and approaches".

Mrs. Bierlein asked if this statement includes commitment in the area of

operating funds.

Mr. Weiner suggested changing the wording to read "Greaterfiscal commit-

ment, including both capital and operating funds, to transit...

It was agreed that the title of this section.be changed to.Public.Fundin.g..

Mr. Russell pointed out.that in B-2 the phrase "excess.capacities" is used

again. It was decided, at.the last meeting, to change this phrase to "over

extensions". This change was again agreed to.

Mr. Russell also asked the Committee for an explanation of the phrase

11excossively long proJect des.ign-life". Mr. Weiner said thatthis means they. Ive
be�un-+-o'des,igrf sewer l4nes and-other uti'lit-ie's to last.for the next.17 centuries,

the standards are so high and expensive that they are beyond a reasonable economic
Y
design standard to achieve. Mr. Russell agreed that this phra se means standards,

of design,,rather than project design life. He asked If this means thatthe

period of time which whoever Is putting this in Is spending inordinate amounts

of time to put the whole project down and get it into the ground?

Mr. Larson noted that David Hugg, of the State Planning Office, had written

@this part of.the report. He interpreted this section tomean that you dontt want

to build something that may be obsolete if technology improves your,@means of

disposing of sewerage, for example.

It was agreed to delete the word "design" In B-2.

Mr. Biondi asked what policy B-3 is Intended to do. Mr. Cooperson answered

that component had to do with sewer systems in southern Delaware,wh6reby connections

to major sewer systems In rural areas were being done directly and enco uraging

reas where it would be otherwise unwise,
scattered developm ent in a

..Mr..Walton clarified that the Committee, In policy B-3, is saying that,,If

you make a commitment in.the design of a project to control access to preserve

an area -.that you don't break the commitment.

Mrs. Slights noted that the idea.was that when there is an Interceptor pipe,

the main transporting pipe that goes down a road like-U.S. 13, if a development

comes between one major municipality and another, on this line, that development

.can't come In and tie Into this main line. .It must, in fact, go back to one of

the municipal lines.and tie, through that system,,to the mainline.

Mr. Larson.stated that this Implementation tool. was.designed to rel.nforce

the general community development policies, whic.h;the Commission has generally

accepted, that Is: we don't want scattered sprawl development along the highway.

If you can prevent development from tapping into the sewer lines.and guide develop-

ment to go to th,e.communities that helps re-enforcethe land development policies.

Mr. Weiner suggested that the word "strict" be taken out of B-3. He feels

the word "strict" implies a strength and a,rigidity that i,s going to be impossible.

Mr. Larson said he had no objections to this and further felt that "adherence"

could be deleted also -,so as to read "This Implies development and implementation

of a hierarchial system of highways and utilities".

Mr. Russell ind-icated that the word "hierarchy", which the Committee intended..

to use In terms of.systems., ought to also imply.commitment to capital planning

and capital budgets and the maintaining of those capital plans or budgets.

Mr. Larson felt It Is theresponsibility of the'countles and the State to

adopt that hierarchy as part of their Capital funding program. They know what

they need. inthe way of facilities to enforce.their plans. That Is where.the.

hierarchy is created in the process of planning and financing these public

facilities,

Mr, Weiner expressed concern over the references to Capital funds. There

are interceptor lines that have been built private.1y. He asked if by the

implication of the Capital funds, are we excluding the right of private

citizens who payed for the interceptor to use it? Mr. Russell answered no.

On policy.B-4, Mr. Larson stated that he found this policy to be redundant

and,easily strikable from the report. It was pointed out that, In the preparation

of this policy, Mr. David Hugg (a memberof the Land Use and Community Deve,lopment

Committee) noted that,many times theState doesn't follow its own policies and

puts facilities Where there aren't any Infrastructures.to, serv,ice them.

Mr. Larson noted-that another point be.ing spoken to in.policy B-4,was

the concern that the federal,government bring its policies in.,the State of

Delaware in line with other community objectives.

Mr. Weiner cautioned-the-Commission against taking.a firm stand on what

m1ght be desirable In the efficient use of community facilities, as to have one

hich would have urban concen-
believe that the Committee is proposing a policy W

tration for everybody except for those who may haveagricultural sites.

Mr. Walton pointed out that there is not enough land in the Sta.te of Delaware,

for every resident,to,have.10. acres of land.

.,Mr. Larson suggested that the-words "should be located" be added to B-4

so as to read '.'Public and publIcly supported facilities, services, institutions

and facilities should be locatedin accordance with the policies above,.i.e.".

Mr. Oldach stated that the Commistion.seems to be addressing the.problem of

land use, recognizing that we'Te going to,have to restrict people from spreading.

out all over. If the Commission does feelthat this Is a critical problem.and

we'll. have to control the use of land much more,than we have in the past, then

the Commission should be more specific.

Mr. Biondi said that the Committee Is-saying thatpublic investment should

not encourage sprawl by locating outside of the areas of urban concentration.

Mr. Larson, commenting on Mr..Oldach's statement, sai,d that he feels that,

zoning alone cannot effectively control sprawl. Controlled public investment

is probably the most muscular tool that can be used to guide development. This

has the potential to be even a stronger tool for guiding development than

tra ditional land use planning zoning. That is what the Committee tried to

emphasize strongly.

It was agreed to change B-4 to read "Public and publicly supported facilities,

services, Institutions and facilities.shoulA be located in accordance with the

policies above, for example publicly supported services should be located so as

to serve urban,concentration. Recent school and other,service location decisions

often have been contrary to this approach".

C. Promotional Programs

Mr..Blondl asked how one goes about promotional programs. Who does the

public educate in this area (beyond publishing the Commission report)?

Mr. Larson said the Committee felt that you have to go beyond the enunciation

of. policiesand programs, particularly where you're trying.to make recommendations

that are new. The suggestion was made by the.Economic D evelop ment Committee that

the Commission continue as an educational and monitoring group beyond the

original life. The Commission should explain why they made these recommendations,

in order to get the public to want to.develop that way.

Mr. Biondi asked If anybody, except the people in the planning department,

when they publish various district studies, and explain their rationale, convey

to the public the general ideas behind what's happening.,

Mr, O'Donnell noted that New Castle County holds an extensive series of work-

shops for that purpose.

Mr. Biondi stated that there is-a problem in that many people dontt see.

anything wrong with stretching development along Delaware's roads. He asked

how you go about changing their minds. Mr. Bradford said that this report

shouldn't necessarily spell out what the educational process-should be, however

it should be indicated in this report that.there will be follow-up (the reasons

for and against the recommendations will be explained).

Mr. Biondi noted that, as past experience has shown, the public express

concernonly when something physical happens directlyatfecting them. This Is a

problem the Commiss.lon should address in greater detail, as to how to get the

public interested at all in the Commission's report. He said that "if. they all

come out and disagree with it, it will be an accomplishment",.

Mrs. Greer stated that she felt that the vocabul ary used In this, report

needs to be simplified, in order to get the report into terms that the public can.

understand. The way the report Is received and the vocabulary used is going to.

go,@a long way Ln: getting the public support..@

Mr. Biondi agreed that simplification of this report Is In.order. There Is

also a problem with creating.public interest in State problems. Mr. Walton noted

that he is disappointed In the attendance at the Commission's meetings.,

Mr. Weiner said that Section C Isapplicable to the entire Commission Report

and should be extended to cover It.

Mr. Biondi stated that the Commission members ought to. understand, in a

precise manner, what we are discussing and dealing with. After the Commission.

understands this, there Is a problem communicating this to the public.

D. Jurisdictional Arrangements

Mr. Russell suggested that Section D be held, in abeyance until the dis-

cussion regarding paragraph 4 on page 5 Statewide,Standards.

Mr. Weiner pointed out that D-6 doesn't quite have anything to do with

jurisdictional arrangements. Mr. Weiner moved that.item D-6 be stricken.

Mr. Biondi asked for the meaning of D-6. Mr. Weiner expressed concern with

the phrase "of servingthat development% He felt that.th.is impli,es services

outside of the development. It was agreed that this policy should be uniform

statewide.

Mr. Chamberlin pointed out that in any zoning hearing overa proposed new

development, the public points out that this development will cost the people who

are already in residence varied amounts for additional facilities (police, schools).

The new development should (in the sense.of some sort@of capital grant-in-aid)

pay for these additional facilities, which would be Indirect or external. costs.

The basic effect of that is to suggest that those.capital facilities be.financed

through mortgage on the house rather than some form of municipal indebtedness,

Mr,. Chamberlin felt that this is a mistake because the.consumer ends,up paying

probably twice.as much.
Mr. Biondi suggested that policy D-6 is c losely related.to what's being done'

in New Castle County under the planning concepts at the present time, however,

this policy would make quite a difference In Ke nt and Sussex Counties.

Mr. Larson said that policy D-6 wa s, intended to try to find a way that those

newcomers would meet the incremental costs of areawide or communitywide improve-

ments necessitated by the fact that a new development had come into an area.

Mr. Chamberlin expanded on this by,suggesting adoption of.the user charge

concept.

Mr. Weiner felt that the words "user charge concept" should be stricken.

from D-6. If there is an abusive practice existing, then that should be addressed,

however', a new.concept has been developed regarding user charge concepts. For

example, the Highway Dapartment came up to New Castle County and said together

with New Castle County Planning Department, that If the corridor area Js going

to grow, it was suggested that the people living there will-now.pay for major

public highways out of their pockets at 9-10% interest on the@ir mortgages

instead of using public,financi.ng under tax,exempt bonds and programs that

everybody else In this State has always received for public growth. That is the

user charge concept of serving those developments that's been proposed in New

Castle County. If the Commission is talking about a different kind of problem, .

it should be made very clear, if not then the Commission should be very careful

about the wording, as it could beeasily misunderstood by laymen.

Dr.*Latham expressed confusion over two aspects of Mr. Weiner's statements.

One is the funding aspect. He didn't,see the connection between having users

pay for services and necessarily financing It privately. The other side Is whether

or not the users should be paying for It. He suggestecl@that maybe what's missing

is an additional statement that says 11where costs exceed benef.its". There are also

benefits derived from additional development. It Is a narrow concept to say that

additional costs are the only impact of development on the community.

Mr.@rO?Donnell, In respbnse@to-Mr. We1ner'-s-statement, said that as

far as he knows, New Castle.County Planning Department has not endorsed user.

fees in the area of corridor transportation.

Mrs. Smith said that If the Commission Is talking about trying to control

growth and channe I It through the publiciacilities, there are totally unmeasurable

benefits that accrue to people who can .af f ord to and. choose to .11 ve outs I de. urban

concentrations. If you're going to talk about user charges, it may be necessary

to measure what benefits accrue to someone who l1ves on 10 acres with the fact

that he can have others channel Into concentrations so he can have his 10

acres.

Mr. Biondi stated that government has some responsibility to help people

find a decent place to live and provide some governmental support for doing

that. The theory of government is thatrpeople come together and,pool their

common resources and do things overall for the benefit of the entire group that

they couldn't otherwise do. He stated,that.."if,we're getting down to the concept

of user charges, then maybe we ought to get down to whether we need County

and State governments to start with.

Mr. Bradford stated that he was concerned about carrying the user,charg6s

to the absurd. He was also concerned that D-6 mentions "incremental costs"

which mean an additional cost brought on by some addition which requires a new

unit, and it's possible in places that have sufficient capacity - there might be

no incremental costs in the sense of capital,costs foradditional people liv-In g

there. On the other hand, if you're trying to develop in a place.that Is

concentrated already - that may be just the straw that breaks the camel's back.

Therefore, incremental costs may assess someplaces and not others.

Mr. Biondi stated that when all the different branches of government come

together and approve a development In a certain location, then the government'

has exercised its clout and therefore, these incremental.costs are a public

responsibility and a part of the whole governmental system of cost. Why do you

have to add a punitive tax system on top of a regulatory system.

Dr. Latham felt that a distinction should be made between the different

kindsof benefits that are provided. Certain ki.nds of benefits are so direct to

the consumer that they ought to pay for It, such as streets, and utilities inside,

of development, etc.

Mr. Biondi stated that this is accepted. Oe,ople havealways built homes and

built their own roads to connect with the maln-roads.. The.same thing is done in

developments, however when you get away fromdevelopments and start talking about

incremental governmental-costs, what-youl-re really doing is talking about

assessing a different governmental cost.

Mr. Kreiger felt that policy D-6 is very discriminatory. He felt that

D-6 would be a deterrent to people coming into Delaware.

Mr. Larson seconded,Mr. Weiner's motion to delete,D-6 saying that if all the

other policies work, this policy won't be needed. This policy was designed among

other things, to got at the problem of sprawl.

Dr. Latham stated that he agreed with Mr. Larson to a certain extent in that

all the other policies an d the user@charge concept are substit utes for each other.

If you perfect the user charge concept appropriately, you don't need any other

.policies. Growth will go where It's most economic, it will@make use of already

existing facilities, etc. However, if.you use the other policies talked about

concentrating developments without regard.to.cost, then you,may be raising the cost,

of,development, raising the cost of people to.f,ind better homes and a better lite.

It will be impossible fora person whowants to get away.from concentration and is

willing to pay a very high cost to be able to do that. .,These policies'wil.1 be,

Imposing on people a decision about where they must live, Instead of letting

them take the budgets they have.available and deciding for themselves If it's

worth,payinq the ful.1 cost-.-for what they want to.do or not.

Mr. Biondi said welre talking about the average man making $10,000-$15,000

a year. Dr. Latham said there is.no conflict - that man could*never afford

to live outside the concentrations, he would never be making that choice..

Mr. Chamberlin d1sagreed with Dr. Latham. He,said.many examples of when

someone purchases 2f acre lots off of afarmers field and.puts in.a couple of

septic tanks, runs the dry waste down a country road and on down a road, that's

the che.aoest.way and where's your user cost?.That's sprawl.

Mr. Weiner felt that pollcy,D-6 is a very specif.ic policy aimed at a very

specific group of people, He reiterated that this policy should be stricken.

On the issues of user costs, Mr. Weiner stated that he always felt.that our basic

,policy was to try to get people to be able to live within our society so that
those who had more paid more taxes, in a progressive tax fashion. Example: a

man making $50,000/year Is probably.using the same amount of water (or less) as

the man making $7,000/year. Yet the $7,000 pays the same as the.$50,000.

Mr. Cooperson said It is not possible for any economist to determine what

the incremental, cost is for one individual person to do that. He doesn't see any

possible practical way of assessing fairly a user cost, therefore, why even

entertain it as a serious way of taxation.

All present were In favor of striking policy D-6 as moved by Mr.,Weiner.

Agriculture and Farmland

Mr. Walton gave some background on this policy. He stated that the problem

with farmland preservation is that farmers,,like everyone else, are entitled, to

reasonable returns for their life's investment.on their property.. The farmers

are not complaining about the existing system. The concern should.be with New

Castle County where the greatest population Is because youdon't have 10 acres a

person for everyone in this State. His position is@to preserve farmland for

the future.

Mr. Biondi asked how much farmland In the State is prime farmland? Mr. Walton

answered that 413,000 acres Is prime farmland. classified as 1., 11, and 111. He

further explained that to make Class I land an.economical agricultural unit, it

will be mixed with Class 11 and III land which is.drained. The net income of

Class III land is comparable to prime land. Any type of Classl, 11, and III land

can be economically farmed if it's in proper economic units of agriculture.

'Mr. Biondi asked what percentage of undeveloped land in the State is classified

as prime farmland, Mr. Walton said that of the 413,000 acres it could all be

considered prime farmland and worth preserving. He said'.he isn't sure.if forest

and timberland is included In this figure, however there are several.companies

buying timberland In southern Delaware harvesting.large crops of timber. That

takes up Class III land right to the digit. Class I land in Delaware is located In

Dover, Middletown and Bridgeville.

Mr. Weiner agreed that prime farmland, as much as,is feasible, should be

protected and preserved so It can be used for those purposes.

Mr. Biondi stated that if you're talking about a policy for preserving prime

farmland and coming up with tax incentives, he felt-th.at you're saying there

should be some public policy decision that this land ought tobe preserved as

prime farmland. He asked if that's a.pu blic policy deci,sion within. that context,

should the decisionbe left to the farmer, whether-or not to farm his land or

will It be a system of governmental controls where land is farmed.regardless?

Under Implementation, Mrs. Smith questioned the phrase '.'investigate the

use of incentives In addition to the Farmland Assessment Act". She asked if

they,'re saying that the Farmland Assessment Act. has to be a basis,for any

program of implementation. Mr. Larson answered no, because it is already In

effect.

Mr. Kreiger suggested that the last three sentences of paragraph one

under implementation be clarified to say that the tax.should be on fair market

value as farmland.

Mr. Biondi suggested that the fourth sentence under Implementation.be

amended.to read "Another Incentive Is modification of estate.and inheritance

tax laws to insure the orderly transfer of agricultural land so that value is

based on agricultural use rather than,fai.r.market value at Its highest and.best

use. This amendment was agreed to by all present.

Conservation and Open Space

Mr. Kupnnen explained that after he submitted his minority report on

Finding Num ber Two the wording was changed which answered his concerns.

Mr. Walton clarified on Finding Number Three that he's saying t hat what-

ever is deemed to be open space has a right, in itself, to be open space and

not necessarily to be a residual of all that isn't developed. It was moved

@that this finding be amended to read "Open space should not automatically be

regarded as land awaiting..6111.@,'
Mrs. Slights stated that this Finding Three. was:'meant to address the feeling

that we should have certainl6reas that are considered open space and they are not

holding grounds for future development. That does no t mean.al.1 open space that

has never been developed but rather alcertain or specific percentage of open space

that will stay as such.

Mr. Walton pointed out that the State owns 40,000 acres for parks and

recreation. That's open space.

Mr. Bradford asked if there is a method by which open space I-and can be

transferred by an act of. the Genera I Assemb ly. from open space to some other use.

Mr. Webb sald a piece of open space land can be.sold the same way it was purchased.
Mr. Russell asked what Is the process for changing a restriction in a deed.

Mr. Weiner said complete concurrence of everybody who has any right in It Is

required.

Mrs. Smith asked in.the statement "Open Space should not be regarded" who

.would be doing the regarding? Mr. Walton said this refers to everyone, State

agencies and the public, as well as the private developers.

Under policies, Number One was agreed to by all present.

Policy NumberTwo, was deferred due,tollis.'-,-,connection to the coastal zone

controversy.
Mr. Biondi asked Mr. Kuennen what hi s objections were to Policy Number 'Three.,

Mr. Kuennen said again, the wording had been changed since his.objections were

ral.sed and he agrees with the statement as rewritten. Policy Number Three was

agreed to by all present..

Policy Number Four was agreed to by all present.

Mr. Biondi asked the meaning of Policy Number Five. One of the most critical

problemsin land use is the amount of useable,water.to be available for future

development. This is one of the most@limltlng factors In some areas.

Mr. Biondi stated that this policy cal.ls for flexperimental collection,

retention and water recycle systems". He felt that the policy should call for

development of,water resources.

Mr. Cooperson felt that the word "experimental" is not heeded. Alot

of the technology for water recycling is already there and has to do,.with

the willingness of governmentto comm[t capital In that.direction. Secondly,,

he felt that the development of water resources Is addressed-in this policy.

Recyclingis a way of developing water.resources.

Mr. Biondi asked why the Committee was concerned.with experimental,methods,

of collecting when there are some time honored methods of, getting water resources

that just require public Investment. Mr. Cooperson said that he's talking about

once through systems, which are ultimately self-defeating.

Mr. Weiner felt that Number Five Is poorly worded. He felt that the

Committee was trying to say that we should "support collection, retention and

water recycling systems as one of the means for insuring an adequate water supply

for agricultureP industry and community development". This policy should.be

reworded to say that. Mr. Kreiger questioned the use of the word "support"..

Mr. Weiner said that meant financially, Idealogically, Intellectually,

legislatively, judicially- everyway possible that's good for the country. The

Commission agreed to accept Policy Number Five as.,reworded by Mri Weiner.

Implementation

No objections or'comments were raised on Number One. On Number Two Mr..

Russell.noted that Secretary Bryson had previously questioned whether you could

indeed, finance the massive public expenditures through boat licenses and park

fees.and general property taxes.

Mr. Biondi felt that Number Two.ls looking.for some regular commitment of,

@a percentage of capitalfunding, for example.

Mr. Weiner felt that this paragraph was confusingly written. The point

being raised is that public expenditures.for acquisition of open spaces through

the use of municipal or State bonds would be paid for by special taxes and.fees.

Mr. Biondi noted that if you're saying that you should pay for open,space

acquisition by bonds financed by certain special taxes, then what youtre saying

is that public expenditure for open spaces'doesn't have a very high priority.

Mr. Russell suggested that the wording be changed so as to read: "Open.

Space wi'll be acquired by expenditure of public funds". He questioned.the

definition of open space and asked if this eventually means park land., If so,

this could pose a problem as it has in New Castle County who owns approximately

3,500 acres, half.of which is undeveloped'. due to the fact.that this is such a,

large capital commitment to develop.

He explained that he was trying to point out what might be a future problem.

If You're talking about open space that will remain undeveloped because you donft

want development and it's going to stay undeveloped that's one question. If

you're going to purchase land to make open space and then develop.it, then public

expenditure becomes.a real priority problem.

Mr. Biondi suggested that Number Two be changed to read: "Public expenditures

for acquisition of open space should have a high-priority". This was agreed -to

by all present.

No objections were raised on Number Three.

Mr. Cooperson said that he participated in the@Christina Basin Study. He

explained that there were two phases of the Study'. The first part dealt generally

with water resources and planning development policies; the second phase dealt

with an examination of specific measures for land development. He felt that

Number Four is so helplessly vague that It's meaningless becausethe first phase

had to do with the whole approach to planning and he wasn't sure that any of

th@@se measures, such as were analyzed in that study, could be put into practice.

T@Mere were no specific recommendations that could be put into practice. The

second phase is a compendium (a @handbook and a listing) of a whole.multitudb of

development practices for this area and other areas,in the county. To say in

an unselective kind of way those practices should be.required by the State is

meaningless. Which pract Ices? Some of them may,be in conflict with one another

and may not be appropriate to this area. He, therefore, moved that Numberfour

be deleted due to its. lack of specificity. This move was seconded and agreed

to.by all present.

Mr. Cooperson further suggested that it be@notedthat many of the measures

in the Christln-a Basin Study which did deal wit.h responsible development practices

should-be seriously loo-ked@'into and possib ly adopted by various governmental

jurisdictions In the State.

Number Five was agreed to by all present.

Mr. Bradford again expressed concern with.the lack of a clear definition

for open space. He explained that everyone has h1s own ideas of what open space

is. Since this is a title of a section, this, should be clarified,

Mr. Biondi asked Mr. Kuennen and Mr. Larson and members@of the Land Use and

Community Development Committee to come up with.a clear,definition of open space.,

.that fits within the context of this report.

Residential Land

Mrs. Aughey submitted a minority report.expressing her concerns with the

wording in this section. She felt that Policy Number Two should be reworded to

state."Delaware must assume leadership in helping people She also said that

housing Is a.human need not a right. She said'you have a right to.those things

which you.are willing to do something.about it,is not the governments obligation

to provide you with a house or food except in the case of children or disabl.ed

people.

Mr. Wei.ner said he had no objection to changing the phrase "Housing is a human

right" to read "Housing is a human need". He felt that this doesn't change the

th.r 6st of what we have to do.

Mrs. Aughey stated that her main concern was with Policy Number Two the word

assume She felt this should be changed to "Delaware should assist".

Mr. Weiner pointed out that In Mr. Kuennen's Minority Report the point Is

raised that It's a cop out to believe.that Delaware shou-id take over the.

responsibility when to a great extent the federal government has not been doing

their job.

It was suggested that Policy Number Two should be changed to read "Delaware

must assume a share of the responsibility together with the federa.1 government.,

of assuring housing for those who, because of their physical, social or economic

condition, are not adequately housed by private market"., It was moved by Mrs.

Slights and seconded by Mr. Keifer that this policy be adopted as amended. All

present agreed.

Mr. Biondi noted that two county representatives were tither opposed or

not voting on Policy Number Three. Mr. Cooperson explained that they felt that

what was being sought in this policy,was a loss of control. by the county@of their

governmental prerogatives.
Mr. Biondi asked whatare the laws that are "those laws that inh-ibit".

Mr. Kuenneh said there is a Whole line up.of agencies that you have to go through

with different regulations (forpermit procedures and zoning ordinance). The

State should have a common set of procedures and permits, etc. for construction.

Mr. Cooperson questioned who is defining which laws are.inhibiting develop-

ment. What the Committee was looking for was a simplifi cation and a reasonable

consistency among regulatory agencies and also laws that would encourage people to

maintain and upgrade the properties that are, already.held. He asked if this

policy could be construed to mean advocating the lifting of all zoning and

environmental legislation because somebody in the development community.feels

It's Inhibiting their ability to make houses. Mr. Cooperson felt the policy

should be rewritten.

Mr. O'Donnell thinks the intent of this policy.1s for the developer to

know (for example) that In any place in the State,when it has put,a catch basin

in he knows what they're talking about and there aren't three or four different

interpretations.

Mr. Weiner clarified that this policy Is intended to.say "Let's have

equitable, effective housin
g and land development control regulations that are

app I I cab Ve' and workable.'.'

Mr. Walton explained that housing codes and building codes were not stated

in this policy because there may be other regulations andthey couldn't all be

enumerated.

Mr. Chamberl in said that this policy was suggested because of the

frustration that exists In trying to process a piece of land, for any use.. through

the various public agencies at various, levels. He doesn't think anyone could.,

sit down and list (for residential use forexample) all of theagencies and all

departments within each of those agencies you'd have to clear@[email protected] you

could "break ground". In addition, the substantive areas of regulations are so

intermingled and overlapped that It is Impossible to know when you've gotten an

approval or not. This is a system that is expensivej, time consuming, irrational

and unreasonable.- It Is more like a. maze than a process..

Mr. Biondi asked Mr. Chamberlin and Mr. Cooperson to rewrite and clarify

Policy Number Three.

on Policy Numbe.rFour# Mr. Biondi asked, if they weren't trying to lower the

rate of escolation. Mr. Weiner said he felt the Commission should support this,

policy.

Mr. Walton explained that he opposed this policy because he.feels It inter-

feres with the free market I and compatitiveness.He felt that the consumer.gets the

cheapest costs when there is competition between.developers.and builders.. He

felt that when the State steps In, it ends.up costing the.consumer.more,

It was moved and,seconded that Policy Number Four be.,adopted as_w.ritte.n.

Mr. Walton was the only no vote.

The Implementation section was accepted as written.

Comynerc I a ILand

Mr. Biondi asked what is meant by Finding Number Two. What is meant by

regional? Mr. Walton explained that Is.a shopping centerof a certain.size that

servicesla certain area (not local. shopping,centers) for.example, Tri-State,
Concord and Blue Hen Mail. Sussex County c an't suppo rt a regional mall and

Dover can't support another mall (one just went bankrupt). There was discussion

on whether New Castle County could.

it was moved and seconded that Number Two_be stricken. All present agreed

-except Mr.. Walton recording the on.ly no.vote..

Mr. Weiner expressed,concern over Finding,:Number Three. He.stated that

other ventures were not asked to give market,analyses,and many marketranalyses

a re not accurate.

Mr. Biondi stated thata market analysis doesn.1 t a.1 w Oys guarantee success

in any commercial venture. However, h,els never seen a commercial venture on

rable market analysis. He suggested rewording this
which you couldn't get a favo"

finding to read "A commercial developer should be expected to show economic

justification for a project".

Mr. Walton said the point of Number Three was.that the taxpayers of-this State

are required to make sizeable expendituresfor commercial development (in the form

of overpasses, intersections and drainage ditches) and it's unfair for the tax-

payers to.participate-in the bankruptcy of afinancial venture.,

Mr. Biondi said at the present time the.complaint Is on the behalf.of the

developer that they are being compelled with the,economics of aproject, to solve

governmental problems.' In terms of highw.ays,...sewers.and.,drainage, th .at pre

existed the development. This Is happening ln.New..Castle County.

Mrs. Aughey felt that Number Three is of.no particular use simply because

you can get a market analyst or a consu.1tant to g,ive,you,almost anything. This

is something that the judgement of the people of planning departments of the

counties should consider as part of their decisions.

Mr.-B.Iond'i noted that there-Is no proven method by which to determine a

successfu I business venture. It really takes a variety of people In the money

market, the planning market location, etc. to come to,.a decision on a successful

location. -Market analysis Is just one of maybe 10 factors that go Into this

kind of a decision. Mr..Blondl objected to market, analysis being Isolated when

many other factors are equally as Important.. He suggested that Finding Number

Three be amended to read: "A commercial de.veloper..should be expected to justify

proposed commercial development and show need for.such.development...It was moved.

by Mr Walton and.seconddd by Mrs. Slights that Number Three be.accepted at

amended. This was agreed -to by atl present-,

Under Policy 11 1, Mr. O'Donnell expressed,concern wIth,the Word,

"disperses He stated that this term Is contradictory. If traffic.were
dispersed, there would be no problem. He suggested this phrase be changed.. to,
read "Commercial strip"development-that impedes traffic flow throughout,,'".

This policy was agreed to, as.amended,--by a.11 present...

Mr.,Kuennen explained his opposition to Policy Number Two. He felt the

frame of reference dealt with New Castle County and he felt that this policy

couldn't be implemented in lower Delaware. He felt this.statement should be

more specific.. Mr. Biondi suggested the addition.of the phrase "where strong

core districts exist" to the end of this policy.

Mr. Weiner felt th at Policy Number Two would-discourage commercial develop-

ment in the rural suburban fringe at the expens.e.of moving all of it into the

central business district. He felt that this policy needs another sentence. He

feels that we should encourage commercial development in and around existing

central business districts, however all commercial development should be designed

to provide services to people and should be located in ways that will accomplish

that purpose.

Mr. O'Donnell asked what the term "around" means. Mr-Biond! agreed.that if

you're talking about encourag ing development In downtown central business distri cts

like Dover, Wilmington or Newark, you have to strike out "and around".. This was

agreed to by all present.

Mr. Walton agreed that the purpose of this policy was to'help existing

downtown business districts.

There was much discussion as to whether Policy,N,umber Two was referring only
to downtown Wilmington or if this was to be a Statewide policy. Mr..Biond 1

suggested that this policy be amended to read: "Major commercial development

should be encouraged.in existing central business.districts". Th.is was agreed to

by all present.

Mr. Kreiger asked the meaning of the term "incidental" in Policy Number

Three. Mr. Webb felt this.meant adjacent to. The discussion against the regional

shopping center said It would create its own growth and you would have to justify

large concentrations in that area.

Mr. Biondi noted that this paragraph is clearly not related to the Wilmington

problem.

Mr. Chamberlin explained that-a regional shopping center,generally includes

two department stores, reqvires In excess of 40 acres of land, has somewhere.

around 400,000 square feet of retail, saies area and will draw customers from

approximately 30 minutes travel time. There is'no true regional shopping center

in Delaware at this time.

Mr. Walton said this policy was meant to be in conjunction with the idea

th at we have enough regional shopping,centers.. The Committee also meant this

@policy to discourage shopping centers f.rom locating In areas where it would

encourage other development to come to it. That.1s.wh.at was meant by the

phrase "incidental to urban areas

Mr. Blondi@raised several points.concerning regional shopping centers. (1)

They kill off all small commercial. development around a regional shopping center,.

to'some-6xtent.' (2) They-don't draw from a specific urban area, they draw from

a wide market - counties.surrounding Delaware as well as from within the State.

Mr. Kreiger suggested that Policy Number Three be deleted, because he felt

that this policy is not in line with discussions on developing Delaware. He also

felt that this policy implies a lack of trust in the County,goyernments to

enforce their zoning laws. Mr. Walton said, the Counties' tract records were not

much better than the State's when It comes to enforcing effective.development

'policies.

Mr. Walton explained that he didn't vote on this policy because he felt that

If the money interests wanted to bui.1d ashopping center, and saw.it as an

effective market, he had no objections to it being built in the proper area,

however he felt it should be "incidenta,l to the urban areas" and this wasn't.

defined clearly..

Mr@ Biondi found the term Iturban areas" to be rather vague*

Mr. Kreiger moved that Poli.cy Number Three.be stricken for the following

.reasons:

(1) There isn't a good definition of the term "regional shopping center".

(2) It's not clear what's meant by the term "incidental".

(3) This policy is anti-economic development.

This motion was seconded by Mr. Oldach. All present voted in favorexcept

Mr. Walton recording the only no vote.

Mr. Cooperson said that, as far as he understood, the objective of the

Delaware Tomorrow,Commissi,on was not simply to look at ways of encouraging

business, what we're concerned with is the total environment and,people of the

State of Delaware.

Mr. Biondi asked what was meant by Policy Number Four.. Mr. Cooperson

noted that this policy is just a restatement of theconcern in Policy Number

One. Automobile-oriented uses do tend to take up alot of street frontage. It

gets back to the Idea of Impeding traffic flow..

Mr. Weiner as-k ed If this pol,icy was trying to say that automobile repair,

shops and dealers should not be strung out along the highways. He felt it should

be stated that way,,
Mr. Chamberlin felt that the scale of this policy'is ina .ppropriate for

the deliberations of the Commission. This 1-s only one type of commercial

development we're concerned -- with what about other types?

Mr. Wafton said that automobile repa ir shops was just an example and could

be stricken. Mr. Weiner said that then you're saying the same as is stated in

Pol icy Number One.

Mr. Biondi suggested that Policy Number One be revised to say: "Commercial

strip development, including highway oriented uses...".
Mr. Walton pointed out that Number One says."curtail" and we don'twant to

curtail highway oriented uses, we want to concentrate them.

Mr. Biondi then suggested Number Four be changed so as to read: "Highway

oriented uses should be clustered and not strung.out along major highways".

This policy, as amended, was agreed to by all present.

Mr. Biondi moved that the meeting be adjourned. The next meeting of the

Commission will be on Monday, June 16, at 4:00.p.m. in the Cabinet Room of the

Townsend Building, Dover.

Respectfully.submitted,

Dee Burki
e.y

STATE OF DELAWARE
DAVID R. KEIFER PLANNING OFFICE PHONE: 1302) 678-4271
DIRECTOR DOVER
Ref: .1007/1404

DELAWARE TOMORROW COMMISSION

Minutes of Meeting of.June 16, 1975

A meeting of the Delaware Tomorrow Commission was held on June 16, 1975,

at 4:00 P. M. in the Cabinet Room of the Townsend Buil-ding in Dover, Delaware.
The following members were present:

0. Francis Biondi
David R. Keifer
Ernest W. Thorn
John Walton
Joann D. Slights
Ross E. Anderson, Jr.
Carl S. Oldach
Fred G. Krapf, Jr.
Joseph Golden
Theodore Ryan
Secretary John D. Daniello
Secretary J. Thomas Schranck
Peter A. Larson
Dorothy Greer
Secretary Clifford B.,Hearn, Jr.
Mayor Crawford J. Carroll
Marcie Bierlein
Secretary John C. Bryson
Carl Russell (voting proxy for Mr. Mel Slawik)
Secretary Clifford E. Hall

Also Attending:

Dr. William.,R. Latham III
Daniel Kuennen
Bernard L. Dworsky
Peg McClane.
Rita Smith
Spencer Thompson
Rama Singh
Ed'ward O'Donnell
William Bradford

The meeting was called to order by Chairma,n Biondiat 4:25 P.M. At

EXECUTIVE DEPARTMENT

SHERMAN W. TRIBBITT
GOVERNOR f)F
JL,,Av
MR.E.

Ref: 1007/1404 -2-

the last.meeting, the Commission discussed the Land Use Committee

Report up to Page 15. Mr. Biondi noted that there had been some ques-

tion as to what was meant by "open space." He. had asked Mrs. Slights, Mr.

Walton, Mr. Chamberlin, Mr. Larson and Mr.. Kuennen to get together and

define "open space" as it is used in thts report. Mr. Kuennen circulated

a memorandum on the subject to these people and.there were no objections.

This memo will, be sent to the Commission members and at the next meeting,

all referrals to "open space" in thi s report wil'l.be reviewed based upon.

this definition of open space. Any changes necessary will be made at

that time.

MAJOR INSTITUTIONAL LAND'USE

Mr. Larson explained,that the Policy under.this section was inserted

primarily to try to get at the problem,of the lar
,ge public and private

institutions that have resources for planning, land acquisition and develop-

ment of its own, outside the context of government. This policy was also

intended to reinforce the basic policies on land use containedlin this report-

which is to encourage urban concentration. The Committee felt that with a

policy that directs and encourages institutions to conform to State and

local land use planning we Will avoid that kind of situation in the future.

Mr. Biondi asked if this policy is consistent with policy.#l on Page 4.

Mr. Larson said they were consistent.

Under the implementation section, Mr. Larson noted that this could only

be accomplished through Legislation, essenti,ally-to force institutions to

cooperate and conform to local or State plans.

Mr. Russell asked Mr. Larson what would be done with existing facilities

that are in place- they don't meet the required land use plan, but they have
been there so lon Ig they have been grandfathered out. Mr. Larson stated that.

Ref: 1007/1404

he, personally, felt these facilities would have to be grandfathered out

and start from scratch with new facilities.

Mr. Biondi asked: Assuming you have an institution which is going to

purchase or acquire land, and they obviously are going to do it to render

some service. Thev have been in the business of rendering service-for

some time and know more about the need for that service than virtually any-

body else; however, the County authority like the County Planning Office

comes into the picture. He asked if it wasn't possible that the people

investing substantial funds for providing this service know more about

what they are doing than the County officials.

Mr. Larson said that in his experience, the institution is often not

the best one to make this decision, because they are toDtied up in their own

service that they fail to see their impact on the total community.

Mr. Biondi asked if this was a problem in Kent County or Dover. Mayor

Carroll said it was but it is solved now. He said there are cases'where

public institutions lease out properties to private enterprise for either

income or other uses, because they don't have any use for them. For example,

Wesley College leases out to other enterprises for income, so the City taxes

them.

Mr. Russell stated that he felt "private institutions" was not referring

to public education. He felt this meant a non- profit agency 1 ik e United Fund

In many cases, these kinds of agencies have to accept Where they can go.

For example, they are given a property from someone in a will. They cannot.

start from scratch and abide by an adopted land use plan and go where it is

most profitable. They also get in cheaper or at no cost because it is non-

profit. He asked if you cab make them comply.

Ref: 1007/1404 -4-

Mr. Russell further stated that as far,as implementation of a tax
exemption policy, New Castle County is revising what was adopted two (2)

years ago in a constitutional amendment to take all the tax exemption

policies under the County's wing and figure out who is getting what. This

is an immense project as it is done today,., To rethink that will be an

enormous administrative rethinking.

Mr. Larson suggested revising the language under implementation, to

bringthis statement in line with Mr. Russell's because the word "continu-

ation" might imply no grandfathering.. He also explained that the reason the

words "private institutions" were used is because public institutions.are

already tax exempt-,private.institutions have to specifically apply.forand,

receive exemption either from the municipality or the State. He suggested

the implementation.section be amended to read "Privateinstitutions seeking

tax exempt status should comply with adopted land use plans."

Mr..Bry�on asked if this means that private institutions not seeking

this status don't ha ve to comply with the land use. plans? Mr. Larson said

he presumed those would get caught in the normal.land development process.

Mr. Russell stated that another thing the implementation process does

not mention is making the public tax supported institutions abide by, not

only the land use plan, but also the drainage codes, sewage codes, etc.

That is where the problems are with local governments.

Mr. Larson agreed with Mr. Russell and said he would,agree to inserting

"and tax supported institutions" after "private-institutions seeking tax

exempt status."

Mr. Biondi felt that there was a gap between the, policy and implementa,-

tion of the policy. He felt the policy ought to be amended to read: "Public

Ref- 1007/1404 -5-

and tax'exempt privateAnstitutions, services and facilities should be

located so as to serve urban concentration and should comply with land

use, drainage, and other regulatory plans" This amendment,was adopted by

all present.

Mr. Russell suggested finding #2 be amended to read framework of

municipal, county, and State Planning..." This was agreed to.by.all present.

INDUSTRY AND INDUSTRIAL LAND

Mr. Biondi explained that we are going to be discussing the intensity

of economic development in the State and the,rate of growth that we think

the State of Delaware should have. However, these policies should also be
considered in the context of the Land Use Committee Report. We know certain
new industries that will be coming into the.State and industrial areas will

have to be developed somewhere in the State;this section of the report

addresses where those facilities ought to be located and the nature of the

facilities.

In Policy #1, Mr.'Biondi asked if there is a limited number of existing

unused industrial sites? Buildings? To what extent are there properties

that can be renovated?

Mr. Krapf stated that he owns 1,250,000 square feet in the Bancroft

Plant and he does not feel that this should be kept as industrial land.. In.

his opinion, this land should eventually be phased out and put to a different

use. Mr. Krapf further stated that finding #4, which states "...where energy,

water and sewers are available" to him means that.you would never build a new

place. The sites that are available are-tooold,and have too.many problems.-

Mr. Biondi asked if these might be sites that the State could purchase,

Ref: 1007/1404 -6-

clear, and-put upuseable buildings. He.felt the Committee was saying

that even if.there are no utilities available to use.the industrial sites,

we ought to force them to use the unused industrial sites and renovate

them before going out to areas where util-ities are not available.at the

present time.

Mr. Daniello said that he assumes #1 and #2 mean consistent with

'land use plans.

Mr. Larson said'there are substantial. sites zoned,with public.se.rvices,.

and good transportation facilities. that can- be marketed today. This policy

is just intended to make sure these sites are-not overlooked, when looking
for' hew sites.

Mr. Krapf pointed out that the person-who owns an operation should have

a say in where it is to be located.

Mayor Carroll felt that the question of whether an industry decides to

move,into'a particular county is the tract record of that County.' He felt

that in 5 years time Dover will have the same problems Wilmington has. Dover's

concern is that they be given an opportunity to be competitive but to do it
on a basis where the City. is not being bled,to death by the County and State

governments, which put Wilmington in the.position they are in today.

Mr. Larson felt that some of the problem with finding #4 is the word

"available", which to him means economically feasible for extension.

It was moved by Mr. Krapf and seconded by Mr. Thorn that Policy #1 be

accepted as written. All present voted in favor.

In Policy #2 Mr. Biondi asked what the Committee had in mind with

respect to this policy. Mr. Larson said that.this policy was intended. to

attract the types of workers,that need jobs- be that a blue collar worker or

Ref: 1007/1404 -7-

a computer operator.
Mr. Schranck felt that the definition of "needs" should-be clarified.

Mr. Biondi said this meant need for a job not a product.
Dr. Lathlam said there is some danger of adopting a policy that.attracts
industries where you have the highest.rate of unemployment. You will be in

a self-sustaining, self-defeating circle. He suggested that the-Commissiton

needs to balance the strategy of attracting low skill industry with upgrading

the skills of the individuals to.'suit the needs of incoming industries.

Mr. Walton noted that,.in the Committee, he had voted against this policy

because he would.rather see State money and policy being spent in expanding

our own industries. This gets into an economic area which.was not in the

purview ofthe Committee. He said that rather than going out and recruiting

new industries, Delaware development dollars should be spent with those

firms that are already here and can expand their business. There is not a

business in this State that has reached its maximum.

Mr. Biondi then suggested revising.this statement to read:.,"Delaware

should encourage the introduction of new.industries and development of exist-.

ing industries which optimize...

Mrs. Slights, who also recorded a no vote in the Commi.ttee, explained

that she felt.that Delaware had certain-native attractions that would bring

without encoura.aement, specific types of industries that would fulfill the

State's needs. She said we don't want to encourage in-migration of.the kind

that we already have an over abundance of.

Mr. Daniello said that the need for more diversity of industry in this

State is vital. The existing industrial infra-structure does not take care

of-all the skills and needs of people in Delaware at the present time.

Ref: 1007/1404 -8-

He further stated that Delaware is, for the most part, primarily depend-

ent on two (2) industries: chemical and auto. If we could have some

diversity, we would all be better off for it;@ especially the taxpayers.

Mayor Carroll felt that the Commission should. define what is needed in

specific areas.a nd what type of industries you want in those areas.

Mr. Biondi clarified that the land use aspect of this policyrelates

to industries using land. Mr. Walton feels that the existing land ought

to be used. This makes for more. efficient use of land. The expansion of

these facilities will ultimately result.in less land.being taken out of

other uses.

Mr. Larson said there was a fundamental difference between Mr. Walton

and the majority of the Committee on this question, which is the reason

Mr. Walton voted no. Mr. Larson said he felt the Committee is talking about
new industry. He further stated that the phrase "optimizing the State's

resources".is the key to this policy.

Mr. Russellmoved that Policy #2 be accepted.as written. This was

seconded by Mr. Oldach. Mr. Walton and, Mayor Carroll recorded the only no votes.

In Policy #3, Mrs. Slights said that she was in favor in principle of

this-policy, however, she was not pleased with the wording-She felt the word-

ing shouldbee "Delaware should direct industrial development to areas that are

located so that services can be provided,economically.','

Mr. Krapf said industrial development will not go to a location that

won't be economical. Mayor Carroll said there is a question as to what the

interpretation is of "economica.l."

Mr. Russell stated the problem is that, because an.industry locates and

puts a.certai'n amount of money into the.local economy and the local and State

Ref: 1007/1404

governments put.even more out to support those people for welfare, etc.,

that is not economically efficient for that local government.

Mayor Carroll agreed that this is part of the problem, however, he

stated that you can make water and sewers available by agencies other than

the local unit of government. Then the-demands placed on that commun.ity,

as a result of the human needs, is where the burden is placed on the local

unit of government. The local government gets nothing in lieu of taxes,

or services, yet they have to provide the services. He defines local units

of government as a city or county that supplies local services.

t1r. Russell said that we assume government is there specifically for

costs and not for costs and benefits. In other words, they are going to

operate in the red because that is what they are all about.

Mr. Biondi felt that Mayor Carroll has a problem in mind that none of

the policies addressed in Policy #3, he thought they were saying that we

ought to encourage the development of industrial areas that are located so

that services can be provided economically as contrasted with locating them

where the services will cost more to provide..

Mr. Krapf moved that this policy be accepted as written. This motion

was seconded and agreed to by all present with Mavor Carroll not voting

Mr. Larson expla ined that Policy #4 looks at the question.of any future

ports, marine terminals, or pipelines that might be built through the State..

The Committee felt that the State and/or local, governme nts should assume

regulatory and/or operational control- which in some cases might even be

ownership.

Mr. Biondi said he did not know there was anything that was not regulated

Ref: 1007/1404 _10-

by at least four (4) different levels- county, State, Federal and City

levels.

Mr. Bryson said that, at the present time, the Department of Natural
Resources and Environmental.Control does not.have the authority to tell

these facilities where to locate. Withrespect to the kind of uses stited

in this policy, the State, in addition to the County, should have a say

as to where they'are located, in addition to the problem of what regulations

would be imposed on them. He asked what was the concept of operational con-

trol?

Mr. Larsonsaid that would be in the event there was no regulatory

control.. For example, it is possible the State might want to build, own'

and operate a facility such as mentioned in this policy. This applies to

future sites.

Mr. O'Donnell said he always assumed that the State did have regulatory

powers in such things as pipelines and bulk, transfer facilities such as. the

Coastal Zone Act. He clarified that when "Delaware" is mentioned in this

report, this means all jurisdictional levels, not just the State. He also

clarified that zoning control is not enough because it may or may not be

based upon a land use plan, depending on where you are.

Mr. Walton noted that.where utility, electric lines are located is not

regulated by the State, other than by the Public Service Commission.

Mr. Biondi a-sked if it damages the Committee's pol icy to remove the

phrase "operational control." -He said there are levels of expertise involved

that he does not see existing anywhere in the routine of State,,County, or

City employees.

Ref: 1007/1404

Mr Daniello saidhe could envision a situation where there exis ts

a need for a particular facility and there is no way that it can bedone

privately and yet it would be in the interest of the State and its

residents to have operational control. Mr. Biondi said.that when Mr.

Daniello found that case the Commission would agree to that policy.,.

Mr. Krapf moved that Policy #4.be amended, striking the words

11or operational." This was approved with-Mr. Daniello, Mr. Walton and

Mr. Bryson voting no.

It was moved and seconded that the Policy #4 be adopted as amended.

This was agreed to by all present.

Mr. Biondi noted that Policy #5 addresses some of Mayor Carroll's

concerns. Mayor Carroll has been saying that, at some point in time, in

addition to talking about optimum lot size, utility availability, accessi-

etc, you have to look at theoverall impact on the surrounding

.community even if that community crosses a governmental line, such as a city.

Mr. Larson suggested, after the word "accessibility,", adding the

phrase "and the overall impac t on local c ommun ities.."

Mr. Krapf asked how you make a standard lotsize. Mr.-Larson said

what the committee was trying to getaway from was the one acre industrial,

park. They were suggesting an optimum.industrial park size. Mr. Krapf

said he, personally, agreed with this idea, however, he asked why should the

little man who wants a one acre lot be eliminated; why should he beforced

outlof business? Mr..Larson answered because he is demanding services and

facilities far greater than what M returns in benefits to the community.

He can go into an industrial park at less cost to himself and at greate r.

Ref:.1007/1404 _12-

benefit to the community that is planned and well laid out with optimum

lot sizes than if he buys a piece of land, by himself, out in the middle
of nowhere. It will be up to the land planners to determine what is.

optimum.

Mrs. Slights suggested that the word,"lot" be stricke n from thi,s

policy.

Mr. Krapf expressed-concern about the unfairness of this policy to

the "little man." Mr. Larson clarified that.the-Committee is not saying

that the@- "TittTe. man," who- want's to open a- garage, or- set up a little

industrial operation., cannot do it. If he can@fi,nd a site that i-s al-
ready zoned industry,.,he can.do it. This policy refers to areas that are

requested to-be-zone for industry: the Commission would discourage this.

Mr. Oldach feel-s that the Commi-ssion-is not going to be able,to

establish a set of standards an&criteria that will apply to-optimum size,

utility availa bility and accessibil.ity. Every case will be different.

Mr. Keifer said it is difficult to establish:standards for different

kinds of industrial enterprises. He feels, however, that you coul"d.set

some criteria out for new indUstrfal clauses. He said he was in.favor of

this policy.

Mr. Daniello,,said that-until-the time,comes that all counties land

use plans are existing zoning, we-have situations especially in New Castle

County, where the.ind -ustrial land.conforms to the comprehensive plan of

the County@as proposed for industry- but it is not done and the owner will

not-bring the land in for rezon,ing until he has-a buyer. He explainedthat

his Department releases a publication about available industrial sites in

Ref: 1007/1404 -13-

th e State. He asked whatwould his Department do from a promotional

aspect- the only lands they could show to any prospect would be, lands

already zoned. He said he did not.believe that is what the Committee

intended to do, although the policy says, in his viewpoint, that the

only lands that would be available to show to prospects would be existing

zoned properties.

Mr. Larson said that Mr. Daniello raised a problem that was not

dis cussed by the Committee. He thougft.there would b6 a closer relation-

ship between promotion and zoning worked,out under such a program. He

said Mr. Daniello was right and that this policy does tend to preclude

his promoting.a site that did.not go through the process of meeting the

criteria.

Mr. Biondi suggested this policy be amended to read as follows:

Delaware and its local governmentsshould establish standards and criteria

for industrial location, including optimum size, utility availability,

accessibility, and the overall impact on-local communities, such standards

to be met prior to rezoning for industry. The, State shall not promote the

inclusion of a site, for industrial purposes, when the utilization for that

purpose is contrary to the land use planning in the area."

It was moved and seconded that the amendment proposed by Mr.. Biondi

be accepted. This was agreed to by al.1 present.

It was moved and seconded that the policy, as amended, be adopted by

the Commission.

Mr. Krapf stated that he agreed to the amendment, however, he objected

to the policy as a whole. As far as the reference to Delaware and its

Ref: 1007/1404 -14-

local governments should establish standards, he does not feel that

this is the proper vehicle. He feels that this policy is asking for

something to happen before the fact.

Mr.-D aniello said there was nothing in the policy.that is not,

theoretically, being done now,. Mr. Krapf asked why isthis policy even

necessary. Mr. Biondi said it is taking -the argument one step back from

the zoning process.

Mr. Larson'said that most land use plans and most zoning ordinances

in Delaware do not include standards in.criteria for industrial location,

including size, util'ity availability and accessibility and the impact. He

further stated that in the policy, we could be suggesting adding a level

of standard to the land development controls, as they exist today, either

through zoning or sub-division.control. The intent is not to impose

another level of controls. We are trying to make facilities in Delaware

attractive so that people will come.

Mr. Daniello stated that if somekind of standardization of all the

local rules and regulations, results from this, it would be a "blessing

for all concerned.

Mayor Carroll. said he hoped this policy is saying that,.if industry

were to locate in a certain county, that a checklist should be made as to

what demands are going to be placed on whatever unit of g6vernment is.going

to be responsible, not onl,y from the standpoint of utilities. This policy

also says that this should be accomplished prior to the time they put in a

rezoning request to the County zoning office.

The motion on accepting policy #5 as amended, was agreed to with

Mr. Oldach, Mr. Krapf, Mr. Schranck.and Mr. Ryan voting no.

Ref: 1007/1404 .-15-

This completed the revisions of the Land Use Report (except for

those issues to be addressed-in conjunction with the Coastal Zone issue).

Mr. Biondi explained that the Commission has not yet received the.

revised Economic Development Committee report. Two (2) of the policies

suggested by that Committee have not beenresolved:@ the tax policy and

the Coastal Zone policy.

It was agreed that thepolicies listed on page 14,151 and 16 of the
Economic Development Committee Report could be considered at this meeting.

The Economic Development Committee will be meeting on Thursday, June 19

to discuss and write their final report, which will be submitted to the

Commission priorto the next meeting, which has been scheduled for July 2,

1975, at 4:00 P.M. in the Cabinet Room.of the Townsend Building in Dover,

Delaware. Mr. Biondi stated that he hoped to finish discussing pages 14,15,

and 16 of the Economic Development Committee Report and discuss the Cost

of Public Services Committee Report at this meeting, so that, at the next

meeting, the major issues concerning the Economic Development Committee

can be discussed along with the issue of how much growth we want to.stimulate

in the State, apart from the specific issues the Economic Development Committee

@is looking at.

ECO140MIC DEVELOPMENT COMMITTEE REPORT

Mr. Biondi stated that in.Policy #9, the thrust seems to be an indica-

tion that Delaware banks are either exporting capital or they are not loaninq

a sufficient amount of their assets in commercial or industrial.loans. Mr.

Biondi asked if the banks have'anybody to loan it to or.have the overall

economic conditions in the State and the conditions in the State with respect

Ref: 1007/1404 -16-

to development, deprived them of markets for loaning, if indeed there

is a fourth (4) for commercial-industrial loans?

Mr. Bradford.felt that some of the words in this policy are misused.

Development of venture capita 1 is not a banking function. As far as the

background figures in this, policy, Mr. Bradford said,that Delaware has

'historically raised more in deposits than the State has been able to use,

in loans.

Mr. Thompson.(Chairman of Economic Development Committee) explained

that the section concerning "venture capital" goes back to the idea of

developing bonds to make sure th ere was adequate capital available for

new industry coming into the State. He said the se ction on "venture

capital" could be deleted. It was agreed to amend the first sentence in

Policy #9 to read: Delaware's.banks should be encouraqed.to give greater

lending support to business and industry."

Mr. Krapf asked if anyone knew if the percentages in the second (2nd)

sentence are correct. Mr. Thompson said these figures came from the

University staff working on this project. The thrust of these figures is

that there should not be any reason for lack of capital for industries

coming in.

Mr. Krapf said he just wanted to be sure the figures used are complete-

ly accurate. Mr. Thompson agreed to double check the figures.

Mr. Larson asked Mr. Thompson if there was any information that would

indicate what percentage of the commercial, industrial loans go to Delaware

businesses and.industry. Presumably Delaware banks will loan outside of

Delaware and Delaware corporations will borrow outside of Delaware from other

Ref: 1007/1404 -17-

institutions. He felt that the figures aren't very meaningful.

Mr. Walton moved that Policy #9 be accepted as amended, striking

... and to cooperate in developing venture capital sources for starting

new companies." andverifying the figures in the second (2,nd) sentence.

The only no votes were Mr. Krapf, Mr. Biondi, and Mr. Daniello.

Mr. Schranck said.that policy #10 is a noble goal and he hopes it
can be achieved, however, he stated that since he had been on board, he and

Secretary Daniello have been trying to figure out how to accomplish this

goal. He said his Department is funded and mandated by the Federal govern.-

ment to collect certain data. Some of the data listed in this policy is

readily available and some is not Available at all, for example: under-

employment-his office has no way of checking-this figure out; no data is

collected on this. He said that basically,he doesn't disagree.with the

intent of this policy, he just doesn't know how it wi.11 be accomplished.

Mr. Thompson stated that h e felt that one of the problems facing the,

Commission in.making policies is that they have no real feel for the

standard of unemployment, for example. He did not think it would be to o

difficult for a sampling of these figures to.be drawn up, possibly with

assistance from the University staff. Mr. Schranck agreed that the informa-
tion is available, a system has to be put togetheronbow to extract it.

Mr. Walton moved that this policy.be adopted as written. This was

seconded and approved by all present...

In Policy #11, Mr. Biondi asked if there was any conflict between the

first sentence of this Policy and the Policyagainst.the over-extension of

utilities that the Commission discussed in considering the Land Use Committee.

Report. Mr. Larson said he saw no conflict.

Ref: 100711404 _18-

Mr. Biondi questioned whether the second sentence properly addresses

the question-of what we would like the 'State government to do about the

possibility of a natural gas shortage in the State.
Mr. Thompson said he wasn't convinced that Delaware has problems in

the energy area that are as critical as in the surrounding states. The problems

are regional.

Mr. Biondi asked if.the State government should support the.de-regulation

of natural gas prices in@inter-State Commerce or should we support the develop-

ment of an atomic energy power plant.

Secretary Schranck said that it has been said that if you support the

de@regqlation, the price will go sky high and then fall back. He said he

did not know if that was true or not because it will become an over abundance

of supply so maybe we should support it. On the second half of that

question, he said we should support the development of a nuclear power plant.

Mr. Bryson agreed that the State should work with the Federal govern-

ment on policies toencourage nuclear power plants to a point. He said,

however, that it can be overdone and it is grossly over-rated as to how

cheap it might be. As far as cheap fuel-is concerned, the controlling

interest is too closely regulated by too.fewpeople.

Mr. Krapf said that he thought this issue ought to be looked into and

that we certainly should support tnyinq to find natural gas and oil on

Delaware's shores or land.

Mr. Thorn.,stated that, in connection with nuclear power, he feels

that there have been many arguments by "exPerts" regarding the safety and

inexpensiveness or lack of safety and expensiveness. He said the whole issue

is so confused, it is nearly impossible for any local governments to really

know. He felt that, instead of promoting nuclear power at this point in

Ref 1007/1404 -19-

time, we should go into something we are a little more certain of,

for instance coal with coal desulfurization.

Mr. Biondi said that the issues raised on off-shore coastal drill-

ing, including oil and natural gas will be discussed at the next meeting.

Mr. Larson suggested inserting the phrase "short term" so as to read

..."must develop a plan for meeting sh ort term and long term energy,needs

of business and industry."

Mr. Brvson noted that his department has developed one new source-

burning garbage and sewer sludge. It will be located in New Castle County.

It is about a 19 million dollar plant that will turn garbage and sewer

sludge into useable products, including fuel. This is a step in the right

direction.

Mr. Biondi suggested that the last sentence in paragraph 1 of Policy

#11 beamended to read: "The State government, in cooperation wit.h Dela-

ware's utility c ompanies, must develop a plan for meeting short term and

long term energy needs of business and industry, including the development

of new energy sources and the conservation of existing sources.", It was

moved by Mr. Thorn and seconded by Mr. Daniello that this policy be adopted

as amended. It was agreed to by.all present.,

In Policy #12,,Mr. Thompson explained that there is a qeneral concern that.

vie have not done enouqh to brinq the industrial needs and the educational

services toqether so that the kids and adults are, indeed, being trained

for jobs that really exist, rather,than for the jobs teachers are equinped

to teach.

It was moved by Mr. Daniello and seconded by Mr. Thorn that this policy

be adopted as written. This was agreed to by all present.

Ref:1007/1404 _20-

It was moved by Mr. Larson and seconded by Mr.. Walton that Policy

#13 be adopted as written. 'This was agreed to by all present.

In Policy 7#14, Mr. Thompson explained, some of the material was

drafted by the staff while he was in Brazil, and presented to the

Committee. However, these items were not discussed by the Committee one

by one. Mr. Thompson further stated that he felt 14-C was debatable

because Delaware's median tax level is below many, other states. We are

35th out of the 50 states. If you look at the total taxes.collected in

Delaware on per capita income, Delaware is not heavily taxed.

Mr. Biondi then suggested changing the wording on 14-C to read:

"Keep the per capita

Mr. Thorn asked assuming that we want services that are comparable

to larger States, is it not possible to the extent we have to have an

administrative force to accomplish.the.se services,. that our costs are

bound to behigher than other states? For example, every state has only

one Governor. However, the Governor of New York would be cheaper per

person, than the Governor of Delaware.

Dr. Latham said that almost all government services do not have

significant economics of.scale, in fact there are significant dis-economics

scale in most government services so that the larger the size of the govern-

ment providinq the services, the moreAnefficient it is likely to be.

Mr. Krapf stated that Policy #14 consisted of.."a lot of nice words."

Mr. Russell moved that this policy be stricken. Mr. Oldach seconded the

motion and all present voted in favor.

@Policies #15 and 0,16 will be discussed at the next Commission meeting.

Ref 1007/1404 -21-

COSTOF PUBLIC SERVICES COMMITTEE

Mr. Bradford (Vice-Chairman on the Cost of Public Services Committee)

explained that the purpose of this report is different from the other two

reports in that it makes no recommendations for any alterations to the

cost of services of the revenues to support that, simply because of a

lack of guidance from.the other reports to operate on. He said in this,

report, they attempted to gather some facts,and make a presentation on

the costs of the governments of Delaware to.give a data base,,which could

be drawn upon, when the time came, to see what.would be required in the

area of future costs.

He felt it was necessary for the Commission to. try to get an under-

standing of what the Cost of PublicServices Committee attempted to do.

Mr. Biondi noted that subsequent to the Buena Vista Commission meeting,

there was some discussion about some of the data in the report. Dr. Latham

said there was some question about clarifying the material that was pre-

sented, especially with respect to figures regarding revenues for Various

State and local governments. The main-question raised was:." Why didn't

the revenue figures in the Cost of Public Services Committee correspond to

numbers with which individuals familiar with State's budget figures were

familiar with. He stated that if you take the figures that most people

.are familiar with and subtract out refunds and add in special funds, then

you end up with the numbers in the report. The report was intended. to

illustrate what total revenues for the State:.had.been.and how.they had been

expended for the past 5) years. That is the reason a distinction was not

Ref: 1004/1404 -221-

maintained between general and special funds and it was also decided

to net-out any refunds, since those were not available for expenditure

either. He said this information is in the summary.report of May 23.

Mr. Biondi asked Dr. Latham if he considered the figures used in

the report or the figures that some peopleare more familiar with, to be

the valid figures to use for the ki-nd of tool the Committee's attempting

to construct here? Dr. Latham said that the numbers in the report are
more val'id than the normal State budget figures.

Mr. Russell asked if that means that the revenue of the State include

the pass-through dollars dropped to local governments? Does the State

then carrv those.revenues and not the local government. Dr. Latham

answered: "This publication- yes. This report also includes Federal and
inter-governmental transfers?

Mr. Biondi noted that Mr. Keifer, Mr. Bradford and Dr. Latham all

agree that the approach used in accounting for these revenues in the
report, for the purposes of what the Committee was aiming to do, is a

more valid basis than using the ordinary State budget figures.

Mr. Biondi asked Dr. Latham, if, collecting the kind of data that @,as

been collected, we can project'what the cost of growth, for example, will

be at various levels?

Dr. Latham said that in the summary report dated May 23 it states,

that there is a strong feeling that revenues would tend to meet rising

costs of services if no new expenditures were contemplated. The Cost of

Public Service Committee decided that unless the Commission is willinq to

specifv a set of conditions, or agree to a,set of conditions that the

Cost of Public Service Committee has specified, there is not a good way

Ref: 1007/1404 -23-

of putting some numbers down for projecting costs and revenues.

Mr. Biondi asked, rather than talking in terms of absolute dollars,

could it be done in terms of percentage increases in revenue costs.

Dr. Latham said it can be done. Some parts of the expendi:tu res,

.,projected if we have percentage growth rates. We further stated that

one of the main points in this report is that growth has been purchased

largely with external dollars, that is-very much of the growth has been

financed by Federal funds. If,An the future, the same amount of Federal

funds are not available and the State has opted for a certain level of
growth, the people in the State of Delawa rewill have to. pay for it a nd
the money may not be available.

Mr. Biondi said he is trying to see if there is a way that the

Commission can say, from an economic and social.point of,view, a given

rate is desirable., The question is how much will it cost us and

how wi 11 we pay for it all along?

Mr. Krapf asked where is Delaware's rate as far as the dollars ex-.

pended for State and local governmentsover the capital income of the people.

Mr. Thompson answered that in the figures published by the U. S. Department

of Commerce, Delaware ranks 35th in the cost of gove rnment as a percent of

.per capita income.

Dr. Latham said that those figures are difficult to interpret.be ca.use

some gtates provide more services and.turn.around and charge back for them

again-then the money comes in on both.the cost and expenditure sides.

Ref:1007/1404 -24-

Mr. Biondi said that ".he does not think there is any doubt that

the cost of government expenditures per capita, taking State and local

tax burdens together, the State ranks 35th. He also thinks it is true

that, as far as State expenditures per capita, we are one of the highest

in the country. If we are 35th out of 50 as far as State and local

expenditures and taxes per capita, there seems to be some room to afford

cost of future development in the State. However, then the question

arises, at what level will the cost of future development fall. The

Cost of Public ServicesCommittee report seems to indicate that thecost

of services is growing faster at the State level than i't is at the County

and local government levelsand the revenues are growing faster at the

County level than at the State level. If we are talking about the cost of

growth, we may have to talk about a reallocation of the cost of growth

between various levels of government in the State in order to afford that

kind of growth. He further stated that he thinks that if the cost of

growth can be better allocated, we can afford more growth.

Mr. Oldach stated that he thought the Cost of Public Servicescommit't.--e

would approach the problem of trying to evaluate the relevant costs of

services to other states. Dr. Latham,said this is possible but has not

been done.

Mr. Biondi stated that if, for example, the City of Wilminqton govern-

ment were abolished and combined with the County government, he did not

feel that a savings of more than 5% would be realized. In fact it might

end up costing more. However, he agreed that with the different levels of

government operations there is room for improvement and combination of services

and tax savinqS. There was general agreement that local and State qovernments

can be operated more efficiently than at the present time.

Ref: 1007/1404 -25-

f1l.r. Russell asked that if the cost of growth between the, State

and local governments was shifted, would the growth of revenue at the

local levels be sufficient to absorb the Cost of qrowth.

Mr. Biondi said he did not think it would be sufficient. He said

you would still have to have an increase in the cost of government at

the State level. The qu estion is how much?

Mr. Bradford said one of the reasons that, on the disbursement

side of the report, the Committee attempted to get.the total cost was

not so much that they saw a single government for the whole State rather

an attempt to get the total cost of any growth and then go back and look

at where the cost and revenues would fall. Dr. Latham noted than in

regards to the cost.of public services,and growth, at the last Commission meeting

the idea of employing user charges extensively in development was rejected.

When user charges areemployed with developme.nt,.you don't have to worry

about where the,money is coming from you would know where it is going to

come from. You don't have to worry about,who will be doing the expending;

it is all taken place in connection with the development. He raised this

issue to point out a consequence of one of the actions the Commission has

already.taken.

Mr. Oldach noted that the Commission is at animpasse because the.Cost

of Public Services Commi.ttee needs to know what kind of qrowth before they

can calculate the economics and the Commission can't decide what kind of

qrowth till we know what the price is. He suggested the Commission try

out a couple of test cases where you assume a certain growth of a certain

type of population and calculate the cost.

Dr. Latham said that would be relatively simple. The problems would

be getting the Co mm, ission to agree on what the rate of inflation on labor
will be and other costs for the next 10 years-

Ref: 100 7/1404 -26-

Mr. Kraof said that, first of al.1, the Commission should decide

if they want any rate of growth at all. If so, then.they should go

from there and decide at what rate they want growth.

Mr. Russell said that he feels it will be detrimental to the

direction of the Commission for the Commissicnto come out with a state-

ment that we are for or against growth.

Dr. Latham.said he felt the Commission is saying that growth is

desirable provided that it is the kind.of growth that does not cost

Delaware in other values, provided that we still maintain a quality of

life and a standard of living that is desirable for the majority of the

people in the State. The question is at what level of growth do we
start losing something in our quality of liffe.

Mr. Thompson asked how much growth has cost the State of Delaware

in the last 20 years. Dr. Latham said that would bb a major undertaking

of going back through the State budget documents and determining where

the expenditures came in.

Mr. Keifer stated that it would be nearly impossible to figure out

where the historic capital went did it go to service growth or improve-

ments and repairs. He further stated that, in terms of the future, the

biggest problem in handling growth, and the key factor in determining

additional investment, would be where the growth goes, more than how much.

The.gist of the previous conversations was that the Cost of Public Services

Committee@ should not use any of the Commission's new policies in calculating

their figures. The Cost of Public ServicesCommittee should look at things

as they have been done in the past, and then the Commission can put what

the Cost of Public ServicEsCommittee has done into the.Commi.ssioils policies.

-27-
Ref: 1007/1404

Mr. Biondi adjourned the meeting at 8:25 P.M. The next meeting
of the Delaware Tomorrow commission will be held on Wednesday, July 2,

at 4:00 P.M. in the Cabinet Room of the Townsend BuildIing. 'The Cost

of Public Service Committee report will be further discussed at that

time.

Respectfully Submitted.,

Dee Burkley
Recording 'Secretary

DB/hmcK

..........

STATE OF DELAWARE

DAVID R. KEIFER PHONE;. (302) 67
DIRECTOR PLANNING OFFICE B-4271
DOVER

Ref.: 1007-1404

=ING OF THE DELAWARE TOMRRDW CMaSSION

July 2, 1975

A meeting.of the Delaware Tomorrow Commission was held in

the Cabinet Room of the Townsend Building in Do ver, on July 2, 1975..

In attendance at the meeting were the following:

Frank Biondi, Chairman of the Commission
Dave Keifer, State Planner
Sherman Webb, Office of the Governor
Ernie Thorn, Common Cause
Cliff Hall, Secretary of the Dept. of Highways and Transportation
Ross Anderson, President of the Delaware Chamber of Commerce
Robert Berndt, Senator, Delaware General Assembly
Joann Slights, Watch Kr Waterways
Pete Larson, Greater Wilmington Development Council
William Latham III, University of.Delaware
Art Krieger, Attorney
Leon Weiner, Leon Wiener and Associates, Inc.
@Marcie Bierlein, League of Women Voters, Delaware
David Singleton, Office of the Mayor, City of Wilmington
.John Daniello, Secretary of the Dept. of Community Affairs
and Economic Development
Dorothy Greer, Delawareans for Orderly Development
Joseph Conaway., Sussex County Administrator
Thomas Schranck, Secretary of the Department of Labor
Crawford.Carroll, Mayor of the City-of Dover
Jay Cooperson, Sierra Club, Delaware Group
Henry Folsom, President New Castle County Council
Carl Russell, New Castle County Office of the Executive
Peg McClane, League of Women Voters
Rita Smith, League of Women Voters
Rod Ward, Attorney
John Bryson, Secretary of the Dept. of Natural Resources and
and Environmental Control
Bill Thompson, Dept of Natural,Resources & Environ. Control
Dan Kuennen, University of Delaware
John Walton, Delaware Farm Bureau
Bernard Dworsky, New Castle County,20.8 Program
Ed O'Donnell, New Castle County Department of Planning
William Markell, University of Delaware
Frederic Krapf, Frederic Krapf and Son
Spencer Thompson, ICI, America

Chairman Biondic alled the meeting to order at approximately

4:30 p.m.

Chairman noted the mention in the minutes of the last meeting

Df the Commission of a memo issued by Dan Kuennen on the.definition

of the term "open space". This memo was distributed to each member

present (A copy of this memo is attached to this set of minutes).

The other unfinished matterwas the Report of the Economic

Development Committee of June 26, 1975; the Report of the..

Land Use and Community Development Committee in terms of its

recommendations for the adoption,ofminimum standards for state-

wide land development and the Reportlo,f the Land Use and Commun-

ity Development Committee insofar as it relates to the Coastal

Zone. This issue will have to be taken'in tandem with@the Report

of the Economic Development Committee, on the same subject.

The Report of the,Land Use Committee was first considered.

On page 5, policy #4, "Delaware should adopt uniform minimum

statewide land development standards.". Mr. Biondi read.excerpts

from the May 15 memorandum he received from the Land Use Committee

to clarify the Committee's recommendation on the uniform minimum

statewide land.development standardsland the proposed American Law

In'stitute Model L.and,.Development-Code,(ALIMLDC). This memo also

comments on the Delaware.Society of Professional Engineers' report

and their recommendations concerning the Coastal Zone Act.

Mr. Biondi asked Mr.. Larson what would the Commission be

endorsing in endorsing,the recommendations on pages 5 and 8 of.

the April 1 Report, and.on pages,l and,2 of the May 15 addenda

with respect to statewide land development standard and statewide

land.use management plan.

'Mr. Larson replied that the addenda should be considered

because what is contained therein supersedes what was originally

recommended in the April 1 report. This addenda report recommends

the adoption of uniform statewide land development standards and/

or criteria, but they ought to follow the development of a statewide

land use management plan. The Committee has often expressed that

this should be carried out as a cooperative planning effort of the.

State Planning Office and the various countiesland municipalities..

It would be difficult to adopt minimum standards without having

.some notion as to how the kinds of'land uses will be regulated

in the State.

As far a-s item D., "Jurisdictional Arrangement s", on page 8

of the Report, these were written in relation (as implementation

tools) to all the policies under.the Community Development

Pattern Section the first section of the Report. These could

apply to Policy #4, as originally writt6n; Policy #l.would not

apply to the revised recommendation for a joint planning process

between the State and local governments.,.

Mr. Biondi called attention to Addenda Report of May 15,

paragraph 1, and asked what the difference is between a compre-

hensive, statewide land.use plan and a statewide comprehensive

land use management plan. Mr. Larson replied that the two terms

are synonymous. A plan is not a plan without mention,of means

on how to implement it.. If regulations are the means for imple m-

entation, then they have to be included. Obviously, when one is

dealing with questions of land use regulations or controls, as

part of the implementation tools, they become part of the plan.

Mr. Biondi recapitulated: when talking about a statewide

land use plan - in the context of.the Land Use Committee's Report

the Committee means a plan that includes mechanisms (regulations)

for imple mentation.. What else does it include, asked Mr.. Biondi?

Mr. Larson said,that, obviously, the word "comprehensive"

means $?all inclusive."

Do you mean geographically all,inclusive,'within the State,

Mr. Biondi asked?

Inclusive geographically and insofar as the elements of

the planners' concerns are included (all,,elements.that bear on,the

development of the land uses of the State,: transportation,

utilities, etc.), Mr. Larson specified.

From a statewide point of view, how did the Land Use Com-

mittee view such a plan as operating, Mr.. Biondi asked? Mr. Larson@

said that it should be a plan that would exclude the decisions

of the local governments. At some pointin time, there were

discussions as to remove some of the land development control

power from the localities, but a.better solution is for the

count ies and municipalitiesto agree with the.Stateas to what the

m.easures should be. The implementation would be divided by ess'en-

tial ly the same functional categories that the State and municip-.

alities presently divide their responsibilities. Most of the ad-

ministration would lie therefore with the.local governments. The

State, on the other hand, has a major input to make to the devel-,
opment in the way it programs and.supports the capital improvements

particularly in transportation and utilities. With that ability

to control the.rate and number of physical improvements.necessary

to support development, the-State, in turn, is going to have a role to

play in deciding to where and when development should occur. It

has to be a joint,effort. The plan itself need not be detailed so,

far, as getting. down to individual parcel of land a.s, the plan that

New Castle County or Kent County or any municipality has developed.

Mr. Larson added his personal feeling is that the plan should be

clearer in its direction of community development policy than

the. present plans developed by the counties and municipalities.

Some of that policy framework is fairly clearlystated and already

adopted by the Commission in the Land Use Committee Report. As

far as its status is concerned (and again speakingfor himself)

Mr.Larson said the matter was, not discussed, or, voted on in the

Committee. Any plan, regardless of how general or specific.,,

should be adopted by the governing body that participates in; in

this case,. it would be the Legislature...

Mr. Biondi said that Mr. Larson would see more of a process

such as an act of the Legislature adopting a land use plan-as,

contrasted with a Commission of any-kind appointed by the Governor
and confirmed by the Legislature.. Mr.Larson sees the Legislature

giving some policy guidance and if the plan is going to be enforceble

ithas to have the backing of the governing, body.

Mr. Biondi addressed himself to the State Planner, Dave Keifer.

The Delaware Society of Professional Engineers has recommended that

the State Planner develop a plan and recommendations in cooperation

with a coastal zone management. commit-tee (of course, this was

relative to the matter of the Coastal Zone). Forgetting about the

matter of the Coastal Zone problemand the Coastal Zone Management

committee, if someone wereto adopt the short, concise statement

of direction which says: "the State Planner shall develop a State
plan and recommendations" what would you do, Mr. Biondi asked

Mr. Keifer? What process would you follow and what produce would

you see ultimately being developed through that kind of a.process?

Whatrelationship would this plan have.with the other plans that

already exist?

''Mr.'Keifer responded that partly it would be a map, but it

would be more than just a map. This map would show the different,uses,,..

The plan would have to determi ne what the State's.concerns are such

as development patterns.&the State's investments. It would have to

address itself to certain direct land use questions that are.of

statewide significance. The critical.areas of concern.would have

to be determined - areas where land development decisions should

not rest solely with the local governments., The total plan would.

,have to be an attempt to.organize the management of all various

land development controls that we have.and that are not considered

traditional land development controls but."are on the books" as',

State laws: the Wetlands Act, the Beach Preservation Act,.the

Coastal Zone Act, etc. This is where this. consideration,of land

use management v. Pomprehensive land use comes into play., It is

more than Ju st a State zoning map.

Mr. Biondi said, "You said just a State zoning map. This

is what confuses me because I can look at.the New Castle County

Comprehensive Plan. Aclient comes to me and tells me that at the

intersection of Route.X and,Route Y he owns some land that would

make an ideal location for a,shopping center By looking at New

Castle County Comprehensive Plan, it shows Routes X and Y for
manufacturing-industry (MI). Let us assume that the zoning is

compatible with the plan-(and this is not always the case),.one

can still go into the New Castle County Planning Office and file a.

petition for rezoning-to a commercial use. The County will take

another,look at it and based on, the plan or in commection with

the plan, change the use. One still has-to'go through a zoning

process. Through.that zoning,- the administrative bodies are

involved and no@one knows-how it will co me out in the end.. There

is a play.of consideration and a play of factors. If there were

a statewid-e lavd]use-pl.an, would it have any more impact? Would

the State enter into-play thenT Wha-t would,therrelation'ship be?

There-will be@peop-le,with physical pieces of land that they, will

try to put through a governmental process. One-o-f the things

tha.t.has been flowing through these@reports (the Committees,' reports)

'from the beginning,- including the.current report o f.the Economic

Development Committee is that we have to s:treamline governmental

procedures in Delawarefor making these decisions. What impact do

you see (or would you; recommend,) that this, plan@ has?"

Mr. Keifer replied, that if given the a-,ssumption that@S-tate

government ought.to:have some..invo.lvement in-.the land'use business

in t-erms-,of regulating the development of land., then we are.a-lmo-st

locked into another type of permit.system unless regulatory.ac-

tivities are taken away from th'e local governments. Logically, it

cannot be dbne any-other way.

In regards to. management, the State h*a-s-other land use

regulatory systems running. It is part of a State government

management program that would have to get those (systems) into

a coordinated system. May be by doing that, it-would tend to

streamline the process - specifically if the local governments

.can get involved in this. It would be a one stop permit shopping.

A land use plan cannot be done in isolation.
What kind of an instrument is it when it is finished, Mr.

Biondi asked? Right now, therelis.an open question of the extent

to which planning is related to zoning. 'Theoretically,, zoning

should follow the plan, but what happens is that-people reconsider

the plan in light of specific use proposals in the zoning process.

Would that also occur with respect to a statewide plan?

Mr. Keifer replied that it would have to.

Mr. Wiener commented that there is no question that under.

the Constitution and the legal structure, the power of planning and
zoning emanates from the State. The State has, fundamentally,,in

our State, delegated that power to the,counties and. the municipal-

ities. The question that is now being asked since the State has

financial involvement in the municipalities which it supports,

the State now could conceivably want to have some say over and beyond

what it currently has whichmeans taking away some of the powers.

To some extent, the answer that Dave Keifer gave, the State is

taking back its veto power. Since zoning.is a negative power, a

negative function, it says what one cannot do, the question that we

.are faced with is should the State reassume and take.back some of

the powers that.have been delegated? It may be argued that some of

these powers should be taken back by the State or should be deleg-

ated back through the State, if there i's a need demonstrated that

it will serve the public interest. Fundamentally, this is what

the Commission was charged with, to look in the interests of the

pub lic as to what would be the reasons for taking any course of

action. Simply, that the Statelis putting up the money.and,

therefore is supporting certain activities is not a valid reason.

Mr. Weiner said that he rejects,the case in point. Are there

critical areas which would be a justified matter of state concern
which Tun through 2, 3, 4!or.o ther jurisdictions and which.have a

state bearing? The answeris yes. There are matters of concern

(such as the Coastal Zone) that arelarger than any one of,the

are in. Transportation is clearly an area
jurisdictions-that we

that runs far beyond any one municipality or county in terms of

its relationship because there has,to be an overall, regional, or

state kind of a consideration. What.we are really talking aboutis

the kind ofin-depth discussion which would come up with the

answers@to the questions I have been raising., Dave (Keifer) has

expressed some feelings about it; you (Mr. Biondi) have raised a

series of questions about it Ithink it merits,the kind of an,

examination that cannot be handled here to.come up with a policy.

The judgment would have to be whether one is looking at the private

interest or the public interest;,a question which has to be reconciled.

There needs to be a consideration ad to,whether or not, and if yes,

what kind of a State planting mechanism should be developed.
Because of Delaware's.size.does not mean thatit has to have,one.

It needs to be explored and fundamental ly, it has to see how it can

help the public interest. I have heard Mr. Bryson say, Mr. Wiener.

went on, that if there were a comprehensive policy with regard to

certain area of land use, that his task of environmental and

natural resource overseer would begin to fall into line against

thaf kind of a policy and ultimately lead away.f.rom. the kind of

specification type of control that.we have.in the coastal zone.

Of course, the other question was whether to adopt standards.

I would like to know whether they would be performance standards

or specification standards. The position that this Commission

should take is that there needs to be the adoption and the consider-

ation of a State land use comprehensive plan and to define what the

critical areas are, what the transportation problems are;,to
define what the wetlands are, etc. Then come back and make.

specific recomme ndations.and decide where we ought to go. This

problem is so broad and to attempt to.do.all of this in the time

the Commission has, would leave me abstaining.

Mr. Biondi remarked that he looks at planning and zoning

as "a bundle of sticks". All the sticks have been parcelled out.

The State is simply getting.back some of the sticks. To what

extent does the Committee (Land Use) see the State taking back

part of these powers?

Mr. Wiener feels that the sticks havenot been parcelled out

and this is part of the problem. The Department of Highways and

Transportation, for instance, has nothanded out any of its sticks,;

it has handed out a few "bucks". The Department of Natural Resources

and Environmental Control has a big,"stick" that has been handed to

that department by the federal governm ent to a certain extent. What

this Commission should talk about,is a rational reconsideration

of the order of priority.. All the wisdom does not lie necessarily

in the local governments and all the stupidity is at the State

level. On the other hand, all the wisdom does not lie at the.State

level and not at the local level where the sensitivity to the

community needs is equally great. Mr.,Wiener suggested that what

needs to be done is that the Commission should find out how it

wants to shape this "beast" b efore it proceeds with the plan to

make the "beast."

Mr. Biondi then said-to assume that there is a U.S. Route X

running through,a portion of the.State; the county has designated

that area for intensive residential development between 1975,and

of land comes in and files an
1985. A 7developer with 200 acres

application for a DPUD which complies with the plan for the area and

the Department of Planning staff and the Planning Board1consider this
a reasonably good plan. The Department of Highways and Transport-

ation finds that this plan will generate too much trafficin the

area, therefore, the,condition of the Department of Highways'

approval for this plan is going to have to stage that project in

the area that needs improvement. The Department wants the project

staged and the condition applies to the county's approval ofthe

project so that no more than x units can be,devel.oped before

intersection A is improved; no more than y unitsbefore intersection

B is improved. This is the way things are done now.. Does the

s recomme
Land Use Committee' ndation mean transferring that kind

of'controbl by a planning mechanism into a State Planning Department?

or creating a set of standards that stipulate that x units cannot

.be developed along a state highway unless the intersection.is of

certain character? What are we talking about, Mr. Biondi asked?

Mr. Larson answered no.on the second part of the question.

However, the State plan might well.designate RouteX, between

point A and point B as a critical area because it is already over-

congested and the prospect of early, remedial assistance may.be

dim. There may be other problems @(structural, geographical, etc.)

that would influence the Department of Highways' decision to have

that particular area on Route X deferred for development until the

problem is resolved. This State policy, in turn, should be trans-

lated into local policy and reflected in land use.plans and local

zoning for that area.

Mr. Folsom remarked that for instance in New Castle County,

there is a large area called the Middletown- Odessa-Townsend (MOT)

Planning District, where the main constraint to development is

the sewer system. The County is about to remove that constraint

by building a regional treatment plant. So the sewer system

constraint will be removed and the capacity for development will

be shifted to the highway system. Instead of the County getting

this problem out of balance by unilateral decisions, the County

has gone to the Highway Department to give the County an idea.of
what the highway system can handle in the MOT area with the recognized

improvement. The Department of Highways will then give the County

the needed answer. In planning, the approach should be where the

State should enter in (t he State is financing some of this) and
begin talking to the county on a-practical basis, at the local

level on what the constraint is and the limit of that constraint.

If there were constraints in the.matter of environment or in the

matter of coastal zone, other State agencies would enter in.. This

is where State and local planning efforts must coordinate. We

ought to get away from plans. They are long range dreams that are

put away on the shelf. What theCommission ought to look at is

how much development the State can afford and what we can support.

It is not necessary to get another set of pictures,another set,of

principles, that are fine but coverlthe next twenty years.and we are
to be talking about where we are.to go practically and put a,price

tag to it.

There were general exclamations of "Well said",from the,

members.of the Commission on Mr. Fol.som's comments@.

Are these ideas consistent with the Land Use Committee

Report, Mr,. Biondi-asked Mr. Larson?

Yes, was Mr. Larson"s reply,.although.th.ere might be a

problem on the definition of a "plan"'. Obviously, a State plan

cannot be as deep And detailed as a local plan. The State plan

should concentrate on trying to project the resources available in

those areas where the State does.maintain some level of.control,

the way it distributes the, money it collects from,citizens.. The

State plan should concentrate in those elements which are.critical

areas (coastal zone, wetlands, flood,:areas,.beaches, historical,

archaeological, etc.). The otherthing that a State plan needs to

do that we do not have is to get a better handle on the potential

financial resources available to serve development in the future.

We have deplorabl e means of projecting our revenues and expenditures

and a plan is only half a plan because-it does not have the-financing

mechanism attached to it. We h avea six year capital improvements

program but it has no practical projections; it only focuses on

what. is going on now. It takes,six to ten years to plan and build

a treatment plant, as an instance, and we need to know what the

resources will be in the future for what we plan now. There is

little relationship between the State capital improvements program

and the capital improvements programs of the counties and the local

governments.

Mr. Russell commented on Mr. Larson's remarks that one total

aspect of the comprehensive plan,at thelocal level that has not been

considered at all and this is the point of employment and econ-

omic development. These aspects are not considered. Some of these

considerations should come from the State to the local governments.

Of course, the local governments have not considered these aspects

either. The problem seems that a so-called "plan" becomes a

static instrument which it should not be - instead of a tool to

assist in getting from place to place, For instance, the New

Castle County Plan is accepted by ordinance, but it is not law and

therefore it is considered more a static document.than a tool.

This is the way the plan has been used. It is now being updated.

Mr. Wiener commented on the statements,made in regards to

the MOT growth and development. What will make MOT grow or not

grow is people,. The market has to be there. The State can put all

the roads it wishes, or all the sewer lines we want to, but this is

not what will make an.area move.. Any plan,has.to be responsive to

the demand and need which are generated out of the economic and

human elements. My biggest concern, Mr, Wiener said, is that.it

would be a static plan. This is the problem with the Coastal Zone

Act at present-It was not designed to be a dynamic, responsive

piece of legislation. The Commission can speak about standards and

criter ia, for growth and development, and express an overall policy

desire, if the State starts taking.apart the New Castle Comprehensive
Plan and simply superimposes it. with colors and pictures, we are
right back where we started from. The Department of Highways has

been wor king with WILMAPCO and other agencies to coordinate many

of these things. I.propose,.Mr. Wiener said, that you Mr. Chairman

call from this Commission the establishment of a.State.Planning

Commission (or,group) to sit down.and.tackle this.@problem with

from the counties, the.municipalities, the-State

agencies rather than to try and take a position that there should

be.a-comprehensive plan;.o,r that there should be establishment of

uniform standards. We should consider an overall program. If it

@is too specific our purpose will, be defeated.
Mr. Biondi replied that he disagrees with the view that the

Commission should not recommend aland use plan as such. As I listen

to Messrs. Folsom and Larson, Mr. Biondi went on, I get the feeling

that,there, is an agreement that astatewideland use plan is.needed,

but this plan should not duplicate what the counties and the munic-

1palities are doing and should address itself to-those areas where

there is a critical concern either,from.the point of view-of environ-

ment or some other function. this should be the-character of the

statewide plan rather than having the Statedecide residential

within given areas of the county. The,plan -should be concerned

with problems that'have-to be resolved on a broader basis than just

a particular area. Tho- question is how does one define that

concept?

Mr. Biondi asked Secretary Bryson to express his feelings

about this whole J .Lssue. Mr. Bryson answered that, first one must

not confuse planning and zoning... Planning is a must.

Mr. Biondi asked Mr. Bryson how he conceives this plan?

This plan should start with what wehave available regarding the

water quality, the air, etc. and given the set of criteria adopted

by the State and,the federal government. The problem areas need

to be defined so that we know whereindustry can and cannot locate

At the present time, the State Department of Natural Resources has

serious problems with water supply,, in fact there might be the

first law suit coming now because Mr. Bryson would not let someone

"import" water from one area to serve another. From an environmental

point of view, what needs to be done is to identify areas where

there are natural restrictions. The basis of any land use plan has

,to make these kinds of considerations to go into zoning.

Mr. Biondi said that he sees no conflict between the way.,

Mr. Bryson sees a statewide land use plan and the current county's

jurisdiction. The County Plan, Mr. Bryson specified,.does promote

some growth in an area where growth should not.be encouraged because.

there is no water available. Presently, the law is not set in such

a way that we can take water from A industry to give to B industry

(located in a different area). We may have to consider changes

necessary to do this. In the meantime, we have to determine what

our problem-is with the natural.basis and go from there.

Mr. Cooperson said he wanted to.take exception to what
Mr., Wiener said to substitute the use of performance standards for
developing some kind of a plan. This is.a panacea to the sorts of

problems that we now face. ,Let us.assume that ina'given area,

Mr. Bryson has done what he.has suggested he,would do in an area

suitable for a cert Ain use (retail, industry, etc.) and the dev-

elopment occurs similar to the kind that some developer proposes.

Once that development takes place, there is now-a different en-

vironment in that location. Those performance standards, are they

going to be changed or once an area is declared acceptable for

some use, does.it thereafter remain always.acoeptable for that use

so that we.can have developmenta, b, c, all the,way to development

n, And assume that the same natural criteria exist prior to dev-.

elopment a? When we'talk about Performance standards do we go

in the basis of a certain performance standard which may have been

acceptable for the first one, or two, or three uses in this particular

area, are those the same criteria we should use for the 30th or

40th development proposed for that.area? There has to be some sort

of a plan and it should not be "static" but there has, to, be,some

idea of what ultimately can be allowed in an area.

Dr. Latham commented that-the difference between Mr. Wiener's

comments and Mr. Coopersonts'is similar to comparing a land use

plan and a management plan which.specifies the-criteria that will

be used to make decisions about land use;

Mr. Singleton remarked that we have torecognize.that the

counties and the municipalities have been in the planning and zoning

business for quite some time*and they have done a responsible job.

What the Commission recommends shouldnot be a duplication of

something that has already been done. The appropriate role of the

State intervention is primarily in the area that...concerns more

than one jurisdiction or which [email protected] State problem (such as the.

water supply). We ought to be focusing on that.

Mr. Krapf said that we are creating something on top of

something else. He thought what the Commission was trying to do

was to come up with a simple plan. He sees another piece of

legislation. He thought the Commission was supposed to come up

with a State plan to do away with the rest of the plans and let

the others control through zoning.

Mr. Folsom.exclaimed: "Oh no, you take them all or none!"

Mr. Larson said that Mr. Wiener made agood.suggestion to

make a general statement that we need to think in terms of bringing

together in some kind of plan the,critical land use community

development issues facing the State. This should be done as. a

cooperative effort between State and local governments. The

specific form of plan (or management plan) be left to those who

will come After this Coumission - or possibly with feedback to

it if it remains in existence. Everything the Commission members

have been talking about, Mr. Larson said, insofar as planning at

the State level-is currently in the State Planning Act.

Mr. Bryson commented that there is no question About authority.

It is just a matter of who needs to be involved.to develop a.plan

that e,verybody can use. The Department of Natural Resources can

tell what should not be done in acertain area but it does not

necessarily mean th at it will not be allowed. This works in reverse.

If heavy industry is allowed in an area does not necessarily mean

that it should go there. The local plans have to be considered.

Mr. Krapf does not agree with this concept. He feels that

@there is no reason why the State could not have a plan (coordinating

with existing plans) and have all the plans combined into one.

Mr. Daniello asked Mr Larson in the use of the word "land

use plan", isn't onedefinition-of a."land use plan" a statement

of policy? What is a comprehensive development plan?

Yes, Mr. Larson said, among other things. Right now the

statement of policy, in terms of land use, is being handled by the-,

r. Daniello asked.
subdivisions either count y.or municipality M

Essentially yes, Mr. Larson responded. The Land..Use Com-

mittee has-already adopted some rather-significant land use

policies for the State of Delaware and if the follow through

mechanism works, the planning process, the local governments and
...... 'the Stat;e government,'there will-be '�-ome fundamental changes in'

the plans that we have now.

There will be changes in the county plans because we are

looking for the mechanism for the comprehensive plans that exist

to accept whatever criteria that the State has decided must be there

in order for them (counties and municipalities) to do their plans,

isn't it what you are after, Mr..Daniello asked Mr. Larson.

Mr. Larson replied, well i n the sensethat the S tate should

'come in where there are critical statewide questions to be resolved.

The counties do that now in a very informal way in termsof the

regulatory bodies that may be held in an one of the departments
y@

and through the.TAC groups used when there are some specific. zoning

problems, Mr. Daniello specified. You are suggesting a statement

of policy at the State levelthat ought to be if there is to be any

plan for the State. This statement of policy.must be acceptedby

those who have the authority for a land use plan. This was

Mr. Biondi's original question. Mr. Daniello said he would like to

..offer a general definition of the concept of a State land use

plan. The plan would be an as brief as possible statement of

policy and criteria that the State must havelto carry out their

functions through whatever problems they (meaning counties and

municipalities) might-have. In the area of.standards, for instance,

it would spell out that they would all use the same population

figures; the same employment and unemployment figures, etc.

DTION #1: Chairman Biondi suggested the following motion: ."the

Commissi on approve a recommendation for the creation ofa statewide

comprehensive land use plan which would be developed in a cooper-

ative effort with the full participation of all the departments of

the State government, the counties and municipalities in the State;

which would consist of a statement 'of policy at thestatewidelevel

relating to those Areas which are of statewide concern, either
because they are multi-jurisdictional in nature or they are of

critical concern to the people o.f'the entire State; and which

is not duplicative; and does not contravene the existing

authorities of counties and local governments with respect to

planning". This suggested motion was duly made by Mr. Larson and

seconded by Mr. Wiener. -Mr. Wiener said he supports the motion,

r. TO but he objects to the word "comprehensive". It might cause a
ION #1
@confusion as to what the Commission means,for.example, at the level

of crossroad designation and the other parts of the plan. The word

"comprehensive" is associated with specificity., Mr. Biondi was

asked.to explain the word "contravene". Mr. Biondi replied that it

means the counties would still have the authority to plan through their

existing planning authority: those things that are done on an

almost ad hoc basis and not in any organized fashion (which contri-

.bute to problems in processing plans) would now be done on a

comprehensive basis with all statewideagencies involved in a state-

ment.of policy, done with the counties but not meaning to take away

any authorities that the coun ties currently have. This would be a

sort of a marriage. There are going to be.points of contact where

there will be impositions of authorities.because some authorities come

from the federal government, especially from Mr. Bryson's Department

where there-is no t too much.choice. As I look at the range of problems
that,the Commission memb ers have been talking'about, Mr. Biondi went on,

it does not seem that we,have been talking from a planning point of.view.

we need to look at the planning process by the imposition upon the other

levels of government because there,is always going to be a point of

contact in the practical carrying.out of these plans where you make,

a practical decision to put money in a bond act; to appropriate State

funds; to make improvements. If it is not working together, cooperatively'

it is assumed that someone will resort to the power of the purse.

Mr. Bryson mentioned.an example of an industry wanting to settle

in a particular area where the water supply is in critical shortage.

This would imply that this industry would have to use a water supply

outside their area or maybe outside the-county

M Biondi said that at this point, the Department of Natural.....

Resources would be talking to the county in question that it showed

on its-plan an area for-industrial development where there is a

shortage of water. What we would hope to accomplish with the

State plan would be that it would reflect Mr. Brysonis input

relating to water supply shortage. According to the State statutes,

this industry would have to come to the Department of Natural.

Resources to allocate water resources.

What the word '.'contravene" means is that Mr. Keifer cannot,

tell Mr. Bauer what to do or not to do. What it means is that

Mr.. Keifer (or Mr. Bryson) must sit down with Mr. Bauer and say

here are the reasons why we think you are moving in the wrong

direction, and try and come up with.some . solution to the problem.

Mr. Biondi said that if the State had a plan, as defined in

the discussion above, there might not be too many situations whEare.

people get involved in a regulatory application where they get

kicked" from one place to another. The counties and the State

would work together on what can be done in specific locations and

they would have taken into consideration all the factors. There

would be a coordinative effort.

Mr. Krapf is fearful that what the Commissionmight be

creating is another "monster". Everyone agreed that this is an

area where the Commission will have toexercise extreme caution.

Mr. Daniello said that he would ideally see the time that

upon the approval by a county that has already accepted certain

criteria there would be no need for the regulatory trip to the

particular State agencies, because it has already been approved.

Mr.. Krapf said that he sees where there could be some,problems in

having a state plan and a county plan and a city plan all in effect

that would-contradict each other.

There were no further.questions on-the motion. Mr. Biondi

asked for a vote on the motion as amended by Mr. Wiener. The

motion passeed with one "no" vote.

Mr. Folsom said that- the Commission-has,taken care of by the
above motion the long range planning. There is an immediacy for
short range planning that.occurs at budget time. He would like to

see the Commission make some-sort of a proposal that either-the

State Planning Office, by itself or-in Conjunction with the other.,

planning groups of,the State, municipalities and counties, review

the various capital budgets and give-a,report as to more or less.

what those budgets will support coordinately and where they, are.

out of phase and will not support. This is a key problem that the

State-is not putting money where the county is putting money for

development. This would give everyone &short range picture each

'year to-see dynamically whether or not the,plan is where the money is.

Mr. Daniello said,that there,would also have to be, some'

mechanism for those subdivisions that have capital budgets to be
willing to submit.their capital programs so they can be reviewed as

an impact to the-State capital budget.

Mr. Folsom.said, certainly. All he-is asking is that a report

be made of all the capital budgets. of all. the. jurisdictions. in-

Delaware, including the State's, and howthese capital budgets
relate to, the support of this State plan, as now being defined.

Mr. Webb commented that there is, a,problem with this coordin-

ative ,effort called "politicians". Mr. Webb believes that the

suggestionmade by Mr. Folsom is brilliant. One of the weaknesses

of the.State is that the counties' governments do not necessarily
come to the Legislators for their needs. The way things work now

is the State gives too much advantage to the individual legislator

who tries to get done everything.he can for his own area without

giving thought or consideration to the total State. The legisla-

tors-waste a lot of taxpayers' money because they put in the bond

bill projects that have no-,business being there.,

Mr. Larson made a motion which was seconded.by Mr. Wiener

that: "the State Planning Office be urged, dt the earliest possible

time, to'develop a. composite capital improvements program,of the

State municipal.and county governments. in the State; to present

that composite program to the governments,and to this Commission.

(the Delaware Tomorrow Commission) - if it is still in existence

to those items relating to the plan."

Mr. Folsom said that we should only be interested in.those

projects that impact the plan; sewers, roads, etc.

Mr. Wiener suggested that Mr. Larson does not specify the

State Planning Office as being the agency to-do this composite.

Mr. Wiener explained that it may be that a commission might be,

given the charg Ie to do this composite. Mr. Larson responded he

has no objection to this, but he mentioned that the State.Planning

Office is in existence, the Commission that Mr..Wiener speaks of,

is not. At this point, Mr. Biondi sugge sted that the motion read
ICION #2:as follows: "The Statewide plan include (as a part of the plan) an
on-going comparative analysis of capital funding at the State and

local levels which impacts on the plan." This was made as a new

motion and was duly seconded., Mr, O'Donnell said that he may be

speaking out of line for his Director, but he hopes that this job

will be to such an extent that the New Castle County Department of

Planning would assist the State in preparing this composite or analysis.

Mr. Larson said that it is indispensable that there be a close

coordination between the State and the counties because, at times,

there is withholding of information.

Mr. Thorp had a question on the motion with regard to timing.

To some extent, before a budget is.passed,.it would be nice toknow

how it is matched in. On.the other hand, if the budget onthebond

bill is.not decided until late in the first session ...

Mr. Folsom answered that the ideal thing would-be..that the

whole comprehensive or coordinated budgets.be compiled prior to

passing. That is impractical. What we are looking for is a

gauge of how well we are doing in support of this.plan and.it is,

just as effective.to us until we learn how to use it.whether it

happens in July, August, or September. It would be ideal if we

could prepare this before the budget preparation. Mr.,Bryson noted

that the State agencies will besubmitting theirbudget requests

next month any way.,

There was no further discussion on the motion and it passed,

unanimously.
Mr. Walton said that, on page 6 of the Land Use Committee

Report of April 1, under "Transportation Policies'! The problem
of water supply brought up by Mr. Bryson i*s also true of the land
use; when one runs out of natural resources, one runs out. Delaware
is going,to run out of land just as New Jersey is Inow. Delaware's

present position is that of New Je rsey twenty years ago. If this

Commission is going to look at Delaware tomorrow, it will have to

look at the way it uses itsland. New highway construction uses
much land. It changes the land use patterns. The,State of
Delaware should have a policy to use the right-of-way available

to the full practical extent before buying new land. There are

some legislators with a lot of influence who can get a road

dualized in the middle of nowhere, but if it is State policy to

develop the existing right-of-ways without buying new land for new

construction, this would stop this practice. A good example were

the improvements made in Dover on.Route 13: full use of,the

existing right-of-ways was made.. Mayor Carrollremarked that the

improvements wore made ten years too late. Mr. Walton made the

following motion: "the Commission approve a transportation policy

which would require the development of existing right-of-ways to

the maximum extent consistent with current planning before

purchasing additional right-of-way." Mr. Walton said that he will

accept the advice of the engineers.on this issue. If the engineers

say that this corridor cannot handle any more traffic no matter how

it-is improved, then all has been done that can be done; but until
the experts say that the corridor cannotbe.used, the.right-of-ways

should be used.

Secretary,Hall gave an example of the Division of Highways.

having plan for a limited access highway from Stanton.acrossthe

marsh and leading out toward Route,13. It was obvious to Secretary

Hall, at the time, that it was impractical; it was tremendously

expensive; and there were historicalsites that would have.to be

dealt with. Secretary Hall recommended that the project be abandoned;

and to plan to, dualize Route 7. There are no shoulders on Route 7..
There. is no excess land there. This Route will have to be,widened

and dualized.'.Is this what Mr. Walton is.talking about? This is

an example, Mr. Walton said, of what the State policy should be.

Mr. Wiener suggested that instead of"within existing

right-of-ways" the word "corridor"..be sub,stituted for "right-of-,

ways"...It was finally agreed to use the word "location".. The.

ION #3anotion should read: "The Commission approve a transportation.

policyVhich would maximize the utilization of existingroad
locations." The motion,, as.reworded, was duly made and seconded..

The motion passed with.Secretary Hall and Senator Berndt voting no.

Senator Berndt remarked that in his area, for example, the,

Concord Pike is fully utilized. Then., if it not feasible, additional

land is required but whenever feasibleand available the,right-
of-ways should be used, Senator Berndt was told. In this case,

Senator Berndt approved the motion and changed his vote from no to

yes. Mr. Wiener asked.if.the motion just made would eliminate the

need forany further consideration of.item 4, on page 5, ."Delaware

should adopt uniform minimum statewide'land development standards"

and item D. "Jurisdictional Arrangements" on pages..8 and,9. Mr.,Wiener,

was told yes; and it also covers,paragraph 1, on page 1, of the

addenda paper of May 15 and paragraph.2 on pages 2 and 3, of 'the

addenda of May 15.

It was moved to take a dinner break of about one half hour

and when the Commission resumes business, the Report of the

Economic Development Committee be considered and the coa.stal,zone

issue be examined concurrently with the Land,Use Committee Report

and the Economic Development Committee Report.

The Commission reconvened and considered the Economic Dev-

elopment.Committee Report (referring to the latest document,,

printed on both sides and dated June.26,,,1975) It is presented in

a form of a summary; after the summary, are Parts I, II, III,.IV,

and V.

Mr. Thompson asked that themembers consider the parts first,

then go back to the summary to see if the summary reflects what was

said in each.part.
Parts I through IV are essentially what has been reviewed

by the Commission before. There is one change in Part IV, which

has to do with the railroad.. It is a more explicit recommendation.

This issue has to be acted upon by the Commission bec ause the
decision is going to be taken in Washington later on this month.
Part V@ is new,'and deals with the question of income tax, capital

gain taxes, and the coastal zone and offshore oil question. It is

in Part V that the Committee reconciled its deferring views. These

are the issues that contribut ed in creating an anti-business picture

and that created problems to the business,lea,ders and the State

leaders. The Committee has presented the problems to the Commission

but no solutions were recommended by the Committee. The Committee

does not know what the answers are to the income tax and@capital

gain rates. It may well be that when these questions are
-examined by a broad spectrum and qualified group in the State, it.

may be found that it has become counter productive; that we will be

losing more revenue as a result of where we are on the income tax and

capital gains than we are in fact generating over time. The other issue,

the coastal zone, the Committee felt it understood it@better and it was

a temporary action that was taken in 1971 to remedy to a particular

situation and that-the State is ready to move toward statewide

planning and that the coastal zone act 'Should be discontinued... With.a

statewide plan and the disappearance of the coastal zone law, Delaware's.

image statewide and-on the national scene would disappear.
Starting with Part I (on page 13, of the new summary); this

is identical material to what the Commission has reviewed before

except fora few changes in the-language. Therewas some disagreement

between certain members of the Ec',onomic Development Committee, but

after a meeting,.the Committee arrived at a total agreement and the

summary report is the product of this agreement.

Mr. Wiener asked whether the.Commission is going to "lock in"

on the population figure of 697,600 rather than a general range.

Mr. Thompson said that it is an approximate figure on the high range.

The population figure is not an.important factor. The-number of

people who will enter the labor-force within the next ten years is,

what is important. We should acknowledge the fact that there are no

two figures on the populat'
ion estimates that:are in agreement in the

State, Mr. Wiener commented.

@.This figure*of 697,600 is the Planning Office's estimate.

It is the lowest figure used in this area. The other studies

that are being made are coming down to that figure. An approx-

imate figure should be used rather than such exactitude. A motion

'ION Y/4:was made and seconded "to use a population f igure of 700, 000.

The motion was carried with the exception of Mr. Krapf who voted

no'. There were no other changes in Part I.

Part II (on page 19) was then considered. Mr. Biondi

suggested a change in the wording in paragr.aph .1, to read:

.ON #5: (tD a low llth in 1970) but has recovered to fourth in the nation

in calendar 1973." Dr. Latham suggested that the calendar year

1974 position be mentioned. Mr. Biondi asked Dr. Latham to let

,him know the figure for 1974 when he gets them. A motion was duly

made and seconded to change the wording in the above mentioned

paragraph. The motion passed unanimously.

In item 2, on page 19, Mr. Biondi suggested to substitute

the second sentence by: "Delaware,ranked tenth in the nation in

fiscal year 1972 and dropped to fifteenth in thenation in fiscal

year 1973." Mr. Thompson said that a different,i,ssue would be

raised by this change. The point that was made was Delaware.was

way down in the 1950's but it no longer is.,.Mr. Biondi said "and

we are in the positions I stated, right?." Essentially yes, Mr.
Thompson replied. But the only point made was,that the De.laware,'s

position of the 50's has changed.

Mr. Daniello suggested a change in the first sentence of

the same item that would affect.Mr. Biondi's suggested change, to

read: per capita as most other states."

Mr. Thompson said that the Committee meant to compare only

with.the surrounding states. Mr. Thorn asked whether the Commission

.should get the impression that..in comparison to the neighboring

states, Delaware's taxes are low? Mr. Thompson said no, compared

to the neighboring states, Delaware's tax burden per capital is

means is
comparable but what Mr. Daniello that we should not

comp are ourselves-only to the neighboring states but with all the

states. As soon as Pelaware makes such statements, Mr. Daniello

said,.we are putting ourselves,down compared to our neighbors. A

question was asked ds'to what was meant by item 2 on page.19..

Mt.*-Thompson explained that at the outset Delaware has lost its,
low tax position compared to the 195,0's when Delaware was attractive

because of the lower tax burden. Mr. Thompson said that this comp-1
arison made between the 10's may be construed as political motivation.

A motion was made b y Mr. Krapf, seconded by Mr. Daniello

21#6: to change the first.sentence of item 2, to read: "The combined

State and local,government taxes in Delaware now are as high per
.capita as most other states." The secondsentence remains, as is..

The motion passed unanimously.

There were no further comments or questions on Part II,

therefore Chairman Biondi went'on to,Part,III.

Mr. Daniello, to be consistent with his.last statement,.
.suggested that any reference to the7mid-Atlantic region" in
Part III title. and reference tolthe "local" regional comparison

of Delaware be struck because he strongly felt that Delaware's,

position in competition cannot be regionalized. Delaware is

competing with states that-are not in the mid-Atlantic region.

.10N#7: Mr. Daniello made a motion that "the words 'in the mid-

Atlantic region' be taken out of Part,III's title." The motion

was duly seconded and was carried.. It was further decided that

any reference to "mid-Atlantic region" within the body of Part III

be struck.

Mr. Folsom.mentioned item 6, on page 25. He felt that this

statement means that the State encourages inefficiency by rewarding

the small, non-viable municipalities. Mr. Krapf said no. The

intent was that if industrial development takes place in one county

of Delaware, not only the county government and the school district

should benefit from the property taxes, but since many State factors

will be involved in having that industry located there, then the

State should get some of the tax revenue. Mr. Krapf was emphatic

on this interpretation.

Mr. Thompson explained that as an example, let's take

Delaware City which has a very heavy industrial complex and very

high propertytaxes being generated for such a small municipality.

We should look at this basis of sharing that.on a wider basis

within the State.

Mr. Daniello commented that if we are going to talk about,
a land use plan, and we try to direct industry in some location

and eliminate competition in our own localities for the industry in

terms of competition, there is got to:be a way of fair sharing the.

revenue.. There is got to be a revenue sharing formula of property

taxes generated from commercial and industrial among the commun-

ities that generate it and the communities that suffer because it

is generated.

Mr. Conaway said that there is one side that the Commission

is ignoring which is the municipality or the county has to provide

services to that particular industry.. Are we going to say that

everyone sharing in the@property taxes will also have to.share in

the cost of the services of that industry? It is the only fair
.way to do'it. This would probably affect Sussex County more than

anyone else since Sussex, Coun ty would get more revenue down than

would come up. It would not be fair for the County not to pay for

those.-services. Mr. Conaway said*he would be against that completely.

Mr. Thompson said that the.Committee was,not trying to solve a

problem but to raise one.. There are inequities in school districts,

there ought to be some way to equalize this when a particular unit

of government does not profit unduly because industry is located

there. Mr. Folsom suggested that this item be. worded as follows:.

'.'the State.should study a reven .ue-sharing formula for commercial-

industrial taxes and charges, so that all jurisdictions of our.

small State will share in these fees proportionate to the service.

that they provide.". The motion was seconded by Mr. Krapf, Mr.
Daniello suggested that the.motion be amended to read: ."the State

should study ... our small State will share equitably from these,

revenues."

Mayor Carroll commented,that this would eliminate competition

as far as enticing people into a community. If money is shifted to

support inefficiency, he can in no way support this motion. If

a community cannot afford to support industry, then, it should not

accept industry in its area in the first place.

Mr., Schranck remar ked that the federal government's method

of gathering statistics has changed. The.Department of Labor now

gathers information on employment as-the place,.of residence of the

worker. When the formula is developed, the Department of Labor takes

the place of residence to determine wh at a particular area is going

to get. So,, what the Report says in.item.6, is already being done.

Mr. Wiener recapitulated by saying what the Report.is trying to

recommend is for the State to study a revenue.formula. This cannot

be done at this time. The cost of services should be taken into

consideration (this is what Mayor Carroll was saying). We are

saying that the jurisdictions of the State will share the taxes

equitably. In certain cases, we will have to subsidize an inefficient

operation. In the case of communities with mostly residential,

they will not want to share the burdens of air pollution, services

and other responsibilities. What we are looking for.is those

communities that are not able to attract industry because of

ecological or.environmental reasons, and that have.a low income

level, they not be penalized. We have to look at both sides of,

the coin. What the Committee is suggesting is to study the matter

and may.be we will find that an equitable formula is not feasible.

Mr. Daniello said that he does agree with Mr. Wiener that a study

should be developed to prevent a company to "jump across" a line

and to leave a.particular area sometime unnecessarily because the

county says it wants the-property taxes; and yet all the human

services are still there. Mayor Carroll said that this would

encourage even more "jumping" because industry would go to another

area,where they can 11get away" with more. Mr. Wiener said that this

is where the study'.will develop a formula to avoid both. Mr. Conaway

saw the same problems in the school districts when he was involved

in education.. This is opening.a Pandora's box. Let us take the

example of the beach areas. On ce.-we start sharing industrial and

commercial property, why not condominiums? We are going to end

up with property taxes all across the State. Mr..Biondi asked for
)N#8: a mIotion, which-Mr. Thompson,made:- "6. The State should study a

revenue i@hdring formula for commercial-industrial revenue so that

,all jurisdictions of our small State will share in the revenue
equitably." The 'motion was seconded by Mr. Wiener. It passed

with two no votes.

E #9: A motion wag duly-made and seconded "to insert the word

Itransportation' in item 7., after the words 'sewer systems!"

The motion passed unanimously.

Moving on to Part IV, Mr. Spencer explained that what

Delaware has presently is good east-wes,t rail service but very

poor north-south transportation both in terms of rail structure

and traffic service., Mr. Thompson emphasized what is mostly

needed is better service. For instance, when duPont-Co. wants,to

ship from Delaware toward North or South Carolina, the freight goes

all the way to St. Louis, Missouri, and back rather than south

because of the rate system, because of the different railroad -companies

serving. The rates would not be better but what is needed is a

direct north-south route so as to save 'time. This will be considered

in Washington later on this month, between Conrail and the Southern

System and the federal government. It was felt if the Committee

supports some such policy (paragraph 2 of Section 1, of Part IV)

on this issue; make contacts with the Delaware Delegation in

getting our Congressmen to move the Interstate Commerce Commission

to make the necessary modifications,in the rate structure, it would

be beneficial...

Mr. Biondi suggested the use of the word "support".instead

of "adopt", because the State cannot adopt such a plan. Mr. Wiener

'ION#10:made a motion that was duly seconded that "the Commission adopt

the position proposed by the Economic Development Committee with

the inclusion of the amendment stated above." The motion carried

unanimously.
IION#11: A motion was made and seconded that "the Secretary,of the

Department of Highways and Transportation be requested to forward

this statement of policy made by the Delaware Tomorrow C ommission

to the relevant federal officials dealing with the problem of:the

Southern acquirement of the railroad and the rate problem.and that.

it be also sent to our Congressional Delegation and to the Delmarva

Advisory Council." The motion was approved unanimously.

The full question.of transportation, Mr. Thompson said, is

a very complex issue and could be argued. The problem of theeast-

west corridor and the passenger rail service is a problem which

might be answered in the resolution..that was,just made by the

Commission.

Part V was then co nsidered. In the second.paragraph of.

this part, the problems should be better specified than just

speaking of the State's personal income tax and capital gains

tax rate. This is a repeti tion of an over simplification of the

State income tax. It'is too simplistic. Specific figures should

be entered in this paragraph. Personal income tax rates are at

their highest (19.8%) and there is no limit on the taxes on earned

income and the capital gain'tax rate, This is.where the problem

is.; it is not in the whole structure pf the State personal income
tax. A motion was duly.made-and.seconded thatthe first sentence

ON#12:of paragraph 2, of Part Wread as follows: "The core of this.

controversy'revolves around the upper limit of the'State.'s

personal income tax rate at 19.8%; the lack of a ceiling on earned

income; and the 100% capital gains tax." The motion passed

unanimously. The second.sentence in..that paragraph becomes counter-

productive.

Mr@ Biondi suggested thatan item (c) be added to (a) and
(b) of paragraph 2, to reflect that these factors have,an adverse. impact
upon people.thinking about establishing major corporate headquarters

or regional offices in, the State, as stipulated in Mr. Richard Both'.s
letter to Mr. Thompson of May 27,.1975.. These are not the only
factors that discourage corporation headquarters. to settle in,

Delaware, but if we are considering.points (a) and (b) without

bringing out.this third matter, it is incomple.te.

Mr. Thompson said-that his committee was not just look ing
for the kind.of activity that will provide employment for the

unemployed and the underemployed in the State.,.The Committee was

not just looking for corporate headquarters to move into Delaware,

they were concerned about the total image of anti-business. It

was felt that the letters presented as exhibits in the Economic

Development Committee Report were not representative of the true

industrial picture. These letters only reflect the interest of the

highly paid personnel not the average income workers. Mr. Wiener

said we should look after the interest of the latter as, well.
Item 2, on page 31, reflects the highly, paid.brackett. (over $30,00.0)
and this is why this factor impacts the corporate headquarters and

concernsthe executive positions.

Mr. Daniello said that the decision making process for a

branch plant to be located in Delaware is being made by corporate

leaders and those leaders are affecting the location of the branch

plant just as much as they ar e affecting the location of corporate

headquarters.

Itwas proposed that item (c) be added, in the second parag-

raph, on page 30, "these taxes,have a particularly adverse impact

on the location of corporate headquarters,and major regional 'field

offices in,Delaware."

Mr. Daniello suggested to amend this suggestion. It should

,be mentioned that this has an adverse effect on locating industry

in the State.

Let us say that Corporation A President in New York wishes

to move a plant in Delaware. He converses,with the President of

Corporation B established in Delaware. Corporation B suggests to

Corporation A not to establish in Delaware because the Executives

(in the above $30,000 income brackett) will be taxed a high rate.

What the State is looking for is a good diversity of

industry. We should stop emphasizing.the.corporate headquarters
and the regional fi eld offices'.

A moti-on was made by Mr... Thompson and seconded by Mr. Daniello

ON#13:that "the following sentence be inserted as'the first part of (b):

high personal income tax rates are a serious detriment to the

location of new business in Delaware." The motion passed unanimously.

Going on'to the bottom of page 30,.item (a), Mrs. Slights.

commented that she is not sure that.proof has been presented, to

justify the Coastal Zone Act1s responsible for the anti-industry

image in Delaware. She was told that it is not the Act.but the

controversy over the Act that does. It cannot be denied,that a

debate over the Ac.t.has been going,on in the State for the last

two years. Some believe it is good, some believe it is bad.

Mr. Daniello specified that there is no question that the 'controv-
ersy over the Coastal Zone Act has caused, some problems in terms of.

economic development. The Coastal Zone Act has not had an adverse,

effect on industry.locating here, but the controversy has.

'Mr. Bryson said that we are not saying that the Coastal Zone Act has

been responsible for everything thathas been attributed to it, but

the controversy and the permit system has been.to Delaware.

Mrs. Slights said.that she would like to see the point

explained that.the Act is not contributive to. the bad image, only

the controversy is. So many times during the controversy our

industry image has been blamed on the Coastal Zone Act that the
statement alone w.ill'be construed to mean that
Mr. Biondi suggested the sentence to read: "The controversy

over the present Coastal Zone Act has been reflecting in a continuing

debate inthe State which has contributed to an anti-business image."

Mr. B ryson said that at the time the Coastal Zone Act was
drafted (two versions of the Act were. made), it was not the intention
of the sponsors, the Governor, or anyone involved for this law.to

be the final answer to our problems in the coastal zone. The

State had an immediate problem and a temporary solution had to be

found. Wi th all the publicity it got, it turned out to be a great

bill and it was not intended to be a great bill. It was meant to

be a land use and planning concept to protect our coastal zone.

It went too far in its overal 1 intent. We suffered somewhat in

attracting industry and in our imagein an area where we should

not have lost it (Get ty and DeGussa, for instance). A land use.

plan will let alot of people have an input as to where thing;will

go.

What about the recommendation of the-Land Use.Committee whereby
the Committee support the recommendation of the Delaware Society

of Professional Eng ineers (page 4 on the addenda report of May 15)

Mr. Biondi asked? The statewide land use management plan would

supersede the Coastal Zone Actand other land use legislation

presently administered by the State.

Mrs. Slights made a motion that. "the Commission adopt the

recommendation, as outlined in the addenda report of the Land Use

Committee Report in lieu of item (1) of the Economic Development

Committee Report." The motion was.duly seconded.

Mr. Krapf felt that the way the Economic Development Committee

worded that particular issue is a lot better than.the recommend-

ation of the Land Use Committee Report.

Mr. Biondi specified.that what he was proposing earlier,

was that the Commission take the statement from the Economic

Development Committee Report (Item .(I), on page 31), then add to

it the recommendation from the Land Use Committee Addenda Report

of May 15, on page 4, item-(3), starting at "the present regul-

ations should be used intact, as.interim guidelines, to govern

development in theCoastal Zone until the-new land use management

plan and regulations are complete and enacted. At that time, the.

comprehensive statewide land use management plan would supersede

the cu-trent-Coastal Zone Act and other land use control legislation

presently administered by the State." This would make up a more

detailed statement.

Mrs. Slights mentioned that the Land Use Committee Report is
in agreement with the Professional Engineers. She felt 'that the

sentence "the Committee has concluded,that the time has come to

replace the initial Coastal Zone Act with a comprehensive state-.

wide land use planning.act" was not needed. Mr. Biondi assured

her that no one implied an interim period.where there would be.

no regulation. This is why Mr. Biondi proposed the two statements

juxtaposed. Mr Cooperson commented-that in response to.Mrs. Slights'

comment, he wants to go on record as understanding her position on.

this issue and.his position on the matter is similar to,hers.

What Mr. Biondi suggested is that the present regulation,be used
as is until such a time there is a. proper legislation to tak e the

place-of the Coastal Zone.Act.

IOTION #14 A final motion was duly made and seconded that the second

paragraph of item (1). on page 31, of the Economic Development

Committee Report read as follows: "This bill was passed in lieu

of a more complex Coastal Zone Actwhich had been proposed

earlier but r eceived little support. In reality both bills were,

an attempt to being land use planning at the State level. The

Committee has concluded that the time has come to replace the

initial Coastal Zone Act with a comprehensive statewide land

use planning act. The present regulations should be used intact,

as interim guidelines, to govern development in the Coastal Zone

until the new.land use management plan and regulations are complete

and enacted. At that time the,comprehensive statewide land use

management plan-would supersede the current Coastal Zone Act and

.other land use control legislation presently administered by

the State."

,Question on the motion: Mr. Folsom asked if this meant that,

after the statewide land use plan is adopted the Coastal Zone Act

would no longer ex ist. He was told that this was a recommendation

on which the General Assembly would have to act and that the

plan would also have to include regulations. The motion passed

with two "no" votes.

Mr. Wiener said that the Commission passed a motion that

we want to see the land use plan undertaken. Apparently, the

Professional Engineers' Report talked about three years to.do

this report. Mr. Wiener felt that three years is excessive. If

43-

there is nothing in the motion passed earlierimplying the need for

rapid consideration in light of our concern of our economic

development,we should reopen that question and add on to the

motion regarding the time urgency required for the adoption of

a state plan to.act with the necessary guidelines not only for

the coastal zone but the critical areas management and all the

other needs that exist. If the Professional Engineers think that

they are going to get a long term contract out of this report,

we should desillusion them. This plan should be done before the

end of next year.

Mr. Larson said that his Committee did not agree with the

time nece.ssary to prepare this plan. The Committee.did not

accept the notion that it would take three years to.do; and it

.did not accept that it would necessitate an Act of the Legislature

to get it started. Obviously, if it takes an act of the Legislature

we will not get the plan started this year. So an Executive Order

or even the existing enabling legislation under the State Planning

Office Act, could get this plan started as soon as possible. -.The
State.Planner, in his letter'of May 9, said that he could produce
a State plan by June.30, 1976. Mr.. Bryson was-fearful that the time

span might be too short, for his Department to give the necessary

input. If the Commission determines that we should move forward

with the plan and something evolves,from the federal energy policy

which at the moment is iry a total vacuum, Senator@Berndt said that

he will move toward doing what is.the right thing for the people

of Delaware and will try to get the energy necessary into the

Valley.

Mr. Biondi noted that what Senator Berndt will do as a

Legislator is, of course, entirely up to him, but what is needed

here is a total point of view of the who le State. It was felt

that what the Senator was trying to express was a sense of urgency.

What the Commission needs to do is to issue some sort of a rec-

ommendation with respect to the initiation of such.a plan; when

it ought to be initiated; and thefeasible expectation to get it

done.Senator Berndt said that the State Planning Office, last year,

received a grant from the federal government of about one half

million dollars to do coastal zone management. What has been done

with that money? More money was just,allocated to the State

Planning Office from the same source. Where does all.that money

go, Senator Berndt asked?

Well, Mr. Biondi said, let's ask the State Planner, he is

right here.

Mr. Keifer replied that it was based on the amoun t of money

that the Planning Office is getting that we could get this state-

wide plan done in one more year rather than the three years of

@.the program. The Planning Office just'finished the first of the

three years.. In my letter of May 9, Mr. Keifer went on, when I

said that the Planning Office could come up with a prelimin.ary

plan by the end of another fiscal year, I.based that on my

assessment of the status of progress ofthe New Castle County 208

Program, this program is critical input to the process; the fact

that Sussex County in the eastern shore is just getting started

in the 208 Program; and hoping that we would fit all the pieces

.into a coherent program. However, I do not see, Mr. Keifer said,

how we can get all of this done andcoordinated in less. than twelve

months.

Mr. Conaway commented that it is significant-that this

group has been looking toward a:statewide plan toward land use and

the only State-attempted land use management is probably the most.

controversial act that has ever been done in the State. I am

wondering, Mr. Conaway went on, what would have happened if the

Senator (Berndt) had not voted for the Coastal Zone Act in 1971

.and Sussex County was still in charge of its coastline and New
Castl,e County could do what it please with the.Delaware River.
I don't believe that.We would be.sitting here and worrying about

industry. I belL.eve.the same thing will happen when the State

!come-s up with this p1an.

..Another issue that Senator Berndt brought up is the legis-

lation that passed the.House regarding the storage of oil. If a

man wants to build aplant, he can borrow the money in Delaware

to build this plant; but he cannot borrow money here to build

storage tanks. There is a severe gas shortage in Delaware. We

should be building storage tank areas some place to get the gas

@necessary in this State,but we cannot lend money to get this done.
There. is a feeling all over. the State that refuses anything that

has to do with oil and.gas and(energy and industry.

Mr. Thorn made a few remarks as to the time table. The.land

_use plan is a good idea, but neither money norwishes will give us

an ideal program. I believe that we should give a lot of credence

to what Dave Keifer has to say. -If he thinks that it takes a

year, it is very important that this statewide plan be very

carefully thought out. If it can be done by the exp-erts in the

time said,. fine, but the State Planner should not be pressured unduly.

Mr..Bryson mentioned that Dave (Keifer) said a,preliminary

plan. He wants to caution the Commission that he does,not have

the manpower to provide the input necessary and keep up with

the other functions of his Department. I can't see, Mr. Bryson

said, getting a preliminary plan done.in less than'one year, may

be eighteen months.

It was the general consensus that at the@time of the Coastal

Zone Act passage, it was understood that the Act was an interim,

measure until the publication of a state plan; nothing has been

done since then; and now it is imperative tha.t a plan be developed.

Mr. Wiener mentioned that another urgent issue is that of

gas and oil exploration and development off the shores of Delaware

and their impact on the coastal zone area. We should plan very

quickly or things will just happen to Delaware that we will be

sorry for. The sense of urgency is not only correct but also

might prevent chaos that might happen along the coastal area. We

are faced with the fact that the federal government is going to

be moving. Mt. Webb mentioned th at the federal government has

already postponed the recent.schedule,for themid-Atlantic

coastal states, (New Jersey, Delaware, Maryland, New York, and

Virginia) from December 1975 until June 1976. It is'.likely that

it will be pos.tponed until after the 19,76 Elections; In other

words, Delawar e canfit its plan within.that time-frame.

Mr. Walton wished to make a few remarks about the Economic

Development,Committee Report. He felt that the figures, projec-

tions, and statistics that the federal government has given

should not be taken seriously (some of the figures were 80% off).

When we can prove what the federal government advances then we

will know otherwise. We have a report that is highly one-sided

(the Economic Development Committee Repo rt). He believes

what is written in theletters (Exhibits), but if we are basing

our arguments-oh sound principles,,then the other areas of

industry should have been solicited. Why wasn't the "other

side",such as the conservationists contacted to bring their input

on what they felt the economic pressures.were? This represents

an economicsolicitation from one side.. Mr. Biondi said that he has

not been impressed by the letters.either..,The.only letter that

presented a balanced view is the letter from Mr. Richard Both,

of Hercules. 'The remaining letters reflect what thewriters

were solicited to say. If we wish.to have an exact opinion from

the industrial leaders, this, is the way the industrial leaders

think. Just for that reason, theletters are significant.

Mr. Walton said that the viewpoint of the industrial leaders

.,is not representative of what is being voted on and said by the

Commission. Mrs. Slights -said thatshe disagrees with Mr. Wiener
who said earlier that we ought to develop abroad land use plan
quickly; at the same time we are incorporating thi's recommend-

ation with the land use plan that the Land Use Commission has

adopted which says that this plan is going to superse'de all the

other plans that are already in existence. She does not believe

that a broad base land use.plan.for the State.is going to be enough.
to allow to drop the existing legislation, We have got to have

more than a broad base or else she will withdraw her s Iupport of

the previous recommendation to ado pt a land use plan to supersede

these existing legislation. Mrs. Slights suggested that the experts

be asked.what they think a reasonableamount of time is.to

prepare a well-.thought plan.

Mr. Larson said.that given the constraints.of budgets, staffs,

etc., I believe that Dave's (Keifer) projections are reasonable.

It does not mean to say that less time could not be taken if the

money.,. the people arethere. But more critical than just th e

technicians are the conclusions of the.leadership of this State,

through this Commission; what the implementation tools are. Shall

we go to performance standards;.if we go to performance standards,

what will they be? These are the.que,stions that should be resolved

by the leaders to allow the technicians to get to work. This should

be done quickly. The time will determine what you put into it.

Mr. Weiner said that he had hoped he had not conveyed the.

notion that the work be done in a 'sloppy" way or simply be a

"hit and miss" plan. I believe that no technicians can capably

deal with the substantive detailed, issues.unless the broad policy

guidelines are developed in a clear fashion. At that point, simply
the application of manpower and the background data can be brought

to bear and to come up with a meaningful plan. The urgency is

that the Governor set up a body which will begin to deal with the

kind of problems we are talking about immediately. I did not

intend to imply that it is got to be a "signed off" plan, Mr. Wiener

said... The major debate is where we want to go. This can be done.

at this.Commission level. The kind of motion we made earlier

is the kind that we should urge the Governor to act on tomorrow.

The fact remains that if we do not have this sense of urgency

then it will drag again.

Mr. Cooperson said he agrees with,Mr. Wiener that the state

of urgency exists, but he cautions everyone that the kind or urgency

implied by Senator Berndt is out of place and it is why a year

was lost because if this sense of urgency had been put into a

thoughtful plan a year ago instead of the intent to throw another

piece of legislation and put it through a political circus.the

way the last one was conducted,. is not going to get us anywhere.

There is nothing to be gained by getting a new.law together.
Senator Berndt asked if anyone knew where the,coastal zone

is. There are areas that are not in the coastal zone that should

be and vice-versa. Dutch Creek all the way to Smyrna should have

been included in the coastal zone, for instance. Odessa.should.

be included in the coastal zone.

Mr. Biondi suggested a motion be made that a statewideland

use plan be prepared and be ready for enactment by May,l, 1976,

(which is a month beforethe federal government is going to lease

places and three years before anyone will drill). Mr. Biondi said

that he gets the general impression that there is much,federal.

money floating around in the coastal zone management and,other

areas and, it requires some grantsmanship to allocate this money

to get the job done. Mr..Folsom suggested a modification.to

Mr-. Biondi's propose .dmotion to read that the. money necessary to

produce that plat be sought and@pol,icy discussionsbe started within
two weeks.'.Mr. Bryson said that he does not wish to hold up the

progress of this projecti but given his manpower, he cannot give a

meaningful participation to this plan-in that time span.(SEE INSERT)
Mr. Keifer said that he got $250,000 from the federal

gove rnment last year.

At this point, Senator Berndt wished to change his. vote

from a "no" to a "yes" on the previous motion dealing with

item (1), page 31, of the Report of the Economic Development

Committee. Mrs. Slights wanted to know whether the Commission was

going to consider the last sentence of item (3) of the Addenda

Report of May 15, of the Land Use Committee Report. Mr. Biondi

replied if Mrs. Slights wished to,.the Commission would.

In relation to the Economic Development Committee Report in.

general where there were significant changes in the new draft

from the original, were the changes based in large part on the

exhibits that came with this report?. Parts I, II, III, and IV

were unchanged and are not related to the subject of the letters.

Was Part V rewritten on the basis of the Exhibits? Mr. Thompson

replied no; the letter just show specific evidence from business

leaders indicating the nature of the problem in the industry and

economy of Delaware. Who solicited thes.e attachments, Mrs. Slights

asked? Mr. Krapf said he did, within an assignment by Mr. Thompson

who appointed a subcommittee for this purpose. Mr. Krapf was a

member of that subcommittee.

The Commission has debate d not only policies, not only sections,

but paragraphs,, lines, and words in this report, and this Commission
has tested the substantive value of what has been argued, Mr.. Biondi
said. Our obligation here is to discuss the probl ems on their
merits and test eachother's ideas across the table and see if these

5 OA

(INSERT)

ION #lA: A motion was duly made and seconded that "the Commission

recommend that a statewide land use plan be developed by May 1,

1976;, that the funding sources necessary to carry put the effort

be ident ified and sought to whatever levels of governments they

are available from; and that within.the next month planning

mechanisms be established as to how.thi.s is going to take place

procedurally and as to who will be involved in cooperative efforts, and

how it is going to get done. The Governor should take thelead

to do this." The motion passed unanimously.

ideas are valid and try to persuade each other.

Part V, Mr. Thompson said, is a fair representation of

the views of the Economic Development Committee. The whole

Committee was not in attendance at any one meeting, but during

the series of meetings that we.had, I think we had a fair rep-

resentation of the Committee.

Item (2), on page 31, of the Economic Development Committee

Report was then considered. Mr. Biondi suggested to add a

separate section (e) to state that an additional objective should

be a candid assessment of the position of business.and industry

in the State with respect to taxes as compared to other states and

consider ing the fact that the corporate franchise tax is a tax

which we export largely. Such a study ought to indicate just

where we are with respect to taxation of business and industry.

If for example, it is determined that we should reduce

the income tax atthe highest level, we will lose a given.amount

of revenue from that; and if it is.determined that we will slice

thecapital gains tax, the State will lose revenue from that. In

determining where that revenue should be made up, we should not

only see where we are in taxation of individuals and consumers,

but we should look at where we are with respect of business and

industry. Frankly, the reports which have been used by industrial

leaders including the corporation franchise tax which is exported,

not paid by local industry, are not representative of what the

true tax burden on business.is. In fact, we are compared favorably.

Mr. Biondi would not want.to see a tax study made to go up on the

idea where we are going to replace the revenue we are going to

lose from changing these taxes and look only at imposing that

revenue in some measures on the individual taxpayer and consun, r

usiness is red.to other
and not look where b in terms of tax compa

states.

Mr. Thompson feels that a look at the whole tax structure

should be seriously given. He feels that item (d) reflected all

aspects of revenue not just the individual taxpayer but if

Mr. Biondi wishes to add on to that item, it is agreeable with
Mr. Thompson. Mr. Biondi@asked that the following end of
CION#15: sentence be added to item <d) Ion page 32: "including the relative
-!.burden of taxation on manufacturing and business in @he,State."

Mrs. Rita Smith wanted to clarify a point that the Commission,

t
is saying that-business is in good relative position taxwise o

operate in Delaware, but we are not able to.attract business

.because thebusiness leaders are making decisions on their own,

personal income tax. She was told yes, this is what happens.

Mr. Biondi's sugge@stion was made into amotion duly seconded.

The motion passed unanimously,

Item (3), page 32: The drilling for@oil and the development

of deepwater port is more than a question of the reaction of the

State to it, it is a question of economic feasibility. State

planning should take into account the judgment of industry with

respect to the economic feasibility of these matters. Mr. Thompson

mentioned that there was some feeling,that the State was tending

to drag its feet in terms of.being willing to participate in this

program to develop offshore. The offshore.activities may not

commenced right away and the onshore activities might be

located in New Jersey and Maryland and Delaware would be left

behind. The Committee did not feel that the Statewas "dragging

its feet" but the concern was that it should not. We wanted to

encourage the State to take a positive attitude rather than

a negative one toward the possible participation of the State

in this effort to develop offshore and do it in the way that

the Governor's Office has been doing it.

Mr. Webb remarked that people confuse local attitudes with

.State attitude. The State's attitude at the Executive level,

@along with the Chief Executives of the surrounding states, is

identical. This issue is being worked on a regional basis on

the whole problem of the Outer Continental Shelf. It may be

that one particular community in one particular state has one

attitude about the matter, but it does not reflect the attitude

of the wholestate. Everyone involved is trying to develop a

positive plan for offshore development in the whole region..

IOTION #16: A motion was duly made. to change item,(3) to read: "In
e p.57 for
nDtion) order to maximize the future economic benefits while minimizing

any detrimental impact, the State should establish a program to

participate in the Atlantic offshore drilling and/or the develop-

ment of deepwater terminals." The motion passed unanimously.

Mr. Wiener mentioned that the title of Part V is awkward.

Two or three different issues are considered in Part V and the

.@title does not reflect what is being discussed in the text. it.

was also mentioned tha t Part IV.which discussed the transportation

and railroad problem, the economic problems of Wilmington and the

housing construction business drop in Delaware, has nothing do

do with the "Quality of Life" in Delaware. It was suggested

that Part TV be titled "Problems Affecting the Economic Quality

of Life in Delaware". Mr-Biondi said that Part V title will

be reworded.

The Commission needs to consider, yet, the following:..

1. First, the need for a policy decision on the rate of

growth. This will have to be considered partially withdiscussing

of the Cost of.Public Services Report-The minutes of the last

meeting will be helpful with respect to that. The discussion

.is laid out-well regarding the overall rate of growth thatr

Delaware should seek to achieve in the next tenyears.

2. The memorandum by Dr. Latham entitled "1985 Forecast of

Revenues and Expenditures of Major Delaware Governments."

3. The summary of the Economic Development Committee Report..

4. The recommendation of the Land Use Committee Addenda

Report of May 15, regarding proposal of interimlegislation dealing

with lightering, aquifer recharge, and tributaries..

The next meeting of the Commission will be held on July 10,

p.m., in the Wilton Center.
1975, at 4:00

After this recapitulation of work left to be done, Mr. Biondi

went on with the remaining statements on pages 32.,and 33 which

represent an explanation of item (3).

Mrs. Slights missed part of the vote and explanation of.item (3).

She explained that she was asking Secretary Bryson.a question

apart in regards to item (3). Mrs.-,Slights wished to ask

whether this statement concerning the deepwater terminalwould

bein keeping with the present Coastal.Zone Act? If yes, then

Mrs. Slights would like a statement to that effect inserted in

item (3), to clarify the full meaning of the statement.

Mr. Biondi said he would not support this because it would

be inconsisten t with the recommendation. The law exists and if

the State does not have a statewide land use plan before July 1976,

,,it will remain in effect and the State cannot wait until then to

plan what the impact would be on.the State of offshore drilling.

Mrs. Slights said that she does not wish to change the

statement; she wants to make certain that thestatement is in

keeping with the Coastal Zone Act.

Mr. Thompson said that when the-Committee. dealt with the,

question of the.Coa.stal Zone Act, it felt that the Act should

be considered along with the planning effort. It is one action.

Apart from that, the State has to start thinking how it will

interface wi-th the offshore oil and gas drilling or a deepwater

port,

As.the statement is written, Mr. Daniello said he understands.

it to be for any kind of program that the federal government is

talking about on an offshore,port anywhere. Secretary Bryson

s
Ld that there are two policies in the statement. We certainly
aJ

do not want to g ive the idea that we want to do away with the

Coastal Zone Act. As far as the State's participation in the

offshore issue it is mandatory that we do. He feels that the
State has done a. good job on interstate participation and coordin-

ation. The second part of the statement regarding the deepwater

'56

terminal, Mr. Bryson does not agree with it, unless: it is

within the constraint's of the present Coastal Zone Act.

Mr. Daniello said that presently the Office of Technology

Asses'sment.(OTA) is doing a study on the feasibility of deepwater

ports along theDelaware, New Jersey coast. If Delaware is

se tting a policy in such a way that it cannot parti cipate in the

study that is being done because the State-happens, to have a

Coastal Zone Act, it is ins ane not to be the-,ke.to get and,lgive

the input.

Mr. Bryson reiterated that he has no objection to the ideas

advanced if they do not violate the Coastal Zone Act. If they

do, Mr. Bryson said he does not wishto participatein any.of it.,

To clarify the statement, it was proposed to add to item (3)-

evelopment of deepwater terminals."
"and any studies for the d

Mrs. Slights still wished to add "within the co.nfines,of the

Coastal Zone Act."

Mr. Thompson said that the thrust of this statement is.that

the State cannot close its eyes to what is going on.. May be the

State will want to considerthat the Coastal Zone Act be modified

to permit the development of a deepwater port because of such and

factors. The State should not make the statement that it will

not even consider it b,ecause of the Act.

Mr. Walton asked.if the Coastal Zone Act.would prevent the

State from participating in studies. No, was Mr..Thompson's

reply. But the change in the. language would have you do this.

n
Adding to the stateme t would disallow the State's, participation
in the study. There was disagreement there further expressed

57,

by the members of the Commission. Mr. Daniello said that if

the federal government or another state were to propose some-

thing that may or may not affect or be in violation of the

Coastal Zone Act, the State of Delaware should be a part of it

all if for no other reason to say that we.object because of

the Coastal Zone Act.

Secretary Bryson specified that he cannot be involved in

the participation of the development of a deepwater terminal

because of his position,on the Coastal Zone Industrial Control

Board,

Mr. Biondi attempted to finalize. the statement under item (3)

ITION.IP17:to reflect,all that was said, as follows: "(3) The State

should establish a program to participate.in the Atlantic offshore

drilling for oil and studies for the development of deepwater

terminals in such a way to maximize the future economic benefits

while minimizing any detrimental impact." The motion passed:with,

two "no" votes.

Mr. Daniello said suppose we talk about the development of

the @Port of Camden, the Port of Wilmington, or the Port of

Philadelphia - the development of either. The only thing we are

saying is that the only thing we can do is to study. We are not

to be a part of the.development. Well, Mr..Biondi said, how.

can we be part of the developmentof a deepwater terminal if it

violates the Coastal Zone Act?

Mr. Wiener said let's take a hypothetical example that the

study determines that the terminal should be in Delaware. Obviously,

our representative who would study the issue would have to make

the rest of the group aware that legislationin the State of

Delaware would have to be changed before the terminal can be

@settled in Delaware. What we do not want to say in this state-

ment of policy is lees not talk about it because we.have the

Coastal Zone Act. The modification proposed means that we will

participate in the study, and in the discussions no more,

no less. If the s.tudy reaches.the:decision that theterminal

should b e in Delaware, then the confrontation has to belfaced.

We cannot hide behind any language._

'To carry this further, Mrs. Slights said,-as it was said that

Delaware.should not hide behind the is-sue this is specifically

why she would like the Coastal Zone Act,to.be mentioned because

it is the issue. Mrs. Slights does not agreethat everyone

'Wishes to' have the Coastal Zone Act modified. Mr. Webb wished

to take the next paragraph out., He explained that Delaware is

part of a group called the Mid-Atlantic Governors Coastal

Resources Council, including Virginia,.New,Jersey, Maryland.,

and New York thatis involved in very close cooperation through,

a consortium of governors in developing a regional approach to

offshore drilling. This statement could create a problem at the

interstate level.by having the phrase "the development of deep-

water terminals" because the four other states are categorically

opposed to it. If "economically feasible" were inserted-between

'"terminals" and"in" it.would solve an interstate problem that

may arise.

Regarding the second paragraph of item (3), there is nothing

wrong in saying that Delaware should encourage development relating

,to offshore development or outer continental shelf, but when it

specifies deepwater terminals or offshore drilling, it creates,

a problem.

Furthermore, Mr. Webb said, the way..the federal law is

written,.there is gubernatorial veto andat the present time,

anyone wanting to put an offshore superport in-Delaware, outside

the coastal zone, or up in Marcus Hook., would be opposed by the

Governors of Maryland, New Jersey, and possibly New.York because

the Governors are opposed to it.

Mr. Biondi responded that ifthis Commission wishes to make

such a statement, he sees no reason why-the Commission should

not do so, independently from what the MAGCRC's position is.

Mr. Bryson said.that he sees Mr. Webb's concern. What

MAGCRC is doing goes far beyond any individual boundary. We

are trying to achieve a regional voice with the federalgovernment.

A few months back, we were out crying-in the wilderness with

no one to hear us. We have gotten together with out neighboring

states and now the federal government is listening to us. We

now have a chance to participate in the',offshore drilling of oil

and to carry out the next part which is to make sure that we

minimize the environmental impact; and to maximize our future

economic benefits.

What Skip (Webb) is saying is that we should not do anything,

purposely, that would compromise our pos ition with our sister

states because it is the only voice that we have in all of this.

Mr. wiener asked if we are saying that we want the offshore

development but we don't want the oil to come to our shore in

Delaware? Actually, this is our present position under the

Coastal Zone Act, but the fact remains that the program has to be

for deepwater terminal at some point. What we are taUdng about

is strictly participation in the study without trying to

pre-prejudice an yone's concept of what is in the best public

interest. At the same time, MAGCRC is there representing the

interest of the five states. If a deepwater terminal is going

to be detrimental to the development of our state, we expect

our representative to fight against it and veto it. This, is

consistent with the federal policy. Now what we are considering

is'the fact that we recognize that if we are.going to favor

and consider the w*hole question of the impact of the offshore

development in order to maximize the economic effects, then we

also want to be participating to see where and how that deepwater

terminal situation is going to be handled,. Mr. Bryson said that

our coastal zoneposition would jeopardize our chances with

MAGCRC. No formal action was taken On the suggested amendments

to the previous motion.

Mr. Biondi adjourned the meeting. On July 10, the Commission

will consider the second paragraph of item (3), on page 32.
R@:tfully submitted,
UA4@
Francine Booth
Recording Secretary

June 11, 1975

TO Pete Larson
Jcann Slights
John.Walton
'Steve Chamberlin

FROM: Daniel S. Kuennen, Area Agent
Community Relsource Development

RE: Conservation and Open,Sp4qe, Findings: #3

As you will recall from the June 9 Delaware Tomorrow
Commission Meeting, Chairman Biondi asked that I get to-
gether with you to draft a clear definition of 'open space'.

Of course the'time-precludes gettirg together prior
to the June 16 meeting so that I have drafted some ideas'.
you may want to revise or respond to at the next meeting..

If.you have any questions or comments please call
me at 856-5250.

Thank you for your cooperation.

Best regards.

cc: Francis Biondi

CONSERVATION AND OPEN SPACE

Findings

3.) It is clear that there are two ways of interpreting
open space. Open space is (generally.) all land and
water not pre'sently covered by buildings or structures.
In this.view open space is a counterpart. of development.

A second more specific approach regards open space as
a clearly defined area designated for preservation in
its own right. It is not considered merely as space
which has not been developed. It is land dedicated
to a specific use (open space) much like developable
land is designated for a specific use (i.e. general
residential).

Open space could include designated areas such as (but
not necessarily limited to): scenic areas, streams,
rivers, lakes, ponds, flood plains, beaches, prime
agricultural land, wetland marshes, swamps, wildlife
areas, parks, etc.

Delaware should.prepare.a land use plan that specifies
a percentage of remaini'n"g undeveloped land and de-
signate a portion of that land to remain undeveloped
as preserved open space.

Implementation

There are several'mechanisms fQr assuring open space.

Public acquisition is one approach. There is little
doubt of its effectiveness but the av'ailability of
funds is questionable. There are also other major
considerations: 1.) loss of tax revenue through
removal from tax rolls; 2.) opposition of ownership
to government owned land; 3.) many owners not willing
to sell or agree on an equitable price and 4.) the
high costs of land acquisition diverts public funds
from other objectives (i.e. housing, education, etc).

Conservation easements, a second approach, is the
acquisition by government to conserve environment
amenities. The owner continues to.own the land.
The land development, however, is subject to the right
of government restriction. The easement runs with the
land and binds all subsequent purchases.

Easements are cheaper than land acquisition. Farmers
for instance, can continue to farm their land and are
paid the difference between the value of the land with-
out any restriction on development and value of the land
as restricted. Lastly, the land remains on the tax rolls.

CONSEiVATION AND OPEN SPACE
Page 2

The National Park Service after 20 years experience
with easements concluded: "easements breed raisunder-
standing, administrative difficulties are.difficult
to -enforce, and cost only a little'less than the
fee".

A third and newer concept is the Transfer of Develop-
ment Rights (TDR). Every owner of preserved open space
would receive certificates of development rights in an
amount that equals the percentage of assessed value of
undeveloped land to the total assessed value of the un-
developed land in the jurisdiction.

.Other measures are: critical areas zoning;,encourage
gifts, etc.

DELAWARE TOMORROW COMMISSION

Minutes of Meeting of July 10, .1975

A meeting of the.Delaware Tomorrow Commission was held.on July 10, 1975,

,-t the Wilton.Community Center. The following members were present:

Mr. 0. Francis Biondi Chairman
Mr. David.R. Keifer
Ms. Dorothy Greer
Secretary John D..Daniello
Mrs. Joann D. Slights
Mr. James H. Gilliam, Jr.
Mr. Ernest W. Thorn
Mr. Frederic G. Krapf, Jr.
Secretary John C. Bryson
Mr. Ross E. Anderson, Jr.
Senator Robert J. Berndt
Mr. Carl S. Oldach
Mr. John F. Walton
@Mr. Jay.N. Cooperson
Mr. Peter A. Larson
Mr. Richard Bauer@(voting proxy for Melvin Slawik).

Also present:

Mr. Lance Werner
Mr. Bob Meinen
Mr. Steve Chamberlin
Ms. Merna Hurd
Mr. Bernard Dworsky
Ms. Rita Smith
Ms. Peg McClane
Mr .Raymond H. Malefant
Mr. William R. Latham, III
Mr. Eric Brucker
Mri. William Markell
Mr. Arthur Krieger

At the last meeting the Commission discussedthe Economic Development

Committee report from page 13 to page 32. It was agreed,to amend (3) to read

"...drillin g for oil and should study the dev elopment of deepwater termin,als...Il.

fl/Ir. Biondi noted that, at the last meeting, objections were raised to the

next paragraph, specifically, the sentence "Delaware should take the initiative

to encourage such developments...". He said the principal objection to this

phrase was the idea of developing deepwater terminals. He said that Secretary

Bryson expressed concern that this statement might cause some problems in

dealing with the policy decisio ns that have been made by the Maryland, New

Jersey, Virg inia and other governments about deepw,ater terminals,. Secretary

said that MAGCRC has been very important to us in
Bryson giving us a voice

within the federal government. This is +he first time the federal government

has recognized, at least a group of states., They won't recognize individual

states. We do have a role to play and we do have some impact on the shorelines.

For the first time we are getting information that was,previously considered con-

fidential by the federal government., Secretary Bryson.said he felt it.was

important for the Delaware Tomorrow Commission'to-protect this position.

Mrs. Slights said she feels It cannot be assumed.that deepwater terminals

are going to develop along the east coast. She moved that the first sentence

of this paragraph be stricken completel'y, because it is an,arbitrary statement'

that doesn't belong In the Delaware Tomorrow.Commission.Report.
Mr. Krapf moved that the first sentencelbe amended',to read: I'Deepwater

termina-Is and offshore drilling,appear likely to develop along the East Coast".

This motion was seconded by Mr. Weiner.

Mr. Thorn questioned the need for clarification.of deepwater terminals..

It was agreed that this term covers all concepts of bringing oil to shore.

Mr. Krapf moved that the entire paragraph be.amended to read "Deepwater

terminals and offshore drilling may develop along the East Coast. Del.aware should

be alert to and involved Jn such developments, both to reap the benefits of the

job and revenue opportunities and also to maintain control to avoid undesirable
environmental and other affects." 'This motion was secondedby Mr.'Kreiger.

'Mrs. Slights recorded the only no vote.

It was,m'oved.and seconde,d,to.accept the remaining content on page 32 and..'

33. This was agreed to by al I @present.,.

The Commission began the review of this report on page 13, so they then

went on to discuss pages 1-13. Mr. Biondi asked the Commission to be aware

of the fact that most of these issues have been,discussed previously in.

pages 13-33.

Mr. Krapf noted that this summary is a synopsis of everything (in the

Economic Development Committee Report) previously discussed. He felt that the

Commission should agree to substitute duplicate issues,w,ith what was previously

agreed to by the Commission.

Mr. Biondi asked if there was any disagreement-with the concepts

illustrated in I.A. Mr. Weiner raised two points: He felt that the use of

the word growth should be cl.arified as there are two essential kinds of growth

population growth.. He felt that the intent of the word "growth"

is not really clear in certain sections of these statements. He.suggested that,

in the final write up, this distinction be.clarified.

Mr. Biondi asked Dr..Latham what kind of growth did he perceive this

report to be.addressing - population or economic and how would, he differentiate

a measure of economic growth from population growth. He was told that this

report was primarily based on population.. Mr. Biondi noted that 1. (a), (b) and
(c) seem to relate entirely on, population growth.'

Secretary Danlello, a member of the Economic Deve.lopment Committee, said,

he thought the Committee meant both population.and economic growth in.l. A.

Mr. Biondi didn't feel that,the findings are consistent with.both population

e discussed both population
and.economic growth. Mr. Oldach said t he Committe

and jobs. Mr. Biondi asked the Committee to meet and cl*arify it's thinking

and discuss the concepts of population and economic growth separately and state

their conclusions with reference to specifics In each category.

Mr. Chamberll.n suggested that the Committee not only look at population and

economic growth as the two primary elements of growth, but that they,also look

at some of the other aspects of growth that might tie together the conclusions

of the Land Use Committee with the Economic Development Report, etc. He suggested

that the Committee compile an entire separate section@which speaks basically

to and defined those two major points; that is, population and economic growth

and perhaps single out some indicators.

Mr. Weiner made a motion that Section A be sent back to the Committee to

define a little more clearly the characterist.ics,of the population and economic
growth and the'interrelated factors. This motion was seconded by Mr. Krapf.

All present agreed with Secretary Daniello voting no.

Mr. Biondi stated that Mr. Webb has reviewed Section 1. B. (c) and had

the Budget Office prepare a study of debt service as percent of general fund

disbursements over the course of years. Mr. Webb suggested that this paragraph

be reworded as follows:

"The cost of past long term borrowing (debt service for interest and

principal repayment) has Increased In dollars significantly. However, as a
percentage of annual total General Fund Disbursements, I t peaked in 1961 at 20,%,

:declined to 18.1% by 1968 and further declined to 15% for the year beginning

July 1, 1975, (Fiscal Year 1976).11

Attached to Mr. Webb's statement is a study.from the Office of Budget

.Director, December 1968.

A question was also raised onparagraph 4 (a). There was some question

as to whether Delaware was ever a high income/low tax,State. Mr. Hudson, of

the State Planning Office, has done an analysis of State/local taxes in Delaware

from 1958-1973, including Stateand local tax revenues.

Mr. Biondi, moved that the Chairman of the Cost of Public Service Committee

(provided w -ith Mr. Webb's memo and attachments to Mr. Biondi) meet w,ith his

Committee to d,iscuss the issues raised on B. 1 (c) and 4 (a-). He fe.It that

since the Cost of Public Service Committee has expertise in this area, they

should be able'to look at these issues and come back with something to dis-

tribute to-the Commission. This motion was seconded by Mr. Krapf and.approved

by all present.,

Mr. Biondi gave Mr. Webbts letter and.supporting documentation to Mr.

Kreiger for study by his Committee.

The remainder of Section B was agreed to with no comments. Section.-C

was approved with no comments.

In Section Di Mr. Biondi pointed out that-z number of Commission members

disagreed with the title of D.: ."The 'Quality of Lifelin Delaware has declined

markedly-" The Commission had agreed to amendthis to read "The economic

vitality of Delaware has declined markedly"., Mr. Cooperson asked if this

statement isn't true of the U. S. in general and not just particular to Delaware.

Mr. Biondi said the point of the first two parts of this report is that, while

we were growing at faster than twice the national growth rate at one point i.n

time, we are now growing at the national growth rate -.which has declined sub-

stantially. So we are talking about a more serious problem than the.current

recession. In other words,.if the current recession were to end 16 normal

course and have a normal economlc@recovery, we would still have this problem

of growth in Delaware.

Mr. Weiner pointed out that Section D answers the question that's been

raised. Nlot only.does the new title say that the economic vitality in Delaware.

has declined markedly, but it points out specifically.where and how: highways,-

railroads, the city, etc. and none of these infers the recent recession that

the U. S. Is in.

Mr. Biondi brought up an issue rais
ed by Senator Berndt on page 3, on the

accuracy of statement (d "Additional borrowing faces increasin g political

resistance". He said he thought the Committee.was trying to say that the

additional borrowing is a cost which we have to pay at some point in time.

Mr.. Biondi felt that rather than saying "faces increasing political resistance"

what they were really saying is that additional borrowing will have serious

long range cost impact on the State. Mr. Weiner felt that this sentence serves

no purpose. Senator Berndt moved that B. (d) be stricken from the report.

Mr. Krapf seconded this motion. Secretary Danlello voted no. Al I others

approved.

In Section D. 1 reference Is made to Delaware's highway programs. It was

moved and seconded that some mention should be made in this section.of the fact

that the passage of the recent bond bill incorporating $42,000,000 in funds,

for the Highway Department, shows a recognition of this problem. All present

approved with Secretary Daniello voting no.

Secretary Daniello said that motions are being made to change the summary

without any reference to making any motions to refer to the kind of language

use - in some cases idential language - in Part I-V of this report. He suggested

that if the Commission is going to make a motion to strike, delete, or amend

whatts in the summary, then the Commission should be sure all the policies
stated in the reports are consistent. Mr. Biondi said that if, at any point

in time, Secretary Daniello would like to refer a.wri.tten communication to the

Chairman indicating any conflicts, the Chairman would be happy to receive it.

Section D. 2 was approved with no comment.

In Section D. 3 Mr. Dohorty asked what time frame this refers to. Mr.

Biondi felt that the City of Wilmington has been suffering for quite sometime.

Mr. Biondi suggested D. 3 be amended to read "The City of Wilmington suffers.

from problems similar to those of other urban centers in the U. S.". He asked

Mr. Dohorty if there.has been any kind of-signficant population in flow back

into the City which would make D. 3 not correctly-in focus at the present time.

Mr. Dohorty answered that the Bureau of Census released information saying that

the population has declined from 80,000 to 74,000, however the City of Wilmington

disagrees with.these figures.

Mr., Weiner noted in D. 3 (a) he felt that blighted housing and the crim e

rate have.been serious problems, and have not just become problems.. It was

agreed to amend this sentence to read "Blighted housing and the crime rate are.

serious problems".. Mr. Weiner felt that the question of the time frame Is

important in this issue.
Mr., Anderson said. that the statement "there has been a sharp decline in

the quality-of public schoo1s" (3 (b)) is not compatible with what was said in

Part IN which says "expand educational programs to upgrade residents" skills

implie s concern with public
and motivations". Mr. Biondi agreed. that 3 (b)

schoo.1 buildings,when, in.fact, the concern is with the educational system

itself. This phrase should be amended:to read: "decline in the qua1ity o f

publiUc education".

Mr. Biondi read Section.D. 3. to incorporate the suggested amendments.

This secttion would read as fol1ows:

3. The City of: Wilmington suffers from,similar problems to those of other

urban centers- in the U., S. since, 1950.

(a) Blighted housing and the crime,rate are:serious problems.

(b) There has been a sharp decline in the quality of the public school

education program..

City to the'suburbs.

There was a great-deal of discussion concerning the educational system

in the City - whether or not it has improved recently or deteriorated. Dr.

Latham suggested that 3. (b).be stated in a more positive manner so as to read:

"The quality of public education needs to be improved".

Mr. Oldach felt that the iss ues all refer to the first paragraph in Part

I - what are the major post - 1970 developments which have changed the economic

climate of Delaware. Mr. Biondi said that if the Commission is talking about

post - 1970 developments, D. 3 would have to be amended to read:

3. The City of Wilmington has continued to suffer from problems similar

to those of other urban centers in the U. S.

(a) Blighted housing and the crime rate are serious problems.

(b) The quality of public education needs to be substantially improved.

City to the suburbs.

It was moved by Mr. Krapf and seconded by Mr. Oldach that D. 3 be adopted

as amended. This was agreed to by all present.

D. 4 was agreed to with no comments.

Secretary Bryson expressedconcern with Section E. He felt there was no

data in E to support the phrase fienvironmental policies" in the title,

Mr. Biondi suggested that Section E.1 (c) be replaced.with thepolicy

rewritten in Capital Gains and agreed.to at the last meeting. This will read

as follows: "Alternate sources of revenue must be judged for their eq uity and

effectiveness, including the relative burden of taxation on manufacturing and

business in the State".

Mr. Krapf again pointed out his.concern and Secretary Daniello's concern

about possible,conflicts of policies agreed to by the Commission. Mr. Biondi

said there are not many points of conflict, and the conflicts will be rectified

to agree with previously adopted policles.

Mr. Anderson asked if In the t itle of E. the word "environmental" could

be changed to development, because there is no su bstantiating evidence to

describe environmental conflicts. Mr. Biondi said that.E. 2 refers to the

Coastal Zone Act where.Delaware has adopted an anti-industry image as compared

to its past reputation. It was decided at the last meeting that it was the

controversy over the Coastal Zone Act and not the Act itselfthat gave Delaware

its anti-industry image.

Mr. Wel.ner felt that this policy Implies that.government and bus,iness

leaders are anti-environmental and he,doesn't feel that that is accurate. He

made a motion that E. be amended to read "Government and busine ss leaders have

publicly disagreed on State tax and developmental policies.- This moflon was

seconded by Mr. Anderson. Secretary Daniell,b,.commenting on the motion, said,

as was discussed at the Economic Development.Committee Meeting, that business

leaders have criticized and have disagreed with the State's environmental

policies - the crux of which is the Coastal Zone Act. Mr. Weiner moved that

instead of singling out government and business leaders that we say: "Leaders

in government, business, labor and other groups have publicly disagreed on

State tax and environmental policies". This motion was seconded by.Secretary

Daniello.
Secretary Bryson stated th at if the C'ommittee!s reasoning for inserting

the phrase "environmental policies" is just on the basis of the controversy

of the Coastal Zone Act, it is unfair to put all other environmental policies

in the same category.

Secretary Schranck moved Mr. Weiner's motion be amended to read: "Leaders

in government, business, labor and other groups have publicly disagreed on

State tax and some environmental and developmental policies This motion, as,

amended,, was seconded by Mr. Krapf and agre ed to by all present.except Mr. Bauer,

voting no.

Moving on to Section 11, Mr. Biondi said these issues address the economic

strengths on Which Delaware can build. He felt that under A, 1 and 3 relate to

Delaware's geographic location, however 2 seOms.to relate more to a quality of

land rather than Its location..

Dr. Latham said that in A. 2, the,point being made is that Delawarels Is

simply located geographically to a large potential market for agricultural

products and that's why it's important to mention agriculture in relation,to

it's geographic advantage. He said this section ought to be edited to clearly

talk about the agriculture market.

Senator Berndt asked in A. 1, what waterways are we talking about? Mr.

Biondi clarified that the Committee-was tal.king about waterways, not for

development, but as transport corridors.

Mr. Thorn suggested that A. 1 be amended to read: "Delaware is,strategically

located in the New Castle.metropolitan corridorP with favorable waterways for

transportation and still has a substantial amount of land which could be used

for future growth. This suggestion.was moved and seconded by Secretary Daniello..

Mr.-Cooperson questioned the implication of having a substantial amount of land.

He felt A. 1 is in conflict with A. 2, Mr. 01dach answered that this is just

a list of strengths which, if desirable, could be used. In other words, the

Committee listed things that would make,it possible for economic growthin

Delaware, if we want to pursue that. Mr..Walton felt that it should be clearly

stated these policies will only be followed if desired, It appears to him,

that the whole State is on the market block. In a vote on the motion, Mr. Walton,

Mrs. Slights and Mr. Coopersonvoted no and the motion was adopted.

On Section A. 2, Dr. Latham moved that it be amended to read: "Delaware

has a high level of
land devoted to agriculture; and, with the nation's food

needs increasing, the favorable location of Delaware's agricultural industry

should permit it to continue to make a major contribution to the State's

economy. This mot ion was seconded and approved by all present. M r. Biondi

requested that a copy of this section - as amended be sent to Mr. Walton to

give him the opportunity to make any comments after he has seen it in writing..

It was moved and seconded that Section A. 2 (page 7) be adopted as written.

This was agreed to by all present.

On Section B, Dr. Brucker questioned the automotive statement in B. 1.

He said that the national trends indicate that we may never see the rate of

alltomotive production we say in the late 1960's. Secretary.Danielip felt that

the word "automotive" should not be left out, as it is one of the three major

industries in Delaware.
Mr. Oldach felt that the'title of Section B. should be changed to read:

"The major Industries in Delaware have been In the growth sectors of the economy".

He said It is statedo In B.,3, that theremay be some question about the

automotive industry.

Mr. Biondi clarified that this paragraph states that the major industries

in Delaware remain in growth sectors of the economy. He said it.doesn't imply

that we've seen all the growth we are going to see in any one of the three

industries illustrated and the only comment made pe rspectively is that the

11growth will probably continue to expand at a reasonable rate". There is no

indication that it will expand at the rates of the past4 These industries pay

better than average wages and the particular problem.of the auto industry is

pointed out.

A moti on was made by Mr. Krapt and seconded by Mr. Thorn to adopt Section

11. B. as written. This motion was approved by all present.

On Section C, Mr. Biondi noted that the Commission had previously

exhausted the debate over the specific content of this Section. He said there

wasn't anything in Sections C, D and E that had not been-previously.debated.

and.approved by the Commission. Mr. Krapf moved that Section 11.,C, D and E be
accepted as written. This motion was seconded by Secretary Daniello with a'll

present voting approval.

Mr. Krap f moved that Section 11. A be approved as written. This motion

was seconded by Secretary Daniello and approved by all present.

Mr. Biondi stated that all the questions in III. B were debated at the

last Commission meeting. Mr. Krapf made a motion that 11. B 1-4 be accepted

as written. This move was.seconded. Mrs. Smith requested clarification on the

word growth as used in this section 'does it mean a mixture of economic and

population growth. Mr. Biondi said that B. I refers to population growth.

B. 2 and B. 3 also refer to population growth. However B. 4 seems to relate to

other problems, such as environment related considerations. All present voted

to accept Section B as written.

In Section Ill. C, Mr. Cooperson moved that we strike the phrase on

internal population growth, because he feels there is no way the Commission can

control internal population growth. Mr. Biondi felt that, in terms of the way

the Committee used internal populat ion growth versus in-migration, they were

not talking about controlling internal population growth, they were talking

about whether or not we ought to stimulate a rate of economic growth which

.Would require net in-migration from people for jobs.

Mr. Weiner was concerned with the sense of the entire paragraph. He said

that he as sumes there will be an end to the Delaware Tomorrow Commission. In

this report, the Committee has indicated a need to took at new jobs, which

(Mr. Weiner feels.) is a tangible, feasible task. However, if the Commission

wants to establish growth and development goals and specify the amount of new

businesses desired and set up some specific figures, he suggested that Section

C is virtually an impossible task. He further stated that.on page 15, of this

report, the Committee did an excellent job in taking the-whole question of growth

and projecting the figure of the number of jobs In a given period.

Mr. Biondi then sugg ested that 111. C be amended to read: "...the Delaware

Tomorrow Commission should esta blish job growth goals including such things...".

Mr. Oldach explol ned the Committeefs point in.this section was that we

haven't analyzed the economics of whatt,shappened In the.past4 You need.to

make somesortof analysis to try to relate a cost to various changes. When

that is done, you are then in a position to judge looking forward to some sort

of program and whether or not the State can affo"rd. it. For example, we don't

know if the State can afford to not have any new industries coming into Delaware

whether the State could keep up with the expenses.

Mr. Weiner's point was that there are many growth and development goals

that can be identified* which would be non-economic in character.

Mr. Walton expressed concern with the phrase "in light of the above.growth

impact analysis". He said B. 1.6-4 are only questions. There are no answers.

He felt that C should state that "when the answers to B. 1-4 are realized,

then we will establish job growth goals". Mr..Biondi then agreed to strike

above growth impact analysis", and start Section C as follows
"In light of the

"The Delaware Tomorrow Commission should establish 4ob growth goals Including...
J

Mr. Weiner again stated that page 15 gets specific as to goals and figures

and that the summary ought not to be generalized. Mr. Oldach said that the

.statements on page 15 are not goa Is they are ass-umptions. They have nothing

or what the Commission should "shoot for".
to db.with what is desirable

It was moved and seconded that Section.C be amended to read: "The

Delaware Tomorrow Commission should establish job growth goals including such

things as internal population growth vs. in-migration, type and amount of new

businesses desired, and a forecast of the resulting changes in State income and

expenses".
Mr. Bauer asked further clarification on the phrase i1such things as

internal population growth". Mr. Biondi,said that phrase is not addressed in

isolation, it is discussed in terms of internal population growth vs. in-migration

should the job development goal be such that you would produce a number of jobs

in the future.which would not only be sufficient to provide jobs for the growth

of population within the State but would encourage a number of people from

outside the State to come into the State for jobs. Mr. Bauer felt that this

concept was not very clearly stated.

The motion was approved by all present.

Mr. Biondi felt that Section D was sufficiently qualified and that the

key words are "some continued growth". Delaware needs some growth, as a necessity,.

just to meet the imbalance kind of thing that the Committee attempted to do on

page 15. Section D is within the context of Part I of the Committeevs report

pages 13-15.

It was moved and seconded that Section D (not including 1-11) be adopted

as written. This was agreed to by all present.

Mr. Biondi said it was his recollection that the Commission had previously

voted on D. 1-9 in the previous Economic Development Committee Report and had

approved each step.

Mr. And erson asked if D. 5 had been adopted, as.written. Mr. Bondi said

it had been revised and the problem had been dealt with.

Mr. Cooperson asked if D.1 s houldn't be modified to say: "It is recommended

that the Governor and Legislature develop..."'. Mr. Biondi said he thought

the Committee was implying some more degree of Executive responsibility.

Mr. Thorn asked if D. 10 (a) could be amended to.read: "By developing a

Comprehensive State-wi.de Land Use Plan Thereby deleting "to remove the

inequities of the Coastal Zone Act". Mr. Oldach felt that the whole point on.

this action was to deal with the anti-business reputation of Delaware caused

by the Coastal Zone Act.

Mrs. Greer asked if it was necessary to act on 10 (a) w.ith the resolution

adopted at the last meeting. It was moved and seconded that the Commission

substitute for 10 (a) the resolution adopted by the Commission with respect

to the Coastal Zone Act'and.the development of a Comprehensive State-wide

Land,Use Plan. 10 (a) would read as follows: "The Coastal Zone Act was passed

in lieu of a more complex Coastal Zone Act-which was proposed earlier but

received little support. In reality, both goals are an attempt to begin land

use,planning. -The Committee has concluded that the time has come to replace

the initial Coastal Zone Act with a Comprehensive State-wide Land Use Planning

Act. The present regulation-should be used intact as interim guidelines to

govern and.develop the coastal zone until the new land use management regulations

are comp lete and accurate. At that time, the Comprehensive State-wide Land

an
Use Management Plan would supersede the Coastal Zone Act d other land use

control legislation-presently,administered by the State".

Mr. Weiner moved that the above be substituted for 10 (a). This motion'

was seconded and approved by all present.

Mr. Biondi said that 10 (b) and (c) have already been acceded to in the

body of the report.

Mr. Cooperson said it was his re Icollection, on the matter of the coastal

zone and State land use planning, that when the Commission.went through the

Land Use and Com munity.Development Committee.Report, t-here was also a resolution

approved by the Committee dealing with the coastal zone relative to extendi,ng

the coastal zone protections to other non-industrial uses and that should be

.considered in this context.

Mrs. Slights moved that D. 11 be replaced by (3).on page 32 as amended

and adopted by this Commission. This move was seconded and.agreed to by all

present. D. 11 would read as follows: "The State should establish a program

-to participate in the Atlantic offshore drilling for oil% and should study the

development of deepwater terminals in such a way as to maximize the future

economic benefits while minimizing only detrimenta_l.impact".

This completed the review of the Economic Development Committee Summary.

The Commission then went on to discuss and review Dr. Latham's working draft

of 1985 forecasts of revenues and expenditures of major Delaware governments".

Mr.. Biondi asked Dr. Latham to explain what this..document,is and its concepts.

Dr. Latham said that he.felt the most important point in this report Js

the kinds of assumptions that are drawn up rather than the.spe.cific.numbers

that came out. The report is a result of th.e Chairman of the Commission's,

suggestionthat an-attempt be made to extrapolate past trends in revenues and

expenditures [email protected] assumptions and see what happens in the

way of revenue and expenditures for State government (all the governments.in,

the State).

Dr. Latham distributed copies of a paper entitled 'Additional Explanation,

of Revenue and Expenditure Projection". This paper explains the-process used

in the June 30 report in a little more detail. (A copy is attached).

Dr. Latham added that he feels the most vali,d way of making proijections

is to take the kinds of revenues and exp Ienditures that seem, in the past, to
have,responded to changes in population and project them on a per capita basis

and take those that have not responded as strongly to changes in population and

simply project their totals'and then apply different rates of inflation to

expenditures and revenues. This total would be similar to projection 10.

Dr.. Latham made two caveats regarding the numbers:

1. The population figurehe used he picked up from an earlier draft of

the Economic Development.Committee Report and did not reflect the

number.which had been a greed upon by the.Comm ission of ap proximately

700,000.- so that would change all the per capita projections.

@2. There were some numerical errors, simply because the people compiling

the report could not believe that an adcumulated growth rate could do,

the kinds of things it did. These errors were corrected to realistic

figures by-those compiling the report.
He said that the 10th projection may be.the most reasonable kind of numbers

that one could arrive at.

Mr. Biondi asked in Table 1, based on 1985-10, what does this table say.

Dr. Latham answered.that this table says: if you are willing to make the

assumption that, in general, the rate of Increase in revenues would be about

5.15% and if you assume that some revenues (as shown in' Table [I-'IV) ought

to be regarded as per capita based, while others should not.be regarded as per

capita base and then make simple extrapolations of trends from 1968-1973,

revenues from 1985 would be $3,*712,000,000.

Dr. Latham said that assumed along with all otherfactors.-is that the*

rate of growth in the amount of taxes people will continue.

Dr. Brucker said that, in the revenues, it should be made clear that Dr.

Latham did include Delaware, non-tax sourcesi There is avery-large ch.unk of

external funds coming into this projection; i.e., revenue sharing.

Mr. Biondi asked Dr. Latham if any of the data compiled in his report will

help him answer the four questions on pages 8 and 9 of.the Economic Development

Committee report. Dr. Latham said that you need the answers to those questions

to make therevenue expenditures.
Mr. Biondi said he was having difficulty making Dr. Latham's report relate

to the issue,of what. kind of rate of job growth the Delaware-Tomorrow Commission

should support in the State. Mr. Kreiger explained that the Cost of Public

Servicets, original report illustrated that the total per capita costs were at

the present rate., approx imately $1,100.per person residents in the State.

That figure included revenue sharing monies, outside sources, etci Dr. Latham's

report attempted to point out that we'll, be spending approximately $5,-,300 per

person by 1985, which is about five times what welre spending now - assuml.ng

a population of 700,000 by 19 85. This also assumes that the average continues

at the same rate for the,next 12 years.

Mr. Weiner asked what usefulness are the figures in Dr. Lathamrs report.

He felt that the Commission could do one of two things:.

1. Examine each assumptilon and get a common agreement on the

assumptions and they can go from there, or;

2. Give-them some other basis for making those assumptions.

Mr. Weiner felt that the Commission is not prepared to gi.ve another basis.

Therefore, he questioned what the Commissi,on can say as a result of.these figures..

.Dr. Markell noted that Dr. Latham has shown that,.given any set of projections

the Commission decides upon, yo u can come up,with numbers., The Commission has

to decide on projections in different areas by 1985.

Mr. Walton said that we need the answer to the question of: how much did

this growth that we now have cost us? If the Commission could have an idea

of what we've spent for what we have, we could approach this issue from a more

intelligent point of view.

Dr. Brucker-felt that, rather than getting tangled up in the expenditure

side of the problem vs. therevenue side,;the Commission should first address

reasonable projections of the tax burden on the population to 1985, because

if.you can't raise the funds, discussing expenditures is meaningless.

Mr. Thorn stated that he felt that the figures in Dr. Lathamts report

serve one purpose and that is the importance of knowing and evaluating the

benef its and cost ef f ects of whatever.the Commiss !on eventually recommends.

Mr. Biondi said that this seemed to be the general concensus. He said that the

major question +he Commission needs to answer is: What 'rateof growth should

Delaware seek to achieve in the next few years. In order to get to those

questions, the'Commission has to answer the questions that the Economl,c,D.evelop--,

ment Committee proposed.

Dr..Brucker asked it we could go back on the revenue side of the first cut

and ask what we see for the State of Delaware In terms of allocating resources

from individuals and corporations to the public sector. Answering this question

would tell us what we have left to work with on the revenue sidei He then

suggested looking at the expenditure side and do some ad hoc analysis of what

the historical expenditure trends hold for the future. The Commission can thei-I

.See how our reasonable projections of expense compare with our re'asonable

project of revenue. However, he said, the first question is': do we want

the public sector to grow as a percent of the income ofthe Stat`6. He'defined

public sector" as primarily State and local government expenditures total

dollars,allocated to services,that are generally supplied by governments within

the State.

nor the valid
Dr. Latham felt that the easiest approach to take is to ig

questions which have been raised, because we can't answer them and go ahead

and try to make a projection of likely revenue that can be raised on the

assumption, for example, that people will or won't be wHling to contribute

larger portions of their income and,then look at individual expense and see

which ones could arbitrarily be candidates for cutting down thesize of total

revenues if it happens that total expenditures are larger than total revenues,

based on the current projections.

.Mr. Chamberlin felt that you cannot accurately project costs,@ except that

in 1985 the revenues and expenditures ought to be equal. Flowever,.in examining

the rate of growth, we can make reasonable projections as to the population

increases and what is likely to occur in terms of in-migration. We should also

make projections about what is likely to happen in an economic context. Both

of these projections have to be focused toward the quality of life in Delaware.

Dr. Latham said he was not trying to balance revenues and expenditures.

What he was trying to determine was the willingness of people to buy government

services, their willingness to remain constant and what might.happen to expen-

ditures. Are we going to be able to afford the kind of government services that

provide the quality of life desired by Delaware residents? If we find out

that a reasonable projection of expenditures far exceeds the expected willingness

of people to pay for services provided through the' expendituresi then Delaware

won't grow it won't be an attractive place.

A lengthy discussion followed concerning the difficulty of projecting

expenditures for the future.

Dr. Latham said that Delaware should pay the bill for whatever rate of

growth we get and we should try to devise'a general position that imposes the

cost of the rate of growth on those who are causing it.

Mr. Biondi suggested that possibly the Commission ought to make a policy

decision that states that there is not a great deal to be gained by encouraging

people to come here for jobs look at the issue from the point of how many

jobs do we need to support the natural@growth in the population we expect and

maintain a quality environment. With this assumption, Delaware will have t(

.pay the bill for whatever rate'of growth that Is, and not try to quantify the

questions of cost to that rate of growth.

Mr. Chamberlin felt that each project varies@ so much that it can't be de-

cided how much growth you want in advance.

Mr. Weiner said that there is going to have to be a decision-making process

that sets up some general criteria of what the State wants and not say whether

it has a cost benefit or negative cost in terms of dollars, but relates to the

question of how we achieve our goal.

Senator Berndt asked Secretary Daniello what he would project his

Department's expenditures to be over the next ten years, in order to get some

idea of the increase of the cost of government. Secretary Daniello said,

assuming the same level of services, he only anticipated approximately 5% a

year increase.

Mr. Chamberlin felt it would be more meaningful to define the maximum level

of unemployment, rather than trying to define avallab le jobs'in the State in

.1985.

Mr. Biondi said he didn't see how this could be accomplished. How

would@we compare-Delaware's rate of unemployment and what.is an acceptable

rate?

Mr. Kreiger felt that everyone has overlooked the fact that Delaware seems

to be living "hand to mouth". and has no surplus whatsoever. If any sort of

catastrophe did hit Delaware,,we wouldn't have any reserve money to fall back

on.

Mr. Biondi felt that the.concept of a "publi.c surplus" was a mutually

exclusive idea.

Mr. Larson felt that, in trying to think ahead at the cost of government,

you have to look at it in terms of the product being delivered and.the quality

of this product. Once you've set the level of services for quality that you

want to have to service any situation, youtll be able to put numbers on them.

Mr. Biondi said that there is a general recognition by the Delaware Tomorrow

Commission that the cost of public services in Delaware - in terms of numbers

of employees, etc. is high In the sense that,we have jurisdictions that we

don't need. For example, he said there is no rational basis for the existence

of the City of Wilmington as a governmental unit.

Mr. Morton pointed out that in 1985 approximately two-thirds of Delaware's

total income will come from sources outside of Delaware. Currently, approximately

30'/J' of Delaware's income is from outside sources.

Mr. Biondi suggested that tee Commission ought to recommend policies,

eliminate those that are negative in the economic picture and as growth happens,

make some decisions about what its impact,will be'on all areas dec ide each

case on its own merit.

Mr. Kreiger suggested that now that the base data are now available, some

effort be made to construct some sort of model where we could attempt to keep

rates and costs current for the future.

Mr. Biondi asked that.the Commission look at the question of what kind of

rate of growth, if anyis desired. How should the Commission handle the question

of a recommendation in the area of growth and the creation of an environment for

growth. Fie said any ideas wi.11 be discussed at the next meeting.

Hr. Biondi said that, at the last meeting, the Commission approved the

creation of a State-wide Land Use Plan, with a comple tion date of May 1, 1976.

Mr. Keifer, of the State P.1anning Office, was instructed to report back to the,

Commission with! n 30 days with a program for getting the job done by that time.

The Commission was insistent.that this be a.cooperative venture between agencies

in the.State government and local government and notbe a "one man show".

Mr. Keifer held a meeting on-July 9. Representatives from New Castle Count-.,,

Kent County, Sussex County, Wilmington, Secretary Bryson, Secretary Hall,

Ms. Morna Hurd, who is responsible for New Castle's 208 Program, Sussex County

Engineer, who is responsible for Sussex County's 208 Program. Everyone showed

up either personally or with representatives, except for Wilmington. Mr. Keifer

said that the group felt that we can tackle the problem. There was some question

as to how much could really be accomplished by next May, particulary because of

the wide difference in planning in the three counties. New Castle County is in'

good shape because their 208 project is a,little over Ia year old. They are

.updating their comprehensive-plan. Their basic work should be finished about

the end of this calendar yeart so that could be input to what the Commission is

discussing. Kent County is not in as good a position as New Castle County. They

have an adopted land use plan. Sussex County has just begun their 208 program

and they are at least a year behind New Castle County.

One of the ideas this group came up with was.that perhaps we could come

up wl th some kind of State-wide plan on or about the first of May with a

recognition that the level of sophistication of the plan would vary depending

on where you were in the State and at the same time-come up with some,kind oil

mechanism to build in these other programs-and amend the plan accordingly as

they come on I i ne.

The group identified a number of problems. The re was a general consensus

that the Chairman, or someone from the Commission should meet with local officials,

county commissioners and planning commission members - and brief them on Delaware

Tomorrow-and why we're doing this plan Thereasoning behind this is so that

the planners.who have to be involved would have the support of their bosses and

also so that when we come out with.-some kind of plan, the local officials know

what they are buying into also since the concept of the plan said it would

be a cooperative thing, in the implementation.of it.

Another issue that was raised was, in terms,of a State-wide plan, are -the

land use policies that have been adopted by the.Commission, in fact, the pol.icies

that this plan is to be based on? Mr. Biondi said, from the point of view of

the Commission, yes. That requires that governmental official s be convinced

about the merits of those policies.

Mr. Weiner asked tlr. Kelfer.to give.an illustration of a policy adopted

by the Commission that is in question now relative to its inclusion in a

State-wide Land Use Plan.

Mr. Keifer said there was a whole "litany" of recommendations in the Land

Use Report on development, transportation and highway policies. He asked, what

indeed, is the policy framework for that State Land Use Plan. Is that policy

framework for that plan the policies that have already been adopted by this

Commission.

Mr. Weiner said Mr. Keifer discussed somethings in terms of configurations.

Mr. Weiner wanted to know: what kind of configurations. In other words, when

the plan is completed, will it show where to build a new town?

f-.1r. Keifer said that it was the general view of the planners present at

'conceptua
the meeting thatJ, Ily we were almost forced to think at the level of

the New Castle County District Study.

Mr. Biondi said that Mr. Weiner is addressing himself to questions that,

at some point, are goin g to be critical. However, he pointed out that nobody

present at his meeting told Mr. Keifer to "go to hell". Mr. Keifer agreed that

there was a general spirit of cooperation. He said no one present indicated

they would not be willing to participate'or that it would be an impossible task.

Senator Berndt noted that the U. S. Government reserves certain powers

and says that those powers they don't have belong to the State. He asked if

De laware is goi ng to 'do-this to-the Sub-units of government within the State.

Mr. Keifer said that his understanding of what the Commission adopted

last week was for them to come up with some kind of plan that-would incorporate

the land use planning, that is traditionally the responsibility of the local

governments, with the "quasi" land use planning done by the State government,

particularly through'Secretary Bryson's regulatory programs, along with the

capital investments and related sorts of things that the State government

traditionally does.that has an influence on land devel.opment, come up with a

plan that incorporates all of. those and some implementation process that would

orchestrate the implementation of all those regulations and laws by the levels

of government that currently administer them. No one unit of government could

unilaterally make a decision that would upset the plan. There would be no

coersion and the "turf" would not change substantivel.y from the way it is now.

No one unit of government.could unilaterally change the plan or make a decision

in violation of the plan. The pl.an would probably be changed annually through

some monitoring process. Mr. Keifer said this was his view of what the

Commission was asking them to do.

Mr. Keifer also noted that the feeling at the meeting was that there were

other governments who should have been invited but were not Newark., Dover and

possibly some others. Mr. Biondi suggested that the members of the Delaware

Tomorrow Technical Advisory Committee might be a good bas.is of, people who should

be involved in this plan.

Mr. Biondi noted that the time frame (May 1, 1976) seemed to be more

acceptable in New Cast le County than in the lower two countiesi Mr. Keifer

said this was true mainly because of the status of certain projects that are

already underway.,

Mr. Weiner sa,i.d he does not understand the nature of the kind of plan

they are talking-about. He said that what he feels the Commission is looking

for is the broad policy outlined in a State-wide plan, which would help us to

deal with very broad issues not the definite deci-sions which were to be left

to the local juris dictions. If they sald'that it will be,, infact, a broad

brushed overall approach to the planV then Mr. Weiner could understand it.

If that is not what this group meant, then he can see that they will have

difficulty getting the plan adopted by May - or getting it before us by May..

Secretary Bryson explained that we have,some court suits pending right

now that are going to decide quite a bit on what is.put into the State-wide,

Land Use Plan concepts. One of them is on water allocation.

Mr. Biondi read the resolution adopted at the last meeting relative to the

development of the State-wide Land Use Plan. He said that was the general

principal agreed upon, however, he felt it would take a while to figure out the

specifics of what the Commission really wants.

Mr. Larson said that if this group is going to do nothing morethan make

a composite of district-type plans, then it's not worth the time.

In terms of financing this venture, Mr. Keifer said their assignment was

to come up with something by the end of this.month in terms of,how they will

accomplish this task.

Mr. Biondi saidthere was an open issue, raised by Mrs. Slights, that the

Commission never considered that.was in the,Land Use and Community Development

Addendum of May 15, 1975, was a sentence that reads: "The'Committee further

agrees interim legislation dealing with lightering, aquifer recharge and.

tributaries, should be considered immediately". Mir. Biondi said he thought

we knew what the lightering legislation is all about - the regul ation of

lightering as it presently takes place in the Bay. Thereis some disagreement

as to who ought to do the regulating. However, Mr. Biondi said he wasnit

sure what was meant-by legislation dealing with aquifer recharge and

tributaries.

Mrs. Slights said her understanding,of this,statem.ent was the concern

in the Engineer's Report that aquifer recharge and tributaries be designated as

are as of critical concern.

Mr. Biondi felt this was part of the Lan'd Use Plan and would,be covered

in the planning area. This statement does not require legislation.

Mr. Weiner felt that the interim I egi slati on dealing with lightering does

call for some action, because it may pose some threat to the environment.@-On

the issue of aquifer recharge in the tributaries, he felt we should wait until

we get a,n overall State plan and see what is of critical.concern and what is

not, because the present knowledge of aquifer recharge is poor and this is one

of the things that should be addressed.

Mr. Weiner asked if we need interim legislation on lighterlng?@ Secretary

Bryson said hot necessarily, however that,doesn't mean we shouldn't have some

control in the future.

Mr. Weiner movedthat that sentence in the Addendum be strlcken@ He moved

that the Commission not support taking positive action supporting that

recommendati on. Mrs. Slights said she would support Mr. Weiner's motion with

the under-standing that the aquifer recharge and-the tributaries will be dealt

with and that we are not, by striking this paragraph, striking the idea.

Mr. Biondi agreed to state that this subject will be dealt with in the

context of the plan.

In closing, Mr. Biondi delegated the following tasks to be accomplished

prior to the next meeting of the Commission:

1. Mr. Oldach was asked to take the responsibility of calling a meeting,

of the Economic Development Committee on the issue of separating the

concept of population growth and economic growth, as stated in 1. A

of the Summary.

2. 114r. Krieger was instructed to call a meeting of the Cost of Public

Services Committee to discuss the letter and attachment from Mr. Webb

to Mr. Biondi, dealing with 1. B of the Economic Development Summary.

.(The meeting was scheduled for Monday, July 14). Mr. Biondi further

requested that this Committee discuss the four questions raised by

the Economic Development Committee on pages 8 and 9 under Ill. B

1-4. and report back to th e Commission with an idea on what data is

available.

3. Mr. Biondi asked that the entire Commission give some thought as to how

the Com6ission should state their approach to the question of growth.

Mr. Gilliam asked if anyone has looked at how otheristates have handled

projections in the area of growth? Mr. Keifer said that they all have projections

of some sort, however, he was not sure how they handled the government finance

part. He agreed to check further Into this matter and see.how other Commisslions

similar to Delaware Tomorrow have approached these questions.

The next meeting of the Commission has been scheduled for Wednesday,,

July 23, 1975, 4:00 p.m., at Wilton Community Center.

Respectfully submitted,

Dee Burkley

I ...........

STATE OF DELAWARE
DAVID R. KEIFER PLANNING OFFICE PHONE: (301) 678-4271
DIRECTOR DOVER
Ref: 10,07/1404 July.29, 1975

DELAWARE TOMORROW COMMISSION
MINUTES,OF MEETING OF JULY 23, 1975

A meeting of the D elaware, Tomorrow Commission was,

held on Wednesday, July 23, 1975,..at the Wilton Community Center.

The following members were present:

Mr. 0. Francis Biondi.,,Esquire
Mr. David R. Keifer
Mr. Frederick.G. KrApf, Jr.
Mr. Carl S. Oldach
Mr.'Jay N. Cooperson
Mr. Leon N. Weiner
Mr. Joseph Golden
Ms. Dorothy Gre 'er
Ms..Joann D. Slights
Ms. Marcie Bierlein
Mr. Ross E. Anderson, Jr.
Secretary John D. Daniel'lo
Mr. Richard Bauer (voting proxy for Mel Slawik)

Also present:

Mr.* Nick Fisfis
Dr. William Markell
Dr. William R. Latham, III
Mr. Spencer Thompson
Mr. Arthur H. Krieger
Ms. Peg McClane
Ms. Jane B. Aughey
Mr. Bernard Dworsky
Ms. Merna Hurd
Mr. Steve Chamberlin
Mr. William Bradford

Chairman Biondi called the meeting to order at 4:30P.M.

He read an excerpt from the minutes of the July 10 meeting, in

which he delegated several assignments to be accomplished prior

EXECUTIVE DEPARTMENT W
SHERMAN W. TRIBBIYT
GOVERNOR DELAMRE

-2

tothe next Commission meeting. These are as follows:

1. "Mr. Oldach was asked.to take the responsibility of calling

a meeting of the-Economic Development Committee on the issue of

separating the concept of population growth and economic growth,

as stated in I.Aof the summary.?'

In response to this request, Mr. Oldach notedthathe had spoken

to Mr. Thompson and several members of the Economic Development

Committee and it was agreed that in the use-of the word "growth"

in this report, they were referring to population and employment

growth.only. He noted the following changes to the report to

clarify this,issue.,

Page 1, IA. The high rate of population and employment growth

in Delaware .........

Page 8, IIIA (a) that.the State can obtain general agreement on

goals for populat.ion,and employment growth;,

Page 8,IIIB In order to establish a reasonable goal for future

populationand employment growth rate

Page 9,1 IIB3 Will future p opulation growth in the State cost,....

Page 9,IIIC The Delaware Tomorrow,Commission shouldlestablish

population and employment.growth goals ...........

Page 9,IIID. ....the Economic Development Committ .ee believes some

continued employment growth within the State ........

Page 13,
Part I Change in Delaware's Rate-of Population and-Employ-

ment Growth

Page 13
Part I, Between 1950 and 1970 Delaware experienced one of the

-3-

fastest population growths .........
Mr. Oldach said he felt the rest of the report was self explana-

tory. Mr. Biondi said.that, from the Chairman"s point of view,

these amendments clarify the intent of this report.

Mr. Biondi asked Mr. Weiner if these amendments answered

the questions he raised the last Commission meeting. Mr.. Weiner

said his questions were answered and that using the word "employ-

ment" rather than "economic" pinpoints.further the issue being

addressed.,

A motion was made and seconded that the amendments to

-Mr Oldach
the-,Ec;onomic Development Committee Report cited by

be adopted by the Commission. This was agreed to by all present.

Mr. Weiner asked for clarification of paragraph C on

page 9, the phrase ...... such things as internal population growth

vs in-migration ....... Mr. Biondi said that, at the last meeting

it was stated that the phrase "internal population growth" was

meant as a. contrast to "in-m igration" and there were no policies

.being recommended with respect to the internal population growth.

Mr. Bradford suggested substituting the word "considering" for

"including" so as to read goals considering such things as

It.was moved and seconded that Section III C be amended

to read: The Delaware Tomorrow Commission should establish popu-

lation and employment growth goals considering such things as in-

ternal population growth vs..,in-migrat,ion, type and amount of new

businesses desired, and a forecast of the resulting changes in
State income and'expenses.

-4-

Mr. Biondi said that the minutes'from the July 10

meeting further state:

2. Mr.-Krieger was instructed to call a meeting of the

Cost of Public Services Committee to discuss the letter and attach-

ment from Mr. Webb to Mr. Biondi,.dealing with I.B of the D Summary.

Mr. Biondi further requested thatthis Committee discuss the 4

questions. raised by the Economic Development Committee on pages 8

and 9 under III.B.*1-4 and report.back to the Commission with an
idea on what datals available.".

Mr. Biondi asked Mr. Krieger if his Committee had, indeed,

met and discussed the changes which had been suggested by Mr. Webb

in the report of the Economic Development Committee on'Page2 and
3. Mr. Biondi said it was -suggested that I B. be changed'to read:

"Delawarels tax situation changed."
Mr. Webb also suggested that B. 1. be changed"to read:
"Public bor'rowing'to'finance therapid expansion of government

services expanded rapidly." He'further suggested'that I. C. be
changed to read:.." the cost of past long term borrowing (debt
service for interest and principal repayment) has increased in
dollars significantly. However, as a'percentage of annual'total
General Fund Disbursements, it peaked in 196l.at 20%., declined to

18.1% by 1968 and further declined to 15% for the year beginning

July 1, 1975 (FY 76)."

Mr. Krieger said that the Cost of Public Services Committee
met on'Monday, July 14. He saidthere were two attitudes towards

Mr. Webb's letter:

1. Some Committee members felt that the wording of

-5-

Mr. Webb's letter be adopted as suggested.

2. Others felt that they might object to the sug-

gested revisions.

Mr. Krieger noted that Cost of Public-Services Committee members

generally resented several remarks and the tone of Mr. Webb's

letter.

Mr. Biondi said this, letter rep resents oneman's view

and certainly not the view of the entire Commission.

Mr. Krieger said that the viewpoint of@the Cost of

Public Services Committee was that they would not object to the

changes suggested by Mr'... Webb. Mr. Biondi said he was particular-

,ly concerned about stating correctly whatever
the cost of,debt

service,is in the State. He said we areborrowing more money than

we have ever borrowed before in interest expenses. Apparently,

however, the size of the State budget is growing faster than those

interest.expenses and if you are going to talkabout it in terms

of a percentage of the State budget, itis not rising in terms of

the State Budget that was not technically correct.

Mr. Bradford said that, in connection with the attach-

ment "Debt Service Percent of General Fund Disbursements", the

bonded debt column is outstanding.. He said figures-that the Cost

of Public Services Committee have been using is outstanding plus

authorized. Therefore, these figures,.while they-are not involved

in the co-mputations that are made as debt service, are nevertheless

misleading in that there have already been bond authorizati on bills

passed, which if issued, would be in excess of this amount. The

point Mr. Bradford expressed was that, if the figures in the report

-6-

on Bonded Indebtedness are ever to be used, he thinks they

will be in conflict with the figures shown in the Cost of

Public Services report.

Mr. Biondi noted that in B.I (c), the comment "It

now amounts to over 10% of the State.'_s budget and is rising", is

simply incorrect. In fact, in 1973 it amounted to 14.8% of

,.the State budget, but because of the tremendous increases which

are tak ing place in the State budget, as a percentage of General

Fund disbursement, it is decreasing. Therefore, Mr. Biondi

said that this statement is incorrect and should be eliminated

from the report. He said we then get to the substantive question,

of what framework should the cost past borrowing be addressed in-

should it be related to th e State Budget, per capita, or other

crit eria. He suggested-that.the last sentence in B.I. (c) be

eliminated.

Mr. Anderson suggested that B.I. (c) be amended to

read: "The cost of State borrowing (debt service for interest

and amortization) has caused a significant increase in current

revenue requirements."
Mr. Biondi suggested the following revisions to Section

I.B:

B. Delaware's tax position has changed.

1. Public borrowing to finance the rapid expansion

of government services has expanded rapidly.

a) same

b),. s ame

c) The cost of State borrowing (debt service

-7-

for interest and amortization) has caused a

significant increase in current revenuerequire-

ments.

Mr. Weiner questioned the term "fiscal acceptability."

Mr. Webb noted that the absolute ceiling on the amount of money

th at can be authorized, under capital programs, is 2.8 times the

revenue for the preceding 12 mon th period. The source of that

limit is an act by the General Assembly. Mr. Webb said that this

may be some thing the Commission would like to comment on.. The

ceiling for this FY was $1,043,000,000 - that is the statuatory

limit. Mr. W einer pointed out that we. have a bonded indebtedness
of about $,500,000,000 - less than 50% of the statuatory maximum.
He stated that he questioned the.question of fiscal acceptability.

Mr. Webb said that one of the three criteria for a

government to be in fiscally responsible condition, as.far as its

operating budget is concerned, is that its debt service cost is

not to exceed 18% of operating revenue. Delaware was in exces7, of

a reasonable, fiscally sound level, from the period 1960-19.65.

Mr. Weiner said that the Delaware Tomorrow Commission

Report will be read by Industries, employers, and.the public - some

looking to settle in Delaware and make this their home. If we

say that our public borrowing has approached the upper limits of

fiscal responsibility we have done,a disservice.

Mr. Biondi then suggested that B.I. (c),be amended to

read: "The cost of past borrowing (debt se rvice for interest and

amortization) has caused,a significant increas.e in current revenue

requirements although it has declined-as a percentage of general

-8-

fund disbursements since 1961.

Mr. Thompson pointed out-several things he noticed

when he wrote the Economic Development summary. The per capita

debt, just from 1968 to 1973, State and local, has gone up from

$57 to $78. The debt increase, in the last 20 years in Delaware,

has been so rapid that Delaware can't sustain that sort of in-

crease in.the next 20 years. He agreed to accept B. I. (c) as

amended by Mr. Anderson, however,.he felt the Commission should

recognize that there is a problem that we have.financed a lotof
the growth,in the last 25 years with the rapid expansion of our
debt- we can't continue this in the next 20 years without being

irresponsible.

Mr. Oldach said that part of the thought that was behind

Section B is that the fiscal crisis in Delaware has been a cause

for concern with industry. These fiscal crisis were the result

of the cost going up rapidly and a scramble to try to raise the

money to pay it. He said it might be helpful to add a Section B.I.

(d) which states: "Some of these increases have.been reflected in

fiscal crisis which have been a concern to industrial management."

Mr. Biondi said that there were some decisions made

during the period 1968-1972 where the State took over the obliga-

tion of the County with respect to some important services. That

was a shift from a local to a State base of those expenditures..

Because the State had to pay for those, to pinp oint the years

in which that took place as the years around which the State's.

attractive.low tax position came to an end, is an oversimplifica-

tion of the problem. Mr. Biondi said that is why he would like

to delete any reference to a specific year.

Mr. Anderson then suggested Section B be amended to

read: "Delaware's tax position has changed in recent years.11

'Mr. Weiner felt that the point needs to be made that we

are concerned about economy in taxation, effective, fair taxation,

etc; however, he thinks that if we are trying to make the point

that something has happened in recent years, that puts us at a

disadvantage with other States - that we were wrong. He feels

,that weneed some adjustment in the way we are doing -,the internal

tax raising- but not the totals.

Mr..Thompson.explained the Committee in writing this

Summary was trying to look at the 20 year period to see the kinds

of changes that have taken place over that period and then try to

look ahead to the next 10 years to see, if those trends continued,

what the impact would be. The Economic Development Committee's

impression was that Delaware's relative tax per capita has gone up

over that 20 year period more than just would be indicated by the

amounts that are seen when you look at 1960-1973. He further pr)int-

ed out that theCommittee was concerned with the thrust of the caxes

that had taken place in recent years in terms oflits impact in
bringing new industry-into the State. He said that is why the date

1970 was chosen- because of the thrust of the recent taxes in terms

of the impact it had on the industrial community-

Mr. Weiner agreed that.the thrust and direction of the

taxation that we have needs to be re-examined to make it a more pro-

gressive, rather than a regressive tax policy, however, he would not

like to see the generalization that Delaware has gone downhill with

regard to other States.

_10-

Mr. Biondi suggested looking at Section B from another

frame of reference, changing it to read: "The fiscal burden of

State Services has increased substantially in recent years." The

reasons for this are spelled out in B. 1-4.

It was moved and seconded that Section B be amended to

read: "The fisca 1 burden of State services has increased substanti-

cally in recent years." This motion was approved by all present.

Mr. Anderson moved, that B.I. be amended to read: "Public

borrowing to*finance govern ment services has expanded rapidly."

This motion was seconded and approved.by all present.

'Mr. Anderson moved that B. I. (c) be changed to read:

"The cost of State borrowing (debt service for interest and amortiza-

tion) has caused a significant increase in current revenue require-

ments." This motion was seconded and agreed to by all present.

Mr. Biondi suggested that a Section B.I.(d) be inserted

so as to read: "One of the'causes for the expansion of public borrow-

ing has been the assumptions by the State, of services which were

previously funded on a local basis." Mr. Thompson felt this was

not a large enough issue to be put in writing.

The original Section B.I.(d), which read, "Additional

borrowing faces increasing political resistance," was del eted from

this report at a previous Commission meeting.

Mr. Oldach suggested adding an Item B.I.(d), which would

read: "Fiscal crises have occured recently partly as a result of

the State assuming local service costs., which has been a concern

to industry." He felt that the recognition that the crises caused

concern is just as important as whether we are fiscally responsible

or not.

Mr. Biondi said that he felt that the public's defini-

.-tion of a "fiscal crisis" is a little unrealis.tic.. He said.that

everytime we have to raise taxes it is labeled as a fiscal crisis.

He said that the fact is that Delaware has been able to pay our

bills without dramatic changes in the tax structure, either in

the form of tax or the rate of tax--with one exception--the income

tax rate.

Mr. Biondi clarified the point Mr. Oldach was making.

He said we don't have a sales tax in the. State at the present time;
a State
we don't haveAtax on real property; however, if each year there

is a "fiscal crisis." and if there is a.history of this, industry,

although they may be satisfiedwith the present tax posture, does

not know what will happen n ext.

Mr. Webb suggested that B.2 be amended so as to read:
"2. In line with proper fiscal practice, deferred expenses

must be met out of current revenue.

a) The cost of pensions for State Employees has risen

from 3% of payroll in 1950 to 18% of total gen,:@ral

fund payroll in FY 76 (partly to cover unfunded
past service liabilities in e xces,s of $200,000,000

over a forty year period beginning with FY 76.)

Mr. Biondi said he would not@agree with the first part of

this, because we are trying to describe the problem. Mr. Webb is
saying that in line. with-proper fiscal practices incurred expenses
must be met on 'current revenue. The thrust of Mr.- Thompson's state-
ment is that we did not., in the past, make allowance for these expen
ses. They were deferred and they must now be met out.of current

revenue.

-12-

Itwas moved and seconded to leave B.2 as written

so as to read: "Deferred expenses must now be met out of current

revenue," and to amend B.2 (a) as suggested by Mr. Webb, so.as.

to read: "The cost of pensions for state employees has risen from

3% of payroll in 1950 to 18% of total General Fund payroll in FY

1976 ( partly to cover unfunded past service liabilities in excess
of $200,000,000 over a forty-year period.beginning with FY 1976.)

This,motion was agreed to by all present.

It was agreed to accept B.2 (b) as written.

On Section B.3, Mr. Biondi asked if there has been an

impact on the capital budget of the State,by the State taking over

these other servlices. If so, it ought to be stated here. Mr.

Keifer said the impact has not been significant. Therefore, every-

one present agreed to accept BA as written.

.Mr. Biondi felt that in Section B.4 there was some

problem with the date 1970.. Mr. Webb felt that 1969 would be more

accurate, as that was the first of a series of tax packages. The

pointbeing made is that the thrust is that the taxati on mix has

increased substantially.

It was moved and seconded that B.4 be amended to read:

"Since 1969, individual income and capital gains tax rates have

been increased substantially." This mot ion was-approved by all

present.

On Section B.4.(a) Mr. Biondi noted that we have not

lost our total competitive advantage over other States with respect

to location and other things. Therefore, he suggested amending

4 .(a) to read: "Delaware has lost a competitive advantage.over

-13-

other stdtes.',' It was moved,and seconded that this suggestion
be adopted. This motion was agreed to unanimously.

In B.4.(b), Mr. Biondi.felt that instead of talking

.about revenues, we should be talking about levies.

Mr. Weiner noted that on a per capita income basis,

Delaware is, today, better than we were in 1960. Mr. Weiner then

suggested striking the word "now" from B.4--(b).

Mr. Thompson said that Delaware's rank for State and

local taxes on a $1,000 per capita income for 1958-1959, we rank-
ed 50th. Now Delaware ranks 35th, so our relative position has

declined in the last 15 years.

Mr. Biondi said that the whole purpose of saying.that

Delaware is now about average is to indicate that we cannot go

around selling Delaware as a nice, low,tax State to come to.

Mr. Weiner expressed concern that the Delaware Tomorrow

Commission Report address all income brackets - not only those in

high income tax brackets that have capital gains concerns.

Mr. Krapf moved,that BA (b) be amende d to state that
has
"'DelawareAgone from alState that hadthe best, to relatively g,-)od,
to 35th." Mr. Bradford po inted out that those figures are not

based on per $1,000--there is a difference..

Mr. Biondi moved that Section B.4.(b) be amended so as
to read: "It's total State and local tax revenues, on a per $1,000

of income,have increased so that we are now above average for all

States, whereas. we were the leader.

Mr. Thompson felt that the issue was getting lost. He
said that the average is $1.20 and Delaware is,$115. Back in 19.58
the average was $85 and Delaware was $55...Mr. Biondi agreed and

-14-

Moved that B.4.(b) be amended to read: "Total State and..

localtax revenues on a per capita income basis, are about average

for all States, whereas 10 years ago we were the leader." This

motion was seconded by Mr. Keifer and agreed to by all present.

The Commission went on to discuss the 4 questions raised

in the Conclusion on Pages 8 and 9. The Cost of Public Service

Committee was asked, at the last C.ommission meeting, to look at

the 4 questions raised, in the context of what data is available

and what can be said in response to those questions. The four

questions areas follows:

1. How much of thepresent debt and, the related debt

service was incurred to finance the post-war growth

in the State?

2. Are there latent costs of that growth which have not

yet appeared in the current expense budget of the

State, such as, some of the cost needed to bring

Delaware's highway system up to-date or to expand

hospitals and prisons?.

3. Will futu re population growth in the State cost relat-

ively more in relation to per capita income than the

cost of our recent growth? Could the cost.of this

growth be minimized by effective planning?.

4. What would be the relative benefits and liabilities

of bringing in to Delaware and into different locations

within Delaware) different types of businesses with

their varying service requirements, job requirements,

income contributions, environmental impact and related

considerations?

-15-

In this regard, two separate reports were prepared; one by
the Delaware State Planning Office staff and the other by

Mr. Arthur Krieger and his staff.

Mr. Biondi first discussed the Delaware State Planning

Office report entitled:."Operating and Capital Cost Projections

,Delaware State and Local Governments 1973-1985." This report

was distributed to everyone present.

Mr.' Keifer explained that the Cost of Public Services.

Committee met on Monday, July 14, discus,sed the issue and did not

resolve the issue.then. Mr. Krieger, Dr.Latham., Mr. Keifer, and

s,ome Delaware State-,@Ianning Offi.ce,staff;members met again on

Wednesday, July 16 to try to come to grips with some of the ques-

This paper was produced as an attempt to get at the problem

freely admitting that this does not totally answer thequestions.

Mr. Keifer went through each Table, explaining them

briefly, starting with-Table V.I (6). He said that they.felt the

thrust of the questions raised by the Economic Development Committee

were (1) can we afford the kinds of growth that we think seem like-

ly, or (2) willthat level of growth present some undue;burden on

the taxpayers of the State, in terms of financing. They assumed

a population of,700,000 in 1985., which has been more or less agreed

to. They used 1973 as the base year because that was the last year

they had in the original Co st of Public Services report. They,

very simplist ically, assumed that the per capita operating costs,

for 1973, would remain constant til 1985. They ran those out based

-16-

on multiplying them all by 700,000 to obtain the operati ng

costs, in terms of Table VI. That is the categories beginning

with Education down through General Control plus All Other

(operations). There was some data on Pensions in the Cost of

Public Services Committee Report. Based on that data, they
assumed that,$35.4 per capita in 1973 would remain constant.

That is how they came up with the second column of Table VI. On

debt service, they went-through an analysis, that actually makes

up the first 5 tables of this report, getting an overview of

what the exis ting debt of the State go vernment is. They calculat-

ed and analyzed the existing debt of the government. They made
some. judgements as to what the likely capital improvements of the
state government would beessentidlly by agency, to service a

population level of about 700,000. They.attempted to gather data
from New Castle County and the' City of,Wilmington on their 'exist-

ing debt and their capital improvements plans. They obtained some

data from Wilmington, however, they were unable to obtain any data

from New Castle County so they made some assumptions to cover that.
They then forecasted out what amounts.to a capital program. The

bottom line worked out to be 40 million dollars for the State and

15 million dollars for all locals combined. They held that constant

in 1973, ran-out the debt service on that-assuming 20 years general

obligation bonds at 6% interest; calculated the debt service to pay.

that off, added on the retirement shcedules for all of the existing

debt, and came up with the debt service numbers in column 2 of

Table VI. Then, in order to get these figures into 1985 dollars,

they applied 8% compounded to the 1973 numbers in column 2 to come

-17-

up with the 1985 numbers in 1985 dollars in the third column.

Mr. Keifer explained that they did not address reven--

ues in this report. However, the expenditures.levels in this

report, are not too far off from the projections that Dr. Latham

did in his report on "Revenue and Expenditure Projections" (dis-

tributed at a previous Commission meeting), where he made certain

assump,tions.about'the growth in revenues. Dr. Latham's assump-

tion of about 5% a year fro inflation comes ou t to be not too

far off from their expenditure projections.

Mr. Keifer said that the bottom line on all of this is

that, if the Commission decides to accept their,assumptions, then

the expenditure side is not unreasonable given the projections of

revenues.

This report was discussed briefly prior to the Commission

meeting, with some of the members. The Cost of Public Service

Committee and Mr. Keifer felt they had general consensus on the,

procedures used and assumptions made.,

Mr. Keifer noted that these projections were based on

the assumpt ion of no change in the level of service per capita,

no changes in programs.

In order to reflect the change in populatlionfrom 500,000
to 700,000 they multiplied 700,00.0 times the 1973 per capita expend-

itures. Then to get from the 2nd column which was in 73 dollars

to Column 3 in 1985 dollars, they ran an 8% compounded.

Mr. Krapf noted that the only thing that can be argued

is if they used the correct percentage (rate of inflation) number.

Mr. Keifer said that is why they listed 1973 dollars as well as

1985 dollars and tried to keep everything as simple as possible.

Mr. Keifer said this table als'o says there is no penalty

for growth, up to 700,000 accepting their assumptions on the

Capital facilities $40,000,000 per year). This report says

that this is probably fairly close to what is needed on an.annual

average basis, if the population increase is located in accordance

with the policies already advocated and adopted by the Delaware

Tomorrow Commission.

Mr.Weiner expressed concern that the total figure in

column 3 of Table VI might be distorted, since without comparable

salary figures, it appears frighteningly large. (to the average

citizen).

Mr., Webb said that historically general fund revenue

increases are between 7% and 8% a year, so between now and 1985

we are looking at about $900,000,000 in revenue, even with no

increases in taxes.

Mr. Biondi asked if this Table says that the Commission

can safely recommend a growth policy at the level of 70.0,000 over
the next 10 years - that the State can afford it? Mr. Keifer says

that is about what they are saying.

Mr. Thompson said that, as he understands the Table

and Mr. Keifer's explanation, they have said.that t hey really can

not answer the questions. Mr. Biondi said that perhaps, then, the

questions should be stricken.

_19-

Mr. Thompson said if they cannot answer the question,

we ought to recognize that we are going forth a little blind on

this issue. We don't know how much of the present debt and related

debt service was incurred to finance the post war growth.

.Dr. Latham felt that the point this report makes is that

the response has been such that enough physical capital has been

provided so that a nother 100,000 people can be handled without undue

pressure on the budget.

Mr. Biondi no ted that they were saying that the principal

expenditures are for highways and sewers and that they are current-

ly under construction or in the planning stages and have the capacity

of in excess of 700,000 people. There. will be relatively zero

demand for new school construction.

Mr. Webb pointed out that these projections were not look-

ed at programmatically. Mr. Keifer said that was impossible to do

in one week. Mr. Weiner said that the Planning Office had done "a

hell of a job." considering the time constraints.

Mr. Bradford said that we have only half the data requir-

ed to support the assumptions. He suggested that similar data be

compiled for revenues in addition to expenditures..

On the question of whether or not the four questions

raised in the Commission Report should be stricken, since they

can't be answered. Mr. Keifer said that in light of the Statewide

Land use planning exercise agreed to by the Commission, to be com-

pleted by May 1, he felt that by then they should be able to produce

answ ers to these 4 questions. He felt that they are valid questions

and should be answered.

Mr. Weiner wanted to know what was the punpose of answer-

-20-

ing the questions.

Mr. Biondi said we are dealing with the report of

the Economic Development Committee and the issue now is what

portions of their report will be accepted by the Commission,

There are specific questions that are up to the Commission to

answer and make recommendations. He said the Commission has

to be engaged in dealing with the substantive q uestions raised

by that sectionof the Committee report.

Mr. Thompson said the 700,000 population projection

for 1985 assumes an in-migration, however, this in-migration

is substantially less than was realized in the last 20 years.

The Commission has to face the issue of: is that a reasonable

goal to set - to have relatively lower level of in-migration in the

next 10 years than we have in the past 20 years,
Mr. Biondi said that in the Economic Development@ Com-
mittee Report they continuously refer to the fact that in the

period between 1950 and 1970 Delaware's populationand employment

growth was twice the national average. Since 1970, it has fallen

to the national average and the national average has fallen., If

we can just maintain pace with the national average and provi de

the number of jobs stated in the report, we will have enough jobs

to support the natural growth in the existing population plus

some small in-migration. Mr. Biondi said that he has been assurn-

ing that the 700,000 population figure relates to t hat perame,ter

of economic and population growth. He asked if the report now

being discussed, in addition to revenue figures, projected to 1985,
will indicate that we can afford that rate of growth without

-21-

strapping ourselves anymore than we are at the present time? The

answer to that question is yes. How much more growth can we

afford at what cost, if we want arate of growth which is more.than

merely enough to satisfy thenumber of jobs we will generate inter-

nally, plus a small in-migration.

Mr..Krapf said that was the question in his mind: "If

it is only a mathematical number'to go to 700,000 why can't we

go to 800,000 or 1,000,000.

Dr. Latham said that Mr. Keifer did not mention some of

the numbers behind this report, one of those being the figures
on school age population. Mr. Fisfis's@aid that we had 1@5,000 at"

our peak; we are down to about 125,000, we will bottom out at

about 100,000, then when we have 700,000 people, it is projected

we will have 135,000 school age children again - which will bring

us back to our capacity. Therefore, Dr.,Latham. said that this

report says if we want more than 700,000 people, we will have to

expand the capacity of schools, then the projections are no longer

valid and the per capita costs start to rise more rapidly.

Mr. Weiner said that since we agreed on 700,000 as aii

arbitrary figure and understand that this is 3ust "for instance"

then we can begin answering the four questions in the Economic

Development Report. The answers in Mr. Keifer's report are not a

response to those 4 questions and Mr. Weinerfelt that even when

we have a Statewide Land Use Plan the questions will not be answer-

ed.

Mr. Weiner went on to say that these questions go into

-22-

depth to question the assumptions that are made. They made

the assumption that the cost per capita, for 100,000 to 125,000

more population, assuming the level of,services to remain the same,

will continue in a straight line curve. In order to answer the

first question asked on page 8, B.I., there are several important

characteristics to take into account: 1) you have an rapidly

expanding population with tremendous geographical spread and you

are playing catch up. 2) Are there latent costs of that growth

that have not yet appeared have.we finished playing catch up?,

3) will the future growth in the State cost more in relation to

per person income.

Mr. Weiner said there are a whole series of hypothetical

questions that have to be outlined. He said the fourth.question

is a little easier to answer because you are deali ng with the

physcial and the question of facilities that already exist. He

said that those 4 questions, unless the.Commission is willing to

work for the next 6 months or year, are not going to be answered

by us- not in the fashion that we would want to put our name on.,

Mr. Biondi asked Mr. Weiner how the Commission should

answer III-C. on page 9 which says: "The Delaware Tomorrow Com-

mission should establish population and employment growth goals

...... . Mr. Weiner said the Economic Development Committee, in

Part I, have already.done that. He said he is willing to accept the

series of figures put together in their report.

Mr. Biondi asked Mr. Weiner if he was then saying that the

population and employment goals to be established by the Delaware

Tomorrow Commission should be those which are consistent with the

-23-

job growth goals spscified by the Economic Development Committee

on a population of 700,000 for the year 1985. Mr. Weiner said

he-would be willing to accept them for the next year, however,

he did want-to look at them again in a year.

Mr. Bradford felt that the first two questions on page

8 have, in essense, been answered, in that we have said that the
examinations of the debt service, to a point, indicates'that

"catch up" is pretty well in the planning pipeline. Therefore,

the answers to question 1 is less relevant to question 3and 4

than they were when they were,asked. However, Mr. Bradford felt

that que,stions 3 and.4 need.further consideration by the Commission.

He asked if it was the intention of the Commission to produce at

this point in time a report which makes recommendations over a

10 year period or to set forth one level of growth., which is almost

non-growth and raise the questions that.have to be answered (3 and

4). He asked if this Commission is, in a position to make a final

recommendation as to growth over ten years at this point?

Mr. Weiner said that planning is,a constant,process.

He reads the report Ito say we want some.growth, a fair amount of

growth, we want growth in certainareas; we want.growth that will

recognize the need to cluster ourcommunities, as well as to bring

in growth that will provide jobs. However, he feels that you can-

not every make a projection that will stand up for 10 years. Mr.

Bradford said that was the exact point he was trying to make.

Mr. Thompson said that the Economic Development Committee,

in these Job and population projections, assume a lower rate of

growth in the next 10 years, than we have had in the last 20 years

-24-

by a substantial margin. The Commission has to answer the

question: is that acceptable? He went on to say that the popula-

tion in Delaware is going to change in the next 10 years just from

the people who are already here. That population will generate

a larger work force than now exists in the State. The percentage

of people working will be larger 10 years from now than we have

now, whether we have any in-migration or not. Therefore, we are

going to need more jobs just to provide for that change in the

demographic make up of the population. In addition, they thought

there would besome in-migration just to take care of industry

that is already here.

Mr. Biondi asked Mr. Thompson if the rate of growth

which is suggested by the job numbers and the Cost of Public Services

Committee, a 700,000 population projection- isn't that a base rate

for economic growth, or a minimum rate which we must afford? Mr.

Biondi said it is substantially less than we have had. It wi 11

provide only 50,000 more new jobs. Mr. Biondi felt that the Commiss-

ion must identify that as A base or a minimum rate of growth which
must be afforded, we have tochange economic and tax policies in the
State to see that we meet it, and then we must go on, on a year to

year basis, looking at our assets and liabilities and what our

costs are of growth beyond that.to see how we will deal with it.

However, this seems to be a framework of a minimum or base rate of

economic growth which must be afforded.

Mr. Thompson said he agreed to that view in the sense that

the 700,000 projection is pretty close to a no-growth pattern, as

compared to where we have been in the last 20 years. There is just

enough growth in.it to provide the margin of jobs -for the people

-25-

in the State. It will.require s ome in-migration to support that

just because you may not have all the technical background yot.

may need in the existing population to take care of existing jobs.

Mr. Biondi said, looking at the total, figure in Column 2

of Table VI, are not we saying that we have to afford this rate

of growth and to go beyond this rate of growth and to stimulate

more growth, we.had better get concrete answers to these four

questions and other questions which have been raised- in this

Commission about the cost of growth.

Mr. Thompson said he did not think we have faced the

fact of what growth has cost us in the past 20 years. He has the

feeling that our highway system has deteriorated in the last 10

year or 15 years. He doesn't know what it would cost us to get back

where we were 10 years ago or whether we need to go back to where

we were 10 years ago. That question is not answered by the data

@given to the Commission today.

Mr. Biondi asked Mr. Thompson what rate of growth he

thought we should achieve in Delaware in the next 10 years. Mr.

Thompson said he is a low growth man- he would not recommend the

kind of growth we had in Delaware in the last 20 years. However,

he wanted the Commission to understand that these figures represent

a change. He said he would not recommend a lower rate of growth

than the suggested 700,000, however, he would notrecommend a much

higher rate of growth than that.
Mr. Kriegernoted that, in addition to Mr. Keifer's

report, he has another report which backs up and substantiates

Mr. Keifer's figures and on those schedules you can see that they

-26

have attempted to develop the numbers of what it would cost

for the growth per capita. Mr. Biondi said this issue would be

addressed later.

Mr. Cooperson expressed concern that there seems to be

an assumption, which he does not fully agree with, that somehow

in a State this small that the changes we can make in our fiscal

and tax policy are such that we can fine-tune the growth to the

degree that is being addressed by the Commission..

Mr. Biondi disagreed and said that the whole discussion

indicates that nobody-in the room thinks you can fine tune.growth.

What they think is that there is a minimum level of growth that is
going to be required and in order to achieve that we have got to

reverse alot of policies we have had in the past.

Mr. Cooperson said he does not question the desirability of

having growth because growth is inevitable.

Mr. Chamberlin said that the concept being put forth by

Mr. Thompson can be expressed more clearly if you separate the ideas

of population and economic growth. He felt that if you look at the

two separately and.say, for instance, that we would consider a net
rate of 4% of population growth,and 3% of economic growth, the

@implication of.that is that the gross growth rat e of the State, if

you defined it in terms of dollars, would be 9% per year and you

.could project that out. He felt that Mr. Thompson, in the Economic

Development Committee report, was saying that.we are going with

basically a very low population growth rate but the demographic

characteristics of our base population are such that they are going

to put more people in the employment field and it will.be necessary

to expand the economic growth rate to accommodate those persons to

be employed. By looking at the two of those, he felt that

Mr. Thompson is saying., in terms of policy, that while you may

not become aggressive in terms-of population growth, you are

going to have to undertake some fairly positive and aggressive

policies in terms of economic growth to provide the number of

jobs that wi 11 be necessary.

Mr. Thompson said that if we can regress some of the

things that have been depressing economic growth back to where

we were on a more normal basis, we would get that kind of economic

growth without bringing an awful lot ofnew industry into the State.

The industry in the State already would provide much of that growth.

Mr. Krapf completely disagreed with Mr. Thompson's state-

ment. Mr. Thompson said where new industry may be needed is that

where there are unemployed and underemployed in Wilmington and

Sussex County, we may have to bring some industry in to provide
a balance economic growth. However, in the large numbers of the

kind of growth that is', we will get in the next,10 years, it will

come out of existing industry in the State.

Mr. Krapf said he still disag reed because, as an example,

most companies are "increasing production yet they are cutting

down on employees per man hour of production" Companies are employ-

ing'less - not more.

Mr. Biondi then opened the discussion on Mr. Krieger's

report. Mr. Krieger said that after the Cost.of Public, Services

Committee meeting, and the meeting between Mr. Krieger, Mr. Latham,

Mr. Keifer and some of the Delaware StatePlanning Office staff

members it was agreed that Mr. Keifer's staff would work up the
debt cost projected to '1985 and all the breakdowns as shown on

-28-

Table VI. Mr. Krieger and his staff took the increases in

the budget from the Cost of Public Services report ( the period

1968-1973), then related it to a real growth fact or took into.

account the inflation factors and found that the dollars increase

at a rate of about 9% a year. In schedule II, they put in an

estimated increase in population starting with 19.74 up to 700,000

by 1985 and showed the percentage changes. in population by year, which

was mentioned ly, -are not large changes less than 3k%
previous

per year.

Back in schedule 1, they have the estimated population

figures broken down on three premises - one of 8.76% increase, one

at 5% and one at 15% which is possible but not.p.robable.

In schedule II, they broke the cost increases down to

show what the real cost would be for the increased population

numbers. Those numbers show that there would be a normal increase

in the budget figures each year. Then they-tried to breakdown how
much debt.increase was caused by the increase in.population.
Mr. Krieger noted that this number, as compared to Mr.

Keifer's number, shows the total current budget figures in 1985

to be $1,635,000 - not including debt service. He said Mr. Keifer's

debt service number is pretty accurate because.he was working with

known numbers and that came to $244,000,000. This means that Mr.

Krieger's projections show that the.total outlay would be $1,879,000.OOC

'Mr. Keifer's figure was an 8% rate and Mr. Krieger's was at a 9%

rate. Mr. Krieger felt that the two figures are fairly close.

-29-

Mr. Krieger went on to say that the Economic Develop-

ment Committee question on page 9, item 3, asked them to relate

the cost of the growth and what Mr. Krieger attempted to do on

schedule II is to show what the cost would be, personally, for

that growth. The answers that they came up with shows, with a

8.77%.increase in the.future, that it would only cost us a little
over $1,000 per person for every person.who comes into the State.

Mr. Krieger also mentioned thatall of the Cost of Public

Servicenumbers were related to population and not to participating

companies, so that-when you talk about cost figures, even though

we have several large companies in Delaware that pay large taxes,

everything is related back to individuals.

Mr. Krieger felt that to answer the questions asked by

the Economic Development Committee what does it cost to bring

people into the State? The Commission's determination would have

to be can they afford it or do they want to spend the numbers

that they project to be somewhere between approximately $1,000

in 1974 -1975 and $2,200,in.1985. Does the State want to adopt
a policy of spending approximately $1,OdO per person with in the

next 4 or 5 years to bring people into the State. Mr. Krapf asked

'how many dollars does the average person pay in taxes? Mr. Krieger

said right now they are paying close to $1,000 a person,.-overall.

He said we have a balanced budget in the State, so whatever we

have is paid for. So in the next 5 years, it will cost around

$1,100 per person for new people to come into the State in inflated

dollars).

-30-

Another number that is a key number, as far as the questions

asked in the Economic Development Report is that we know that,

not including debt retirement ( and debt retirement is costing us

about $28 a person today per year) that we are spending about $852

a year, per person on all levels, to operate the State. By 1985
it
with the 700,000 populationAonly increases to about $2,300 per
person and about $35'0 counting Mr. Keifer's assumptions of

$40,000,000 capital budget each year for the next 10 years. That is

only about $2,600 a person per year.

Mr. Webb noted that the per capita income increases by

compounds of 11% to 12% a year between now and 1985. Taking

1,600,00.0.that comes out to about 2,400 per person as compared to

$586 now. This would take a per capita income of about $25,000 per

person to keep the percentages exactly where they are now- which is

11% of per capita income to support State and local governments.

Everyone agreed that the results of Mr. Krieger's report

are consistent with the results of the study done by the Delaware

.State Planning Office. Mr. Biondi asked if Mr..Keifer had any dis-

agreement with what Mr. Krieger did. 'Mr. Keifer said he did not

understand-how he got the incremental population change- where did

they come from? Mr. Krieger said they were just put in to get the

700,000 figure on a consistent level hasis figuring that the larg-

est impact of the Committee's report would hit about 1976-1977.

Mr. Biondi said that both reports,indicate we have seen the

expenditure side of this and it would seem that a revenue side, based

upon the same assumptions of the Delaware State Planning Office
report is nec essary so we can see the relevance of this and the signi-

-31-

ficance from the point of view of portability.

Dr. Latham agreed that this was possible. However,

he felt it would be more realistic to project revenues at a lower

growth rate than the expenditure side, simply because we will con-

tinue to see the cost of government excelerating more rapidly

than the governments revenue sources possibly can. That is what

we have observed for the past 5 years.

Mr. Chamberlin said that another.caution for making

projections that.are based on population by drawing a comparison

he said, you are looking at basically 130,000 population increase

over the period being discussed and at the same time looking at a

net increase in housing ( for example) of 60,000 dwelling units,

which is disproportionate to the population increase. The reason
for this is tha .t you have demographic changes occuring and the house-I

hold formation is the determination of.housing not gross popula-

tion. Since housing is often related to some of the cost of public

services there could be an even higher increase in this.area.

Mr. Biondi said we need someone with expertise to look

@at the income side of this picture.

Mr. Webb said the point that he was trying to make pre-

viously is th at two groups have agreed that the cost of government
in 1985 would be around $1,600,000,000. He.said if you accept that

and you have a population of 700,000 in 1985, the per capita cost

is $2,350 per person ( the cost of government). If you are going

to support-that with the same percentage of per capita income, which

you did in 1973 ($586 which was.11% of per capita income), you need
a per capita income of $25,000.. Anything,less than that means a

tax increase.

_32-

Mr. Biondi asked Dr. Latham to work with the Delaware

State Planning Office, utilizing common assumptions that were

used in the expenditure report and do a revenue report that

parallels that. That report will bediscussed at the next meeting.

Mr. Bauer, Director of the New Castle County Planning

Department, presented to the Commission the following position

paper by the Administrator of New Castle County:

The Delaware Tomorrow Commission has requested thatNew

Castle County submit a statement on the development of

a growth policy for Delaware and specifically, the

est ablishment of a growth rate. The statement herein

presents several considerations New.Castle County wishes

to make to the Delaware Tomorrow Commission for its delibera-

tions.

Growth policy necessarily involves questions of multiple

values within the community. The establishment of a growth

policy must be based upon some overall philosophy regard-

ing growth. It is our judgement that a growth policy

should attempt to meet economic, social, As well as

political values for the total community. The first

appropriate public response to this issue must be the

development of a clear understanding of growth. It.

must be understood that growth is not an isolated, one

shot event but is a continuous process to.which public

policy must respond. In order to do so, governments

through pub lic policy must anticipate to the extent possi-

ble elements of growth. They must attempt to understand-

-33-

how much growth is likely and be in a position to

respond in regard to how much growth, when, where and how.

Only by building a mechanism which does so can the.public

sector avoid putting itself.in a catch-up position. In-

cluded in this analysis must be concern for the fiscal

impact that differing growth will have.. This should

include policies for equitably distributing the incre-

mental costs of growth. Developing an understanding of

,the trends in.growth and establishing.an overall philo-

sophy toward growth is, to New Castle County, the most

important first public response.

In our judgement, a growth rate for Delaware should

not be established. Attempts to project overall costs

in the public sector are also questionable. Rather,

what we see as needed is public policy which understands

that growth is a continuous or on-going phenomenon

and must be dealt with on a short-term flexible basis.

The question of a growth policy is believed by New Castle

County to be two separate but interdependent situations.

The first is the question of economic growth for Delaware;

the second is the question of population growth for Dela-

ware. Public policy regarding growth in our judgment

should consider these as separable issues requring differ-

ing approaches.

In regard to economic growth, this means establishing

policies which influence economic.deve.lopment. Such

-34-

policies should seek to maintain the existing

economic base of the community and to identify

specific weaknesses in the economic base. Such

weaknesses may be an overdependency on a particu-

lar industry or a particular unemployment charact-

eristic. In conjuction with this, there must be

continual monitoring of the, availability of jobs

and specific policies targeted to meet specific

unemployment needs.

In regard to population growth policy,,the public

sector is in the best position when it establishes

policies that can accommodate the population growth

which will respond to the economic conditions.

New Castle County feels the establishment of an

arbitrary employment or population rate of growth

either by specific number or percentage as a policy

will not be effective and it may, indeed, be counter-

productive. What.is needed is a set of policies,.

many of which have already been discussed by the

Commission, which will allow theJurisdictions through-
out Delaware to respond better to changing conditions.,

Growth policy is effectively carried out b y spe cific,.

practical or feasible policies which can be implement-

ed. The setting of goal-like numbers or percentages
does not supplant these policies. New Castle County

supports the development of policies.which anticipate

growth and are on a short-term, responsive,. flexible.,

continuous basis.

-35-

Mr. Biondi said that most of what the Commission

has done is to look at Land Use and Community Development and

set forth some policies with respect to problems involved in

land use, has taken a tough view of the cost of public services

and has done so with a questioning view, recognizing the

difficulty of projecting those overall costs. In the area of

ommission ntified those areas
Economic Development, the C* has ide

where there are problems and recommended policy changes with

respect to them. He said he saw no disagreement between New

Castle County's position paper and what the Commission has done

in those.areas.

With respect to the advocacy of a growth rate by

the Commission, the Commission has not at this point (and Mr.

Biondi does not expect the Commission to) taken a position that

they should set as a goal an increaselin the population of

a given number by a specific date or a rate of growth in employ-

ment. However,,he felt the consensus of the Commission is that,

over the next 10 years, we will need a g rowth rate which approxi-

mates 309,000 jobs- whic h calls for a population of around 700,000.

The problem areas identified by the Commission in their Economic

policies are intended to remove obstacles to obtain that rate of

growth. He felt that beyond that rate of growth, the Commission's

position is that 309,000 jobs plus 700,000 people are a target

11 the
which must be re-evaluated each year on the basis of a'

factors that they have discussed with respect to the Commission's

policies. It does nothing more than, if you are looking at a 10

year plan, provide a guideline for the first year of the plan

only. He said that if the Commission approaches the problem

-36-

on this basis, he does not see a tremendous difference between

what the Commission is saying and New Castle County's position

paper.

Mr. Bauer said that, in his 17,years working for 3

different county governments, people tend to get hung up on the

numbers game. It has been his experience that whenever they
attempt to project into the futu re in term s of numbers or' in'

terms of growth rate, they always end up being wrong. If it

would be a policy of the Commission that they,will re-evaluate

on an annual basis, he could support that., However, he caution-

ed against getting to a point where everyone says that by 1985

we,will have 700,000 people- not one more orone less.

Mr. Krapf said that you need some sort of planning

process. Mr. Biondi said that Mr.. Bauer was trying to say that

in discussing growth in general,there is no central authority

which can arbitrarily make decisions throughout the business

community and the population dictating what is going to occur.

The Commission is saying that we haveidentified the problem;

with.the base rate of growth we need; we have identified problems

in reaching that; we have, suggested some recommendations. for

dealing with-those problems. Beyond that, we have, to look at

the problem each year and determine what the benefits are-and

what the costs are going to be.

Mr. Krapf said he thought everyone in.the room agreeds

with that.

Mr. Weiner said that he thought'New Castle County paper

was an excellent statement. He felt that it should be added in

its essential form.because we have not used the,concepts and look-

_37-

ed at it in the broad framework. that this statement poses,

although that kind of thinking is implicit in some of the

things the Commission has discussed. He said the fact remains

that there is a real danger of playing the numbers game. As

a preamble to that numbers game, we should recognize a number

of things pointed out in the position paper, because it makes

the assumption that we need to .respond. If the population

of the State of Delaware responds with a birthrate which is

higher than what is projected.in the 700,000. Figure - what

are we going to do? He said he would like to see New Castle

County's position paper incorporated into the Commi-ssion Report

as the kind of approach to the whole question of growth.

He further stated that if the Commission decides to

talk about 700,00 0 popula tion as we currently see it and if we

talk about an increase in the number of jobs as we currently

see it, then we have done two things:

1) we have said we are making a assumption for this

year as to what that growth looks like 10 years

from now, however,

2) we are doing against the background and the concept

of that kind of statement.

Mr. Thompson took strong exception to Mt. Weiner's

statement. He said that the judgement of the Economic. Develop-

ment Committee was that the State could influence the rate of

growth by what we do. We are not at the mercy of unseen forces-

although there are some forces over which we have no control.

The State, by reasons of policies that could be adopted, could

do a good deal to have a rate of growth that is closer to 800,000

-38-

in 10 years than 700,000. He said that we cannot ignore the

issue of whether we should try to do things to get 800,000

.or whether we should be satisfied with 700,000. We have an

option-on that.

Mr. Weiner said that never before has there been any

mention of controlling growth and he strongly objected.to this

idea.

Mr. Thompson clarified that the Economic Development

Committee felt that the State, by its actions, could influence

growth- although it could not control it completely. He said

that the Commission started out a year ago on this position

with the idea that they ought to stimulate new i,ndustries com-

ing into the State in order to provide jobs for our people. The

Economic Development Committee then figured out the minimum number

of jobs they had to stimulate in.order to stay even. The Commission

has to decideif that is a sufficient rate of growth to set as a

target and to influence public policy or should public policy

try to stimulate a much higher rate,of growth?

Mr. Biondi said that his understanding was that the

Commission was going to have to change.their public policies in

the economic area, for example, to-merely provide the basic mini-

mum.number of jobs. When you start going beyond that, however,

you can proceed on the assumption that you will have to pay for

what we need. We have a couple of studies done which indicate what

we need as in the realm of what we can buy. What the Commission's

said is that we can not project 10 years down the road in the

long run; that the numbers are not, available; that you have to

-39-

start out with some sortof a base, reevaluate it annually.

Mr. Thompson felt that today'the Commission ought to
set some sort of goal - which can be adjusted yearly.

Mr. Biondi said he was willing to set a goal as

700,000 as base (minimum) rate of growth. He doesn't think.

we ought to survive with less.

Mr. Biondi said no one including the Economic Develop-

ment Committee set any goals in terms of jobs or population

what has been a set projection.

Mr. Biondi said that the'Commission has saidthat they

have some responsibility to talk about how we will pay the.cost
.:for gTowthand based upon the numbers the'Commission has been able
to develop, that is the only posture you could proceed on, based
upon the'fact that that is the minimum need we ought to satisfy.

Secretary Daniello said he would like to see a policy

set which would accomplish some standard for Delaware that would

accommodate the projected population and job increase that is in

the Economic Development Committee report.

Mr. Weiner said the issue is a question of control.

The responsibility of government, as he-understands it in our

political economy,,is essentially to do those-services, that

the private sector cannot do. The responsibility of government

is to respond to the needs of the people and the communities-

not to make the determination that we shall go to a certain

figure (700,000 or otherwise) and no mote. He feels that in

order for government to be responsive, it has to recognize the

limitations of our natural resources, our physical environment,

our social and economic environment as it comes alon
9.

-40-

He felt that we could start with some specific
figures that will give some indication if the fact that growth
is here, that a no-growth policy. is impossible in a dynamic

society such as ours; and that it be re-examined. However, he

does not feel that governments responsibility is to say "this is

how far youare going to grow -,no more."

Mr. Biondi said that there was no argument with those

ideas.

Mr. Cooperson said that we have all agreed that there

are certain inequities in our present legislative and planning

structure in Delaware which ought to be removed, which will

provide for what Mr. Bauer called "maintaining the economic base."

Mr. Cooperson said that as he understands what Mr. Thompson was

saying, is that you can go beyond that with policies which the

government will take to actively encourage growth. For example,

you could have a roll-back of taxes on new industry coming into

the State for 10 years, as the City of Wilmington has been doing
with new buildings. This is a positive policy, which could,

theoretically, increase the rate of growth in the State of Delaware.
Mr. Weiner repeated that he thought New Castle County's

paper was an excellent statement. He feels that we ought to

.ado pt some definitive numbers, simply so that there are targets

however, it needs to be done without any notion of control but

with the notion of dealing with the problems that confrontlour

communications and our State.

Mr. Bauer said that he did not feel that the position

paper of New Castle County is inconsi stent with what has been

said in previous discussion. He said that he is not a good enough

planner to predict what the conditions in New Castle County

are going to be 15 years down the road. Obviously, we use

numbers for transportation planning, for sewer planning, for

water supply, etc. However, if'we.are saying that the Delaware

Tomorrow C ommission said in 1975 that the target population

is 700,00'0 people@in 1985-and when we reach 700,000 people in

1984 that is it.

Mr. Biondi said no one on the Commission has any dis-

agreements with that philosophy. He, further, stated that he

was thinking about the Commission taking out of the Economic

Development Committee report the job provisions and population

figures there and using those as a base rate (minimum) of economic

growth and taking it subject to the qualification that it is a

growth goal which has to be evaluated annually and not one that

you can stick with over a long period of time. He said that, to

his knowledge, no one has talked about growth in Delaware) in

that kind of context. Nobody has asked the kind of questions

that have been asked about the cost of growth. The Commission has

had a difficult time in finding answers., However, for the first

time in considering growth questions, someone has looked at it

in advance and raised relevant questions,about the cost.of it.

He further felt that it would be irresponsible for

the Commission to suggest a rate of growth beyond what. he considers

to be a minimum that we are going to have to learn to afford un-

til we learn to develop the cost/benefit answers as we go along.

That is why we have to look at it on an annual basis. He feels

that the job and p opulation projections of 700,000 is the best

judgement that can be made on the basis of the information we have

in July of 1975, giving full consideration that a new look

will be taken on a continuous basis.

Secretary Daniello saidthat he felt that if the word

11projections" were used instead of "goals", this would solve a

lot of concerns.

Mr. Krieger made the motion that New Castle County is

po sition paper be accepted by the Commission and.reviewed and

considered in the final deliberations, Mr. Biondi said that

these are the final*deliberations. He said that,Mr. Bauer is

talking about problems in the same context that the Commission...

is and he feels that the philosophy stated with respect to growth

policy in New Castle County's position paper should be incorporated

as part of the Commissions philosophy in looking at the growth

question with a caveat that this is only a preliminary statement

of a.target to work with at the present time. He feels that.

the target should be the needs that were spelled out in the

Economic Development Committee report.

It was moved and seconded that Mr. Biondi's suggestion

be adopted. All present were in favor. Mr. Biondi said that we

would call this a "conditional vote". He said that we have to

look at the revenue side carefully and we may want to reconsider

that position when we look at the,revenue side.

Mr. Weiner made a motion to amend III. Conclusion, to

use the word "projections" instead of the word "goals". This

motion was seconded and approved by all present.

Dr. Latham said that the revenue side could be-addressed

by himself and the Planning Office staff by this time next week.

Mr. Weiner said that the four questions posed by the

Economic Development Committee are relevant questions, however,

he felt there is a fifth question that is not posed, yet is

implicit and it deals with the revenue side. If we are going

to have growth and the cost of that growth rises as a percen-

tage of the budgeted income, what is the alternative? He said

that the "gut" questions.is: if we are going to have growth, who

pays for it? He said there needs to be the question of who is
ible for population growth and where does the responsibi-
responsi

lity lie-at the public or private level, for-the assumption of

those revenues and for how they are distributed.

Mr. Biondi said that the revenue side will be discussed

at the next meeting. which he suggested be held on Wednesday,

July 30, 1975.

Mr. Oldach suggested that, rather than changing the

word "goals" to,"projections" that it be changed to read: "In

order to establish reasonable plans for future population type

of growth". He reason for amending Section III. Conclusion was

that it is,a little more than just a projection, it is a planning

activity. Mr. Oldach's suggestion was moved and seconded and

agreed to by all present.

Mr. Biondi announced that the next meeting of the

Commission will be held on Wednesday, July 30, 1975, at the

Wilton Community Center at 4:00 p.m.

Mr. Biondi noted that the Commission had previously

published a "Preliminary Draft Report", prepared by Dr. Latham,

and distributed to the Commissi.on. This report was never

discussed, due to the fact that the,report was written on the

assumption that the recommendations of the Committees would be

accepted by the Commission as written. However, substantial

changes have be.en made to the Committee reports.. On the ques-

tion of what form a preliminary reprot should take, Mr. Biondi
felt that the Commission ought.to.produce a preliminary narra-
tive to the report, which discusses the background of the Com-

mission (the establishment of the Committees, membership, and

the work accomplished, etc.) and that a preliminary report should

be published, including exactly what was,voted on and approved

as reflected in the minutes. When that preliminary report is

done (hopefully by the end of August) it should be distributed

to the Governor, members of the General Assembly, the press and

the general public, with a statement that we intend to take the,
report to public hearings in September. Based upon the results

of the public hearings (possibly one in each county) a final

report will be compiled and submitted to the Governor.,

Mr. Biondi further stated that.the recommendations.

being made by the Commissionneed to be carried out at various
levels'of local government. He felt that the Commission ought

to consider whether we ought to recommend a future role for the

Commission after the final report has been submitted to the
Governor (in the formof the Commission itself, a Committee of
persons on the Commission, a continuing body of the Technical

Advisory Committee, etc.) so that there is someone around in

the future to look at the projections and see how far we have

gone to solve some of the problems illustrated bythe Commission.

Mr. Krieger moved that the meeting-be adjourned at

approximately 9:00 p.m. This mot-ion was seconded and agreed

-to by all present..

Respectfully submitted,

Dee Burkley.
Recording Secretary

DAB/hmck

STATE OF DELAWARE
DAVID R. KEIFER PLANNING OFFICE PHONE: (3021 678-4271
DIRECTOR DOVER

Ref: 1007-1404

MEETING OF THE DELAWARE TOMORROW COMMISSION

July 30, 1975

A meeting of the Delaware Tomorrow Commission was

held in Wilton Community Center on July 30, .1975.

In attendance at the meeting were the following:

Francis Biondi, Chairman of the Commission
Sherman Webb' Office of the Governor
Dave Keifer, State Planner
Carl Oldach, Retired
Dorothy Greer, Delawareans for Orderly Development
Jay H. Cooperson, Sierra Club, Delaware Group
Ernie Thorn, Common Cause
Arthur Krieger, Attorney
Bill Bradford, Wilmington Trust
Eric Brucker, University of Delaware
Leon N. Weiner, Leon Weiner and Associates, Inc.
Robert J. Berndt, Senator, Delaware General Assembly
N. C. Vasuki, Dept. of Natural Resources and Environ-
mental Control
J. C. Bryson, Secretary, Dept. of Natural Resources
and Environmental Control
Cliff Hall, Secretary, Dept. of Highways and Transportation
Marcie Bierlein, League of Women Voters, Delaware
Ross E. Anderson, President,.Delaware Chamber of Commerce
Spencer Thompson, ICI, America
Peg McClane, League of Women Voters
Marion I. Seibel, Representative, Delaware General Assembly
Bernard Dworsky, New Castle County 208 Program
Merna Hurd, New Castle County 208 Agency
Steve Chamberlin, Leon Weiner and Associates
Marvin S. Gilman, Leon-'Weiner and Associates
Henry Folsom, President New Castle County Council
Carl Russell, New Castle County Office of the Executive
Ed O'Donnell, New Castle County Department of Planning
Joseph Conaway, Sussex County Administrator
Dan Kuennen, University of Delaware
Lance Werner, University of Delaware
Fred Krapf, Frederic Krapf and Son
EXECUTIVE DEPARTMENI
SHERMAN W. TRIB-1-11 T7

Chairman Biondi called the meeting to, order._

At the end of the last meeting, the Commission started

discussing the cost of, growth. Some assumpti0ns were used,

to follow along the lines of what was suggested by the
Eco Development Committee Report, that. is, the State should

look to 1985 at, a growth rate that would give us a total

population of 700,000, about 309,000 jobs; and this could

be a target for goals , with the understanding -that these

figures constitute a starting, point which would have to be,
updated each, year., -Then the CommissIon considered., the cost
0f growth, In order to do this-, the Commisslon members

examined', two reports: "Operating and Capital Cost ProJections
Delaware State and Local Governments 1973-1985" prepared by

the Delaware State Planning Office which projected the cost,

of goverment to be $1,645,800-by 1985; and the second report,

prepared by Mr. Krieger, using different concepts than those

used to prepare the report of the State Planning Office,.

especially regarding the population projections. The only

final conclusion reached was that Mr. Krieger s report came

to almost the same cost figure for 1985.
After considering the projected cost of government,
the Commission asked the'State Planning Office and the

Cost of Public Services Committee to foresee the revenues

to carry out the services. A third report has been prepared,

A Comparison of Projected 1985 Governmental Revenues and

Expenditures in Delaware", by the State Planning Office which

replaces the two previous reports.

Mr. Webb proceeded to explain that this report was

prepared by a team headed by Dr..B.ill Latham and a separate

revenue estimate team headed by Mr. Kalhil of the Division

of Revenue. They both used slightly different parameters

to arrive at their estimates, but their deviation.was 1.3%,

so the report re flects Dr. Latham's estimates. The report

is broken down into State General Fund Revenue, followed by

revenues to other units of governments as well as federal

funds. Within State General Fund revenue, it is broken into

four different categories: Franchise tax, Personal Income tax,

a group of revenues based on a,number of units sold, and

General Fund revenues (real estate tax, corporate tax, etc.).

The Franchise Tax would increase at a level equal to

the expected level of inflation between.now and 1985--5.15%.

Mr. Kalhil felt that the,increase would be below the rate

of inflation so that on a constant dollar basis, there is

no change, but building in the inflation, we would arrive

at a figure of $87,000,000 by 1985. This assumes that there

are no changes in the tax laws during 1975-1985. Using

Mr. Kalhil's estimation, the estimated 1985 Franchise Tax

collection would be $65 million (in 1985 dollars).

The Personal.Income Tax will increase as the number

of people move into higher tax brackets. It is assumed

that the inflation average between now and 1985 is 5.15% which
will affect the per capita income tax level. It is proposed
a real economic growth in the period to average 3% per capita,
per year. This means an aIverage increase in personal income
tax of approximately 8.1 5%. In 1980 dollars, a figure of

$379 million is arrived at. Mr. Kalhil assumed that the figure

would reach in the neighborhood of $410 million. A combination

of the inflation rate, new job fo rmation, net in migration,

and real growth will average 10% per year over the period

covered, so a higher estimate is arrived at.

Mr. Thorn commented that if we are recommending that

consideration.be given to decreasing our highest bracket of
income tax, should his Committee's recommendation be reflected

in that. Mr. Webb replied that taxes were estimated on what

they are.

Mr. Folsom noted a couple of errors in the expression

of the footnote in the table on page 1, in the 1985 Collectic-is

column, it should read ($48,008,488) x. (1-8269) (and not 1,8269)
and in the *footnote,,it should read 1.8269=(1.0515)12 and not

1,8269=(1.0515)12.

The Flat Dollar Amount of Tax Revenues(motor fuel, cigarettes,

alcoholic beveragep motor vehicle fees-except the document

ill
fee, etc.). The number of units sold of these items w
only increase as a function of the population and these taxes

will remain constant through 1985.. It was assumed that,

possibly the motor fuel revenue may be decreased (5 to 8% drop

in real gallons between 1975 and 1985) while the others may

increase--so it was estimated that there would be no change

except that brought about by population growth. Through

historical trends, since 1967, it was found that these assumptions

were correct. No increases in the taxes were assumed.

All other state general fund revenues including corporation

income tax, pari-mutuel (sales and admissions), inheritance,

insurance, business and occupational, real estate, public

utilities, dividends and'interests, gifts, etc., will increase

by the inflation rate plus the impact of population growth

over the next ten years. Some of these tax revenues are

cyclical and subject to updraft and downdriaft, but as a@

general rule, these revenues would have a tendency to increase

with the real growth population change and the inflation rate..

This trend has been experienced in the past, except for those

taxes that have been imposed recently, of course.

The above mentioned revenues were left out in the

report, this omission will be corrected..

Included in "All Local" are comprised of the revenues

from the local school districts, plus the operating revenues

of the general. fund receipts of the three counties, the

City of Wilmington, Newark and Dover. State and local

revenues were projected as remaining constant in 1973

dollars and in 1973 per capita terms. The 1985 level in

1985 dollars is produced by multiplying 700,000 people and
inflating that rate at 5% per year. It is more difficult.
to estimate the local-revenues because some of the municipalities

buy and sell el.ectr.idity--and the price rise function and

the profit marginare not known. Also not known are the

property value and the nature of the housing for a 700,GOO

population.'.AgaiTi., it was assumed that school taxes would

not be raised. It was..noted,that about half of the local

revenue figure comes fr.om,.re al estate tax, Another problem

was that most of the counties-have just recently completed

a re-assessment, therefore., no re-assessment was considered'

between now and 19.85.

Federal Funds. It was a'ssumed that the percentage of

existing revenues would remain constant. The increase of

federal revenue sharing money.between 1973 and 1975 is

negligeable.

The dramatic:point arrived at is that total revenues

in 1973 were $530 million-per capita revenue was $924--

with a population of.573,000; with an increase in population

of 573,000, the total revenues more than double and the per

capita revenues double., Between 1967 and 1975, the general

fund revenues increased at about lk% higher rate than the.
inflation rate for that period and fell short of expenditures

by something in exces s. of $90 million. It is not a new

phenomenon that revenues,do not increase in and out of

themselves at a rate equal to the demand of the expenditures.

The methodology and assumptions portion of. the report

to the report
was explained by Dave Keifer.. Referring back
produced by the State Planning Office and distributed at the

last meeting, all operating costs were held constant in per

capita terms because of the short time allotted to come up

with the report. Taking a second-look at expenditures, the

Planning Office tried to give mare.reallstic figures by taking

historical trends and seeing how they move from FY '73

to FY '76 and make adjustments to obtain more up-to-date

calculati ons. Also judgements were made as to how the

expenditure rate might change between now and 1985, as a

result of what might be considered inevitable commitments.

The local expenditures were not considered. It was assumed

that the 1973 expenditures would remain constant. The

bonded debt was not looked at either, it was assumed that

it would amount to $40 million pet year in 1973 dollars.

The categories have be en kept the same. There is an

error in the first line of "Education", it.should be 1985,

not 1978., Mr..Biondi asked whether the drop in number of

pupils in the public system would have any bearing on the

per capita cost of education. There is a declinein the

number of enrollment, Mr. Keifer said, but because of

the total population figure of 700,000, by 1985 the State's

enrollment will be about up to 1973 level.

In regAr ds. to,j!@wa@s (operation), the Planning Office,
took the population, figure for 1976, of 590,000ias the base,
and this was, applied to the budget. It assumes $20 million

in constant dollars. for construction. For transportation,
the figures from 1976,to 1985 were increased at the rate of
10% per year. It was sug .gested-to add "and Transportation"

in the sub-title.

There is a split in Health and Hospitals to reflect a
commitment to staff programs that will be coming, on line-

which is basically the reason for the increase. The State

is committed to the geriatric programs, as an example.

Concerning the Sewerage and_Sanitation was held constant

per capita at 1976 level.

Parks and Recreation, the.Planning Office increased

2% annually based on the theory that, during the 1960's the
State bought 'a lot of land for parks and fish and game

activities. The capital investment has been increased to

develop the land recently. During the,next ten years some

of the parks will be coming on line and expenditures will

go to operating and maintaining those parks.

The Financial Administration figures (comprising the

entire Department of Finance, the State Treasurer, the Budget

Director, the Auditor* of Accounts, and Central Data Processing)

were held constant per capita. There was a discussion as to

how income tax refunds should be considered: should they be

considered as an expenditure or as a decrease in revenues.

Since different rates of growth are used between revenues

and expenditures, Mr. Webb was asked whether this factor was

considered. Mr. Webb replied that fiscal 1975 revenues were taken

because this was a "clean" year--when everything was paid

in the year that was due in the year and the.8% inflation

rate was not used--a closer to actual percentage was used.

Pensions were projected to increas e 5% annually. This

includes a,three item area. First the 1976 constant dollars

were taken because of the tier system and to arriving at the

Pension Plan itself. Blue Cross and FICA reflect what the

Social Security Administration says.and will dollars grow to

cover the State share of Social Security payments for State

employees as well as Blue Cross. It was felt 5% was a

reasonable increase percentage.

Dr. Brucker commented that if Table 2 of this report

is compared to Table 6.of the previous report, it is found

that the only category that is going to increase by less

than the constant real percentage is education...The original

report showed a $26.7 million in constant dollars for highways,

the State Planning Office report now shows a $48.3 million--

this is a-legitimate comparison showing a much faster increase

per capita.

Moving to Table 3, on page 9, the 1973 deficit was $71.4

million. What makes up this deficit, Mr. Biondi asked? It

is not the 1973 deficit, it is the 1985 deficit in 1973 dollars,.

Mr. Keifer replied.

Mr. Krieger asked where the figure of $330.2 million
for local goverments expenditures came from. Total governmental
expenditures 1985 dollars is $1,856.8 million; and
1985 State expenditures should be $745 million. This figure,
Mr. Webb said, is a combination of federal and local expenditures.
Footnote "b", of Table 3, should explain this.

Do we arrive at the conclusion, Mr. Biondi asked-, that

we will haVe to increase taxes by the amount of the deficit
in order to fund a population of 700,000 people?
Ail the Calculations were made Mr. Webb said 'Without

increasing the amount of programs. It is a fact that new

programs will be instituted during the period considered. If
it is assumed thAt the general revenue is $100 million low,
it is also likely that there will be $100 million wort h of new
programs. it is also reasonable to assume that (the way the
legislature works)we are looking toward a $100 million deficit
over the next ten year period for State government.
If the deficit at the State level is $374 million and
the deficit at the local level is $113 million,and the two
are added together a figure of $487 million is obtained.
Looking to Table 2, the State expenditures are $1,105.2 million.
This figure is carried over to Table 3, but looking at local
and others the figure is $745.1 but only $330.2 was carried
over. The reason given for that was because of the federal funds.

On Table 2, the Stat'
e government columns did not

include any federal funds at all (strictly General Funds).

After further checking, Dr. Brucker found.that the expenditures

.for local governments should be.$430 million-with a deficit

of $213.7 million. Another crosscheck.is to take combined

Table 1 and Table 2 in the 1985.total governmental expenditures

projected $1,856.8 billion, the total revenues in Table 1

were $1,262 billion and the difference is $594 million. It

was determined that an error in calculation was made and that

this would.be corrected.

Does it mean, Mr. Biondi asked, that in the year 1985

taxes on the State and local levels will have to be raised

to raise $600 million more than now. It was noted that this

represented a 50% increase. The answer came positive.

Mr. Wiener said that he did not see the purpose of the

whole exercise of finding out how much deficit the State

and local governments will have to face by 1985. The only

conclusion, as of this date, with the set of assumptions explained,

the State will have to.have a higher tax rate if we want to

continue a rate of services. There is no.real input as.to

the kind of curb required for capital expenditure,,

for debt service other than a projection assumed of a capital

bond of X number of dollars in each of the next 12 years. All.

these assumptions are vulnerable. Mr. Wiener said he felt

that this document served no real purpose.

Mr. Webb said that this points Out twO of 0ur

problems: 1/3 of the State: revenues projected between

now and' 1985 wi11 increase at a rate f ar below, the level of
any inflation. If the-Franchise Tax and the other taxes (cigarettes,.

alcohol', motor fuel, etc.) were responsive, ther e would not

exist as large a problem. The. main- reason why taxes had- to

be increased between: 1 1963 and 1975. was bec ause the,Franchise

Tax was not res-ponsive to, inflation.Between. 1967 and", .,

the growth of General Fund, Revenue., without taxes,, was, only

1/12% more than the, rate.. of. inf lation on. an annual, basis.
Mr., Webb felt that, given the. unforeseen factors (such

as took place as aresult of the Arab oil embargo and the

subsequent economic crisis) that inflation was understated

(through 1985), and, that the: revenues. and expenditures. were

overstated: in the., July 29, 1975 report.

Mr. Bradford said that he. thinks this, projection of

$600 million deficit by, 1985, is as. good. as the assumption,.

If a 5% deficit had shown, it would.' not have. made much

impact,. but (out of. the. calculations. came the fact that the
deficit represented 50% of the revenues estimate): with such

a: figure-,, it is a guideline that indicates that something

will have. to be done, either in curbing expenditure or by

increasIng the revenues. The order of figures is significant

and of serious- magnitude.

Mr. Biondi commented that the magnitude of this deficit

indicates that when the Commission discusses its report and

the question of growth-rate comes up,, the Commission should

NOTE: indicate two things: all sectors,of the economy in the State

are going to have to look forward to paying increased taxes

per capita--substantially so in the next ten years--and it

has reached a point where we cannot afford some of the luxury,.

inefficiencies and waste in State government., It may indicate

that government streamlining may have to.be accomplished; and

the way we render services will have to be examined. Ten years

from now, we will not be able to operate under the same structure

as we are operating now. In terms of the Delaware family unit,

this also means,that in the concept of the quality of life, the

standards of living will deteriorate significantly--about 50%.

It was noted that the cost of State government between 1969 and

1973 increased tremendously, but this was due to all the new

programs that were instituted, such as the pollution protection,

etc., while this 50% increase between 1973 and 1985 is entirely

without any new programs. It was said that even the biggest.

industries are "tightening their belts", such as duPont for

instance, and there is no reason why State gove .rnment could

,not do the same. It was agreed that the area where this
"tightening up" should be done is in the sector.o,f public and

higher education, which entails the largest part of the State

budget (51%).

Unless someone undertakes the problem from this point

forward to recommend broad scale government reorganization

and governmental economy, the Governor who will be elected

in 1984 will look like Mayor Beam.

Representative Siebel commented that there are too many

layers of government for the 565,000 population There are

also things thatcould be done at the regional level,

Mr. Biondi said he does not look at these findings in a

negative w*ay. Considering the 1985 population projection figure
of 100,000 and the projected 409,000 jobs, he thinks this is

necessary and desirable. Looking at,these figures as a base,

and continu. ing to re-evaluate them--what these figures show.

is that we cannot go on in the next ten years thinking that

everything will work itself out without.any dramatic effect

NOTE: on the taxpayer. As the State goes, economies will have to

be realized or the increases in taxes which will be necessary

will kill off the minimum degree of growth.
Mr. Wiener raised this question:, is the high.cost of

government projected by 1985 a direct result of the population

increase or is it because the standards of the quality of life

that we have set are-too high and, therefore, we cannot pay for.

them. If we want these standards,we will have to pay for them.

Chairman Biondi asked what the Commission members felt

NOTE: about the problem. Mr. Folsom said that the Commission is

not the body that will be able to do anything about this problem.

It is basically-a political problem. The politicians will

spend as much money to buy the services tha t the people are

crying for and will collect as much tax as possible. The

Commission will do well to point out the trend and the

magnitude of the problem, it,will be to no avail to cut back

on education, on overhead, that we should combine the State

and county police because these are political decisions brought

by the pressure of the voters.

NOTE: Dr. Brucker commented that if the solutions to the

problems are in the hands of the politicians, and that the

politicians react to the public's demands then it is up to

the Commission to present the facts to the publi c.

Steve Chamberlin commented that the magnitude of the

cost increase is not a major factor that has a direct relationship

to the population increase.

It was further noted that the cost increase was due to

inflation, thetypes of services the people are receiving, the

increase in the services by certain segments of education.

Dr. Brucker mentioned that it is not only an inflation

factor, but the fact that the expenditures are going to inflate

fas ter than the revenues. We are also discovering that the

cost of service oriented operation will go up much quicker than

the cost of manufacturing. This is a trend in the economy,

the productivity increases are not there in the social services

delivery.

Jay Cooperson commented-that the quality of life we

have comes out ofour personal dollars. There are many

things that the State Government spends on to improve the

quality of life. There may be some serious questions asked

as to what areas we should spend our tax dollars on. How

much are we willing to pay for pollution control,.water, quality,

etc. If the State government is going to provide for sewer

plants, for instance, it will provide, jobs, it will provide

provide for a distinct modifier. Maybe there should be some

distinction as to where the government should spend its money.

OTE: The Commission arrived at this general consensus:

I. The State faces a problem: it will take a substantial

amount of dollars more to run State government and provide

services to the people,-by 1985.

II. The rate of.cost increase (50% by 1985) cannot be

attributed to the increase in population.

III. The rate 'of cost.increase is due mostly because

the revenue grows at a different rate than that of expenditu-ze

because of the nature of certain revenues.

.IV. The expenditure increase is function of Jnflation.

..State. government is in the service rendering business and

'increase in productivity,, in the service area, means a decrease

in the quality of the services provided.

V. In order to combat these problems, State government

will have to give a serious look at more efficient ways of

delivery system.

This information has to be disseminated to the public.,

If the types of revenues are notgoing to be adequate
to.handle our expenditures, then the Commission should make

the politicians aware of the fact that some alternate ways

should be found to bring in revenues. Maybethe total

funding base would have to be reconsidered--not only at the

State level, but at the county and local level.

It was suggested that the report under discussion be

reworked to.cotrect the several mistakes and additions in

the text and in Tables 2 and 3. This report will be considered

a work (or discussion) paper.

There was some discussion as to the stipulations made

in the two footnotes on page 9. it was decided that the

caveat and reservations have to be Trentioned in the report.

Mr. Biondi said that there are still three matters

for consideration by the Commission.

1. Mr. Conaway's concerns regarding.Sussex County

development.

2. The definition of open space, as stipulated by

Dan Kuennen's.sub7c6mmittee.

3.. The preparation of the Commission s preliminary

report, the time schedule, and public hearings,

After a dinner recess, the Commission reconvened.

Mr..Biondi said that while serving in the Land Use

Committee, Mr. Conaway felt there were some areas of concern

to Sussex that had not been touched by, the Committee Mr.

NOTE Conaway, prepared' a, dbcument making certain, recommendaions:

a, The, development of. a cooperati0m effort, between

the Depar_tment of. Community Affairs- and Economic Developmen t and
the Sussex County Council to actively recruit industry to Sussex.
b. Expanding the economic base of Sussex through

the_attraction,of.a more-diversified industrial base to.the

county... Efforts should be made to assure that the perspective

industrial clients are shown the entire State.

c. Assuring the:protection of the-economic ,potential

and* the viability of the Nanticoke River by whatever legal or!

political step necessary.

Expanding the list of-potential industrial sites

in the, county. Such- a li st shou1d'be developed in.cooperation

with the county`s present plan to pinpoint such locations

around the county;...

e Developing a, realistic attitude towards, the

development. 0f_the county.

Mr. Conaway commented that since these recommendations

were wrItten, new,development-took.place: a cooperative working
ef f ort- has Been made. between, the Dept. of Com. Aff:. and, Eco.

Dev. and the: county. The: county feels that many times an.

industry would have settled in Delaware had it, been exposed

to what.southern Delaware has to offer.. There was an attitude

that Sussex County is.essentially a.tourist.or play-ground

county, but there are-also areas. in the county tha t can be.

used for industrial development. The Nanticoke River is a

natural river in Sussex County and should be protected; but,

the Commission should emphasize the use ofthe river as a

natural way of transport to bring inthe oil and to take the

grain out.

Mr. Biondi assured Mr. Conaway that the Commission,

report will reflect the.-concerns o f.Suss,ex County as to the
fact that Sussex County should not be considered as a summer

playground".but give thoughts about the 85,000 people who

live in Sussex County year-round and need permanent jobs.

It has been recommended by the Commission.that after

the report is published, some kind of a continuing body

should be in existence made up of the people who have been

involved in the Commission's and Committee's work to provide

a continuing look at the findings and recommendations.

Mr. Thompson said that his Committee,agreed to the

need of an on-going group. In order to be effective, this

group has to have easy access to the Governor, to the

Secretaries of the Departments. Also, some talents have been

discovered through the Delaware Tomorrow.project that should.

be tapped, possibly ret ired persons who.have.time on their

hands. This kind of support is-critically needed in the

State.

Senator Berndt said-he would like to see the Commission
include in the body of the report the problems,facing.the

State. A recommendation should be made also., in the,report,

that we seek means-to implement measures to avoid such a

heavy deficit. There are ways of consolidating bureaucratic

institutions--for example, many feel that the University of

Delaware and Delaware State College should be consolidated;

and-there are.many more ways to save,and be more-efficient by
consolidation. Another example, Senator Berndt gave is the

laboratory services,provided by the State. The Medical

Examiner has its own Forensic Lab-oratory and yet the DNREC

has- the same need that is pro vided at the Forensic Laboratory.

An0ther view which was brought up is the fact that

many times the -legislators are concerned about particular.

pieces of legislation on a day-to-day basis while there is

a need for a group such as the Delaware Tomorrow Commission

to look at longrange problems.

,Jay Cooperson; mentioned that whatever the Commission,

suggests and recommends be clearly understood and the only

way to do this is. through a group whose purpose will be to
make'all these findings clear to the public.. Out of the

Commission has come a consensus-, a better understanding)

for instance, has been achieved'between people with different

interests regarding the Coastal Zone.Act. If we are. able to

sustain the same kind of spirit that has animated the Commission,

we can probably do something that will satisfy most people in

Delaware. There is a pressing need to continue the life of

the Delaware Tomorrow Commission beyond the publication of

the report.

Mrs. Greer asked if there was any relationship between

the DelawareTomorrow Commission (and/or its successor) and

the final land use plan that was recommended.

Mr. Keifer said he hoped so. The Commission has given

the task to come up with a statewide land use plan., The

present Commission has the general notion on whatneeds to

be done and it is absolutely necessary that the same people

and talents be involved in the development of the.land use

plan. There has to be a continuity in the development of

the ideas.

Mr. Biondi noted that the Commission has discussed

some very major problems that have been facing the State.
These problems, previously, have been discu ssed in veryloud

voices. This Commission has achieved an across the ta ble

dialogue with positive recommendations and contributions.

It is necessary to continually review and update

the findings of this Commission and by this very need,

there has to be an on-going group to over see this.

It was mentioned that the Commission has found its

existence through a Governor's Executive.Order with a

lifetime duration if so desired--but,.it may be helpful

that the Commission be reaffirmed by joint resolution.

Mr. Thorn also mentioned the fact that the Commission

had suggested to bring the recommendations of the Commission

--tothe legislators through possibly a group appointed by the

Governor.

Mr.. Biondi said that he looks to the present Cofnmisti6ti
OTE: to get this done. Mr.,Biondi suggested that (although this

may cause tome people to be unhappy about his decision) he

would see involving the people who have participated actively

in the di.@cus-sions of the Commission and in the "homework"

of the Committee's (recommendations,.and ... preparation of the.

reports) as, well as those people who have been involved in

a staff function. These people would make up this group.

NOTE: Cotsidering the actual format of the report, it should

'contain:

I. An Introduction indicating why and when the
Commission came into existence.,
II. A general overall summary containing the d ifferent

elements of the report.

III. The report itself should contain all the categories:

Land Use and Community Development, Economic Development and

Cost of Public Setvites; the recommendations of the Committees,

as modified by the resolutions and motions of@the Commission.

reflecting the language the Commission agreed upon. (A preliminary

report was prepared and distributed to the Commission.' This

report was prepared in a narrative form--Mr. Biondi said that
this concept is not acceptable. The report shou-1-d reflect

exactly what the Commission agreed upon).
IV. An Appendix. This appe .ndix should contain the

studies done for the Commission and referred.to in the work

of the Commission; the reports,of the three Committees,as

received by the Commission before the Commission modified them.

the papers such as the ones presented at these meetings

with all the reservations that are contained in the minutes

and. the qualifications and the complete elaboration of their,

meaning;.the minutes of the meetings as prepared.

Possibly, the Appendix could be separate and distributed

on request.

NOTE: The consensus of the Commission was that this was an

acceptable format for the report.

)TION. Through a motion duly made and seconded, the assignment

for the preparation of the report was given to the State

Planning Office. A draft report will be made available to the

members of the Commission by September 5.

AOTE: The definition of "open space",as prepared by Dan

Kuennen was accepted and will be incorporated in the body

of the draft report. If there are any comments, they can

be made at the September 5 presentation.

A motion was made and seconded and unanimously adopted

that "special thanks be extended to Mr. Leon Wiener for.his

hospitality for the use of Wilton Center and to Jane
'for the pr'@paration of the food. A letter will be written

by Dave Keifer to each one@'.

There being no further business, Mr. Biondiadjourned

the meeting.

Respectfully submitted,

Francine Booth
Recording Secretary

DELAWARE TOMORROW COMMISSION

MINUTES OF NOVEMBER 25, 1975

A meeting of the Delaware Tomorrow Commission was held

at 7:00 p.m., November 25, 1975, at the Wilton Community Center.

The following Commission members were present:

0. Francis Biondi, Chairman
David R. Keifer, State Planner
Ross E. Anderson, Delaware State Chamber of Commerce
Peter A. Larsbn, Greater Wilmington Development Council
Frederick G. Krapf, Jr., Fred Krapf and Sons, Inc.
J. Thomas Schranck, Secretary, Department of Labor
John D. Daniello, Secretary, Depart.of.Com., Affairs & Econ. Devpt.
Dorothy Greer, Delaware for Orderly Development
Jay H. Cooperson, Sierra Club
John Walton, Delaware Farm Bureau,
Joann D. Slights, Watch Our Waterways
Ernest W. Thorn, Common Cause
Clifford E. Hall, Secretary, Department of Highways & Transp.
John C. Bryson, Secretary, Dept. of Nat. Resources & Env. Control

Also Present:

E. Sherman Webb, Governor's Office
William D. Markell, University of Delaware
William Bradford, Wilmington Trust Company
Arthur H. Krieger, Krieger, Dwares, and Stein
Spencer Thompson, ICI America
Stephen W. Chamberlin, Leon.N. Weiner, Associates
Carl Russell, County Executive's Office
Merna Hurd, New Castle County 208 Office
Bernard Dworsky, New Castle County 208 Office
Dan Kuennen, University of Delaware

The meeting was called to order at 7:10 p.m. by Chairman

Biondi. Item #1 on the Agenda was a review of the Draft Report

of the Commission. Chairman Biondi noted that all comments made

by Commission and Committee members were noted and checked against

minutes of the meetings and Committee reports. Most of the

changes were incorporated into the report, and Mr. Biondi felt

that the report was revised sufficiently to be addressed at

public hearings. Everyone present agreed with the Chairman.

However, Mr. Bryson did notethat he had found some minor errors

in the Report that were not completely factual.
Mr. Biondi noted that he' had copies of the speech he

delivered to the Delaware State Chamber of Commerce distributed

to the members of the Commission for the purpose of showing that

he stayed within the lines of the report.

The second agenda item was Plan s for Dissemination. The

first 53 pages of the report@is actually the body of the repor.t.

It was reprinted for distribution to the public and a limited

number of copies of the appendix are also available upon request.

as
There has been a fair amount of interest from the press. It w

agreed to send the 53 page report to all Committee members of

the Commission.

Mr. Kuennen@suggested holding a press briefing with down-

State periodicals in order to inform them of the report, its
Gontents, and the Commission!s attempts1to reach the public.

He also suggested a variety of other techniques to reach the

publicsuch as:,slide shows,,TV and Radio talk shows, presentations

at the various colleges in the State, etc.

,.Mr. Anderson suggested that the emphasis be placed on requests

for the Delaware Tomorrow Report as opposed to distributing copies

to uninterested parties.

A variety of mailing lists were discussed, and it was agreed

that,the Planning Office would compile a list, together with

the various mailing lists of other organizations to mail a letter

out indicating the availability of the report, the nature of itp

and where copies may be obtained. It was also agreed that.a

pre ss release be mailed out to the media announcing the public

hearings and where copies of the report may be obtained.

It was agreed that copies of the report should be sent to:

1. All Delaware Tomorrow Committee Members
2. The General Assembly
3. All Public Libraries
4. The Delaware Delegation
5. All Mayors or local officials

The Planning Office will be responsible for distribution of these

materials. Letters notifying the public of the availability of

the report will be sent to the names on the Fortune Mailing List,

as well as the Media through a press release.

on the subject of public hearings, Mr. Biondi stressed that

he felt it was importatnt.that Commission merp.1-jers.attend all the

hearings. It was agreed that the Commission members have an obli-

gation to promote the ideas agreed upon in the Report. The merits

or outcome of the public hearings were debated in great detail.

It was agreed to hold one public hearing in each County. If

there is a necessity for more hearings in a particular County,

they could be scheduled at a later date., The dates of the hearings

will be as follows:

Tuesday, January 6, 1976, Kent County
Wednesday, January 7, 1976, New Castle County
Thursday, January 8, 1976, Sussex County
The locations will be announced by the State Planning Office at

a later date.

Mr. Biondi pointed out that, in addition to the Public

Hearings, there are many clubs, organizations, civic groups,

etc.,'at whose meetings the Commission members might speak and
I'spread the word" of the Draft Report. Commission members are

encouraged to get active.

Mr. Anderson suggested that the first public hearing be

scheduled with the legislature and then hold.the three County

hearings. It was agreed to meet with the General Assembly the
week of January 20, 1976.

The format for the hearings was debated at length. It was

agreed.not to impose a time limit on speakers within reason.

It was moved and seconded that the Chairman decide how the pro-

cedural format of the hearings will take place.

On another issue, Mr. Biondi announced that a report is

available through the New Castle County 208 office, titled:

An Industrial Policy Analysis Paper, prepared by Hamer, Siler,

George, Associates. Copies are available at this meeting and

the Chairman felt that many of the findingsin that report are

similar to the Commission's Report.

.The Chairman said that several issues need to be looked into

regarding the Commission's Report and the recommendations in that

report: 1. We have to identify the level of Government at.

which the various recommendations should be dealt

with, and,

2. We have to figure out the kind of Governmental action

required (Executive Order, Administrative Action,

@Legislation, Planning, etc.)in other words, what now?

The Chairman further questioned whether the Commission, as

a group, ought to look into these issues, or if they should be

turned back-to the three Committees.

Mr. Keifer suggested that the Technical Advisory Committee

be given a "first shot" at the recommendations and prepare .a re-

port to be sent to the Commission and other Committee members,for

their reacti on.

Mrs. Slights felt tha t the Commission would be out of order

to begin drafting legislation prior to the public hearings.

Mr. Biondi said that there no basic objections to asking

all Committees (including the TAC) to identify the levels and

nature of governmental action necessary to implement the report.

The Committees, through their Chairmen, are therefore requested

to do so.

Mrs. Slights, quoting from the Hamer, Siler, George Re p ort

discussed above, noted an inaccuracy on the first page: "A.l.

Delaware Tomorrow Commission has recommended the development of

a Statewide Land Use Plan to remove the inequities of the Coastal

Zone Act". She pointed out that nowhere in the,Delaware Tomorrow

Commission Report is that stated. Mr. Biondi pointed out that

this report is also a draft and any problems Commission members

have with this report should be brought to the attention of the

New Castle County 208 Office.

Mrs. Slights made a motion that Statement A.l. of the Hamer,

'Siler, George Report is an inaccuracy. Mr. Walton seconded that

motion. Representatives of the 208 office pres ent made note of

the error.

Mr. Biondi requested that Commission members take the time

to read the entire report, as it has merit. He further asked

Mrs. Hurd (Director of the.New Castle County 208 Office distri-

buting this report) to bring to the consultant's'attention that

the Delaware Tomorrow Commission has recommended the development

of a Comprehensive .Statewide Land Use Plan, however, the removal

of the inequities of the Coastal Zone Act is not a recommendation

of the Delaware Tomorrow Commission. If that is a subjective

evaluation of Hamer, Siler, George,Associates, they should state

it as such. The principle purpose, for which this report was

distributed,was to provide another view of th e same problems that

the Delaware [email protected] looking at.

There being no further business of the Commission, Mr. Russell

moved that the meeting be adjourned. This motion was seconded

and approved by all present.

Respectfully submitted,

-A-A-

Dee Burkley
Recording Secretary

DELAWARE, TOMORROW COMMISSION

MINUTES OF JANUARY 28, 1976

A meeting of the Delaware Tomorrow Commission was held at.

7:30 p.m., January 28, 1976, in the Center Conference Room of

the Highway Administration Building. The following Commission

members were present:

0. Francis Biondi Chairman
David R. Keifer State Planner
Joann D. Slights Watch Our Waterways
John F. Walton Delaware Farm Bureau-
Dorothy Greer Delaware for Orderly Development
Ernest W. Thorn Common Cause
Theodore W. Ryan Building Trades Council
Robert Berndt - State Senator
Ross E. Anderson, Jr. - Delaware State Chamber of Commerce
Clifford E. Hall - Department of Highways and Transportation
Peter A. Larson - Greater Wilmington Development Council, Inc.
Marcie Bierlein - League of Women Voters
Jay N. Cooperson - Sierra Club
Leon N. Weiner - Leon N. Weiner and Associates, Inc.
Marion I. Seibel - State Representative
J. Thomas Schranck - Department of Labor
John C. Bryson - Department of Natural Resources
Frederick G. Krapf, Jr. - F.G. Krapf and Son, Inc.
Carl S. Oldach - Retired
Edward O'Donnell Proxy for Mel Slawick, New Castle County

Also Present:

E. Sherman Webb Office of the Governor
Arthur.H. Krieger Krieger, Dwares., and Stein
William Bradford Wilmington Trust Company
Jorene Coffay - Mayor's Office, City of Wilmington

Chairman Biondi called the meeting to order at 7:45, p.m.

He noted several changes to be made in the transcripts of the

three public hearings. These changes are as follows-

January 6, 1976, Kent County Hearing:

Page 8, Paragraph 4, (MR. BIONDI: I don't know who it is.)

The word "who" should be changed to "where". . . . if that's

what the portend of. the word "Portend" should be changed

to portent".

Page ll,, line 12 . . . the services or are we overgoverned

in this State.),.the'phrase should be amended to read,". the

services. Are we overgoverned in t his.State?" In line 13,,
. . . of government as we currently exist?), the word "we"

,should be stricken from that phrase. Line 16 ( . . . the first

question which I was being asked. . . ), the word "I" should be

changed to "he". Line 22 ( . . . to get and try to name a number.),

the wor.d "get" should be changed to "go". Lines 24 and 25 they

are at the present time. That absents new. should be amended

so as to read they are at the present time-absent new.

Page 12, line 1 of revenue as a measure to go to.),

should be amended to read "of revenue as a way to go".

January 7, 1976, New Castle County Hearing: No Changes.

January 8, 1976, Sussex County Hearing:

Page 4, line 11 ( . . . conclusion that if conservation . . .

should be amended to read conclusion'that if conservative".

Line 14, new levels of taxation, where levels of . . .

the word "where" should be stricken.

Page 14, Line 7 under MR. BIONDI:, the word "New Castle

County" should be changed to "Sussex County".

Page 15, the second statement by MR. BIONDI . . . has been

opposed by the Civil League . . . the word "Civil" should be

changed to,"Civic".

Page 17, Mr. Biondi's second statement,line 4 I'll

have more f@armland.), the word "farmland" should be changed to

Uparkland". The last sentence on page 17 ( . . . just don't

happen in the real world -- or should they?) should be amended

to read "just don't happen in the real world--nor should they-

Page 21, under MR. BIONDI:, line 5 and 6 1 think

some of those were concerned about the Coastal Zone have argued

in the past, and it wasn't the Coastal Zone Act, should

be amended to read I think some of those who were concerned

about the Coastal Zone have argued in the past that it wasn't

the Coastal Zone Act.

That concluded Mr. Biondi's corrections to the transcripts

of the public hearings, however, Mrs. Slights felt that there

may be some inaccuracies to Mr. Welch's statements at the Sussex

County hearing, Mr. Biondi said that, due to the fact that

people spoke from their seats instead of at the microphone, we

had great difficulty understanding much of that he aring. If
she would like to submit any corrections, we would be glad to

make the necessary changes.

Mr. Biondi noted that everyone had received the minutes

of the public hearings. He felt that the next step would be

to consider the.report in light@of the comments made at the

hearings. One point made by several speakers, which is not

addressed in the Commission Report, is the recommendation that

the Commission continue in existence to evaluate and monitor

the policies they have suggested. He also pointed out that

the Sussex County Council recommended that the.Commission "get

the hell out of business". The Chairman felt that we ought to

consider the question of the continuing role of the.Commission

as we look at how we see the Commission's role with respect to

implementation and the Land Use Plan. He asked that everyone

keep this issue in mind. The Commission then went on to address

the issues raised on the Commission Report.

COMMUNITY DEVELOPMENT PATTERNS.

On Page 17, Mr. Lipstein, of the New Castle County Civic

League, supported the recommendation on Urban Development. The

League of Women Voters.raised some issues on Page 17. They

said that the Commission's emphasis is on incentives, presumably

public finance, with no mention of deterrents, and yet the

section on the Cost of Public Services presents a bleak picture

of revenues versus current expenditure. They asked that the

Commission include a discussion of deterrents for low density

development. Ms. Bierlein furtherstated that the League of

Women Voters wanted to know if the Commission had considered any

disincentives. Mr. Weiner said that the statement, as it is

presently written, emphasizes incentives. He felt that, in a

free society, you cannot talk about deterrents or punitive

action. He.felt that the statement, as written, is a construc-

tive one and should be used as a guide.

'Mr. Biondi asked if the Commission should modify its re-

commendations with respect to Community Patterns Policies to

include specific deterrent/penalty type recommendations in the

report. Ms. Bierlein said tha t the League was not necessarily

saying that they should, they were asking if it,had been con-

sidered. Mr. Larson, Chairman of the Land Use and Community

Development Committee, said that he knows of no instance in

any other State where legal deterrents have been adopted to

enforce development policies of this type. Mr. Coope .rson

suggested striking the words "punitive action" from the Com-

munity Patterns Policies section. Mr. Larson said that he

would prefer to see the policies implemented through the

traditional land use controls (zoning and su bdivision regula-

tions) than try to impose another layer of regulations.

MOTION: Mr. Krapf moved that the Community Patterns Policies be

left as written. This motion was seconded and agreed to by

all present.

The League of Women Voters raised another question on the

section titled Community Patterns Policies. They asked several

questions regarding the term "available capacity"; specifically,

"what type of program does the Commission suggest to encourage.

movement into existing housing?" Mr. Larson pointed out that on

Page 20 of the Commission's Report, the section titled "Tax

Measure Recommendations" include:"l. Changes in'p Iroperty tax

mechanisms to encourage renovation and rehabilitation of older

properties." He said that would cover housing as well as all

non-residcrLuial properties. The League also asked "if a relo-

cation of the public school population were to occur, such that

empty classrooms existed in one area, does the Commission mean

that the State should withhold capital funding for new classrooms

elsewhere? Mr. Krapf felt that issue was properly addressed in

the Report and should not be changed. Mr. Weiner agreed that

the statement should not be changed. He felt that the Commission

should try to provide incentives. The minute you try any

punitive action of any kind, we will impose a state that we will
regret, in terms of freedom of 'movement.

MOTION: Mr. Larson moved that the Commission confirm their draft

recommendations with respect to the Community Patterns Policy

section in its entirety. This motion was seconded by Mr. Krapf

and agreed to by all present.

TRANSPORTATION FINDINGS AND POLICIES

The Commission went on to discuss the comments on the

Transportation Findings Policies (page 18 and 19). At the

New Castle County Public Hearing, Mr. Drexler recommended that

the Commission should consider increasing the licensing fees on.
.automobiles and increasing the tax on gasoline to encourage the

development and use of public transportation. Mr. Weiner said

that, once again, the Commission is heading.in the direction of

punitive action. What we need is the incentives of the develop-
ment of atransportation policy that will provide the kind of

mass transport ation, so that it becomes efficient economically

to, abandon the use of cars and to encourage carpools, etc. He

further stated that the Commission's policy should remain as

written. There were no motion's that the Commission recommend
that we increase license fees and gasoline t@xes on automobiles

to encourage and use of public transport ation.
the development

Mr. Lipstein, representing the New Castle County Civic
League, recommended that "mass transportation" should be' used

where it is economically feasible, but the subsidy of mass trans-

portation should be restricted to those routes which can operate

MOTION: on income provided by fares.. Mr. Krapf moved that that recom-

mendation be adopted. This motion was seconded by Mr. Kreiger,

however, after further reading and discussion, it was agreed that

this recommendation not be included in the policies of the

Commission. Secretary Hall said that it was a good thought,

however, realistically, if we are going to have mass tran sit,

it will have to be subsidized.

The New Castle County Civic League further recommended

that a Department of Transportation encompass land, sea, and

air--much like the Port of New York Authority. Mr. Larson

stated that that idea had been discussed by the Land Use and

Community Development Committee.

Mr. Biondi noted that the League of Women voters did not

object to this section on Transportation Policies, however, they

did point out that they would like to see some specific recogni-

tion of the impact of new roads on development, along with a

.recommendation that such new roads be locatedin conjunction with

the Commission's other priorities--that is, non-sprawl develop-
ment, preserving farmland, etc. It was pointed out.that No. 4

o
page 19 addresses this suggestion.
il

Mr. Matlack spoke at the New Castle County Hearing and

advocated using highway money to finance a metroliner to Reho-

both and to Rodney Square. He also suggested that the govern-

ment require that a car on a major traffic artery during rush

hour have at least three people in it. There were no motions,

by the Commission, to implement any of these recommendations.

Mr. Biondi noted that Mr. Dill, at the Kent County'Hearing,

saidthat there seems to be a 1contradiction in the Report: one

area says that there is too much highway development, and for

example, if you take the 2% of the land surface of Delaware,

which is already devoted to highways, and if you were to' take

the area north of the B&O railroad in New Castle County and

find that fully 10% of that area is already devoted to highways,

then he would agree that there is too much highway in the State.

Mr. Dill also pointed out that the report indicates that we have

fallen behind in highway construction. Mr. Cooperson agreed

that this area needs clarification. He pointed out that page

32,,paragraph three, sentence two may not be in direct conflict

with the rest of the report, however, it may be misinterpreted.

The League of Women Voters also questioned this paragraph.

There was also a problem raised with the. first Transportation

Finding on page 18.

MOTION: A motion was made by Mr. Krapf to amend Number 1 under

Transportation Findings to read:"High reliance solely on the

personal automobile in urban area for transportation contributes

to urban sprawl.". This motion was seconded by Mr. Thorn and
a.gre.ed to by all present.
MOTION: A further motion was made by Mr. Krapf to amend Paragraph

3 on page 32 so as to make the sentence "The economic vitality

of Delaware has declined markedly" a paragraph on its own, and

to start the next paragraph with "Delaware has fallen behind

in its highway programs. Upgrading of the highway system has

not kept pace with expanding population and transportation

demands. This motion was seconded by Mr. Cooperson

and approved by all present.

Mr. Daniel Ryan (at the New Castle County Hearing) stated

that the "automobile should not be penalized before the ability

to have mass transit is available." Mr. Biondi felt that that

statement is not in conflict with the Commission's recommendations.

UTILITY FINDINGS AND POLICIES

The Commission went on to discuss comments on the Utility

Policy section. The Delaware Society of Professional Engineers

noted that they agreed with the Commission's Utility Finding #2,

("the routing, signing, and timing of new utility installations,

especially int erceptor sewers, can be a valuable tool for guid-

ing land use"). However, they further pointed out that "Public
Funding Recommendation", Item #2, of not funding utility

capacities beyond immediate needs is in conflict. Secretary

Bryson said that the Commission's statements are consistent
with federal law. Mr. Biondi agreed that the DSPE had read

something into the report which was not actually there.

Mr. George Harrision, from Rehoboth, generally agreed

with this section. Mr. John Tarburton, representing the Dela-

ware State Crange, made a statement at the New Castle County

Hearing. M r. Biondi asked Mr. Walton if he though Mr. Tarburton

was asking the Commission to make any additions or changes to

the report. Mr. Walton felt Mr. Tarburton's statement was in

agreement with what the Commission has stated. He interpreted

Mr. Tarburton's statement to mean that if each County were to

enforce some type of land use control, there would be no need

for discussion of farmland preservation.

AGRICULTURE AND FARMLAND

At the Sussex County Hearing, Secretary Isaacs felt that
the Commission should not only address food in the Agriculture

Section, but also fiber and timber production. Mr. Biondi,
therefore, suggested that #1 under Agriculture and Farmland

Findings, be amended to read "Protection of Delaware's prime

farmland will assure continuation of a viable agricultural

industry, including food, fibre, and timber production, and

making sure Delaware residents have locally grown food avail-

able and,taking Advantage of Delaware's climate and nearby

MOTION: markets in Eastern population centers." It was moved and

seconded that Mr. Biondi's suggestion for amending the first

finding under Agriculture and Farmland be adopted. This motion

was carried.

Secretary Isaacs further pointed out that the Commission's

recommendation for Agriculture and Farmland Policy is that we

should preserve and protect prime farmland as defined by the

U.S. Soil Conservation Service and includes land classified as

I, II, and III. However, there is land, in Sussex County,

'which has been reclaimed which would not be prime farmland

within the meaning of that definition, but should be prime

farmland from the point of view of its preservation as farmland.

Mr. Biondi though there was a question of definition or classi-

fication in that section. He asked Mr. Keifer what his office

has done in this area. Mr. Keifer said that, as he understands

it, the problem is using Class I, II, and III. There is

another definition being drawn up by the Agriculture School

personnel that includes Class I, II, and III as well as re-

claimed land. Mr. Biondi suggested amending this policy to

read "Delaware should preserve and protect its prime farmland

as defined by the Department of Agriculture of the State of

Delaware". Mr. Weiner expressed disagreement with this sug-

gestion due to the fact that he felt you were talking about

an individual or a Department at a given moment. There was
IOTION: no motion on this suggestion. Mr. Larson made a motion that

the "Agriculture and Farmland Policy" be amended to read:

"Delaware should preserve and protect its prime farmland in-

cluding lands classified as I, II, and III and including pro-

ductive reclaimed farmlands." This motion was seconded by

Mr. O'Donnell and approved by all present.

On this same section, the League of Women Voters asked

the Commission to distinquish between "preserving" and "protect-

ing" more specifically. Ms. Bierlein felt that the term "pre-

serve" conotates long term activities, whereas "protect" is

more short term. Mr. Larson felt that the words "protect" and

preserve" ha-,@e a deliberate redundancy and that the words

are essentially synonymous.

The League of Women Voters questioned whether the Delaware

Tomorrow Commission might have any impact on the problems with

inheritance and estate taxes at the federal level, or did the

Commission intend to modify only the State inheritance tax laws?

Mr. Biondi said that the fact is'that the evaluation used

for the farmland is the same evaluation that would be used

for federal inheritance or estate tax laws. Mr. Weiner noted

that there is current legislation in the Congress to deal with

this at the federalIevel. The Commission's policy and concern

is to make sure that if it is corrected at the federal level,

that the State have an existing policy that would attract that

kind of thing. He felt that the recommendation is well stated.

Several other questions were raised by the League of

Women Voters on the Agriculture section, however, after lengthy

discussion, it was agreed that the Commission had covered the

i.ssues as clearly as possible. Specifically, the League sug-
ge sted that the formation of agricultural districts be included

as one of the possible incentives to be investigated. Mr.

Larson agreed that this might be a sound suggestion, however,

he felt that this area would be covered in the Commission's

call for a Statewide Land Use Plan. The incentives that the

Commission has suggested are non-planning type suggestions.

Mr. Weiner noted that he agreed with the statement on Implementa-

tion of Agriculture and Farmland Policy as written, and he

though it ought to be recognized that this is a general state-

ment of policy that we should preserve and protect'and

indicates some direction. lie does not think that this policy

statement is an absolute caveat that a given piece of land

shall never be put to any other use (other than farming).

OTION: A motion was made that the section on Agriculture and

Farmland be left as amended. This motion was seconded and

agreed to by all present.

CONSERVATION AND OPEN SPACE

At the Kent County Hearing, the Delaware Society of

Professional Engineers said that they support the policies

and implementation measures listed on page 24, however, they

felt that public acquisition of open space should be.limited

to unique and important conservation areas and areas for

planned park and recreation space. They assumed that imple-

mentation policy #2 on p'age 24 had that intent. Mr. Weiner
LION: moved that Implementation Policy #2 b e left as written. That
motion was seconded andapproved by all present.

At the Sussex County Hearing, Mr. Showalter spoke about

the use of acquifers, however, Mr. Biondi did not feel he

was speaking to any specific issue in the report.

RESIDENTIAL LAND

Mr. Miller, representing the DSPE, felt that some limit,

on the number of public housing units to be developed in each

population center must be established. Mr. Dill, at the Kent

County Hearing, expressed concern with the lack of concern

over the distribution of low income housing and its relation-

ship to the busing issue. Mr. Stazesky, of CHAD, issued a

general statement of support for this section, with emphasis on
Policy #2. The @eague of Women Voters questioned what powers

and duties would an expanded Division of Housing,have? How

would it differ from the present Division of Housing. The

New Castle County Civic League questioned the use of "ade-

quately housed"'in both the second and third policies unless

the word "adequately" is defined as "meeting the minimum

standards of a housing code", which Delaware should have.

COMMERCIAL LAND

At the Kent County Hearing, Mr. Miller (DSPE) agreed

that commercial development should be zoned in clusters and

coordinated with planned pop ulation centers, and that strip

highway commercial development is undesirable. However, once

areas are designated for commercial development, a developer

should be able t1o proceed through the normal permit process

without any additional need to justify a project. Mr. Biondi

said that he saw no conflict with that statement and the report.

Mr. Lipstein, of the New Castle County Civic League,

stated that "rather than curtail commercial strip development,

we should require parallel local roads with limited access to

our main highway network. Such a policy would meet the criteria

for clustering highway oriented uses rather than stringing

them along the highways". Mr. Weiner felt that this recommenda-

tion was a specific plan, which does not belong in a broad

policy statement, however, his recommendation is not in con-

flict with the Commission's sLanding.

MAJOR INSTITUTIONAL LAND USE

Mr. Dehan, of the Wilmington Medical Center, issued a

lengthy statement at the New Castle County Hearing, defending

the Wilmington Medical Center, and outlining their planning

and coordinating process. Mr. Larson said that he had

.drafted the statement on Page 27, which had been discussed

and modified slightly, and he saw no reason to change this

section. Mr. Larson further said that the policy statement

did not address the issue of whether the Medical Center should

build at Stanton or not. He felt that Mr. Dehan merely suf-

fered from a.guilty cons cience.

Mr. Hughes issued a statement at the New.Castle Hearing

supporting the Commission's recommendations on this section.

Mr. Miller, of the DSPE, supported the Commission s

recommendations. Mr. Lipstein, New Castle County Civic League,

said that they questioned the fact that it is not recognized

that if a site fits all other criteria, but is contrary t o

land use planning, we must presume that the plan might be 'at

fault and so should consider revision of the plan. Mr. Larson

felt that if you go through all the steps that are outlined

in Policy #5, you will develop a plan that is acceptable.

Mr. Weiner felt that the last sentence in Policy #5 is poorly

stated, and that Mr. Lipstein's comments are valid. That

statement, in his opinion, puts the priority of a land use

plan above the question of a consideration of a site. Mr.

Keifer said he believed the object of that sentence was to

make the point that the Division of Economic Development should

not be out selling sites.when those sites conflict with adopted

land use plans. There should be a coordinated effort there,

and if the Division of Economic Development will be trying to

get industrial developers to sites, they ought to be working

within the context of adopted land use plans. Mr. Weiner felt

that this should be specified. Secretary Bryson said that he

did not think any plan was ever that final. Mr. Weiner suggested

that the last sentence in Policy #5 should be amended to read:

"The State shall not promote the inclusion of a site for indus-

trial purposes without consulting with the appropriate agencies

in the event it is contrary to the existing land use plan for

that area". Mr. Larson felt that that sentence, as written

MOTION: originally, expressed Mr. Weiner's concern. Mr. Weiner moved

that Policy #5 be amended to read: "The State shall not promote

the inclusion of a site, for industrial purposes, when utiliza-

tion for tha t purpose has not been reviewed with the appropriate

agencies, if it is contrary to the land use planning in the area."

This motion was seconded by Mr. Thorn, however, the motion was

defeated.

ECONOMIC DEVELOPMENT

On page 32, the second paragraph from the bottom, Secretary

MOTION: Bryson moved that the phrase "and air pollution problems have

become a major issue north of Wilmington" be stricken from the

report. He said this is an incorrect statement, as there is no

longer an air pollution problem in the State. Delaware has met

its secondary standards, and we are in great shape. Secretary

Bryson's motion was seconded by Mr. O'Donnell and approved by

all. present.

Mr. Cooperson raised a question on page 34, in the last

paragraph. He read the sentence "The Delaware Tomorrow Commis-

Sion should establish population and employment growth goals

considering such things as internal population growth,

in-migration, type and amount of new businesses desired,

and a forecast of the resulting changes in State income and

expenses." He felt that that sentence was in conflict with
the sentence on page 14, paragraph 3, second sentence, which

states "The Commission feels the establishment of an arbitrary

employment or population rate of growth policy, either by

specific number or percentage will not be effective and it

MOTION: may, indeed, be counter-productive." Mr. Weiner moved that

the sentence indicated on page 34 be stricken from the Report.

Mr. Larson seconded this motion and it was carried.

In a letter to the Commission, Mr. Dave Williams noted

that "stripping away all the typical report verbiage, Delaware's

major problem is fiscal responsibility. Mr. Biondi felt

that Mr. Williams' concerns were addressed in the report. Mr.

Williams further stated that he felt that "the Commission

should come out and say that the Delaware State Chamber of

Commerce has been ineffective as a private organization in

bringing business to Delaware." There were no motions to
change the Commission's Report to incorporate any of Mr.

Williams' s-uggestions.

There were no basic disagreements with the Civic League

and their statement on this section.

Sussex County Council submitted a letter to the Commission

with their comments on the Draft Report. Their letter indicated

that the emphasis of the Economic Development Section is mainly

on the redevelopment of the City of Wilmington. Mr. Biondi

felt that this was simply not true The Sussex County

Council further noted that "the Commission has placed itself

squarely in a position of impeding the devel opment of Sussex

County." Mr. Biondi pointed out that the Economic Develop

ment Section did indicate-that the two areas which had sustained

economic losses were the City of Wilmington and Western Sussex
County. The Commission did discuss specifics in improving@the

economic climate if the City of Wilmington; however, they did

not discuss.specifics for Sussex County. The Council letter

listed four specific recommendations for inclusion in the

Commission Report. They were each discussed as follows:

"'(a) That the Recreation Industry be treated in the
same manner as any industry in belaware--'.' Mr. Walton pointed

out that in the middle of Page 36', this issue is addressed as

follows: "These capabilities should include the 'T arget

Industries Program' for recruitment of industries best suited

to Delaware, financial aid to expand tourism,and recreation

facilities, a program to attract foreign firms.

"(b) That increased financial aid to expand tourism and

recreation facilities be included in the State budget; the,
County should explore the possibility of joint funding such

expansion. Fees charged at State Parks to Delawareans should

be immediately discontinued." it was agreed that therewas

too much detail in this recommendation.

"(c) That the economic base of Sussex County be expanded

through the at traction of a more diversified industrial base

to the County; efforts should be made to assure that all

perspective industrial clients are shown the.entire State."
Mr. Krapf.agreed with this recommendation, however, several'
members of the Commission'felt that this issue had been
addressed in several areas of @he report (including page 36).

In spite of these comments, everyone agreed that there was

no policy reason for not including a section entitled "Sussex

County Findings" following the "City of Wilmington Findings

on page 43, incorporating recommendation (c) of.the Sussex

County Council letter. It was agreed to change the word

11perspective" in (c) to "prospective".

"(d) That the people of Delaware must be educated about

the economic problems of Sussex County so thata more realistic

attitude towards the planned and ultimate development of the

County can be obtained; it is time that the people of Delaware

realize that there is more to Sussex than our beaches." It

was also agreed to include this recommendation into the @"Sussex

'County Finding" up to the word,"obtained".

MOTibN: It was moved by Mr. Weiner, and seconded by Secretary

Hall that the Commission include a section titled "Sussex

County Findings" into the Commission report which will in-

clude recommendations (c), changing "perspective" to "prospective"

and (d), down to the word "obtained". This motion was agreed

to by all present.

Mr. Larson said that the Commission had.recognized the

southern counties in the Delmarva Advisory Council Findings on

Page 39. Mrs. Slights asked if Kent County might not feel

slighted as averyone is mentioned except Kent County. Mr.

Biondi said that he hoped not.

On page 32, the League of Women Voters questioned the

statement "the total cost of new industrial construction in

Delaware has become expensive". The League did not disagree

with this statement, but pointed out that it is equally true

of the other 49 states. They asked if the inclusion of this

statement was meant to imply that industrial construction cost

has rise n more in Delaware than in other States? After a

lengthy discussion, it was agreed to strike the second sentence

on page 32, and amend the first sentence to read "Delaware can

no longer expect to grow rapidly simply because of.its formerly

competitive edge in the cost of industrial construct ion." The

MOTION: above recommendation was moved by Mr..Weiner, seconded by Mr.

Larson and approved by all present.

Mr. Fran Land Value Tax Connittee
k Nelson representing the

of Delaware, at the New Castle Hearing, stated thatproperty
tax reforms, along the lines that his group suggests,. would.be a

helpful tool to achieving the land use goals which are contained

in the Commission Report. Mr. Biondi felt that the Commission

is not sufficiently versed to take up the problem of property.

tax valuation. Mr. Weiner said it was a question of chang-ing
our complete basis of taxation and-that for the Commission to

arbitrarily take a stand on this issue would be unfair. Mr.

Cooperson asked if there was any way that the Commission could

make a note, since the Commission has suggested several times

in the Report that tax reform be considered, that real estate

tax policy reform also be considered. Mr. Larson felt it

would be wrong, at this time, to mention a s pecific tax re-

form, such as site valuation. Mr. Weiner agreed that a res o-

lution by the Commission, on this.issue, is not necessary,

however, these.ideas ought to be passed on to the appropriate

people in State government, planning departments, etc.

Mr. Bradford point ed out that several statements are

made on page 43 of the Commission R eport concerning one of

the taxes, and he felt that the property tax may bring in the

second highest of the taxes assessed in the State. He felt

that perhaps, as Mr. Cooperson. suggested, at least a statement

that this should be studies also, should be included under

the section on Tax Findings. Mr. Biondi said that suggestion

would be considered when we reach that page.

PROPERTY TAXATION,_LAND USE AND PUBLIC FACILITY FINDING

On page 39, Mr. Biondi pointed out the recommendation:

"The State should study a revenue sharing formula for commer-

cial-industrial revenue so that all jurisdictions of our small.

State willshare in the revenue equitably." He noted that Mr.

Conaway "raised hell with us about that." Mr. Russell., at one

point in thpt 'hearing, tried to explain it. The Civic League

of New Castle County did not want any part of it. Mr. Bradford

thougl-tthat this recommendation could be included as part of

one general section on taxation. Mr. Weiner felt that this
recommendation says that "the Statemakes a sizable contribution

to an Economic Development Department. That Economic Development

Department brings major industries all into a given local tax

jurisdictional area, who benefit from that tax area, but

they use the State general fund to benefit that single area."

Mr. Weiner further explained that this recommendation says

that we ought to take a look at the equities involved.

Therefore, Mr. Weiner felt that the recommendation, as it

now stands, should not be disturbed. This,was generally

agreed.to..

DELMARVA ADVISORY COUNCIL AID FINDINGS

Mr. Slawick, at the New Castle County Hearing, said that

if financial aid were given to the Delmarva Advisory Council,

which covers only part of New Castle County, he felt that "some

mechanism needs to be created to assist in stimulating the

economy in the northern part of the-State." Mr. Biondi felt

that the overall recommendation, made by the Commission, dealt
with the State in general.

ion that the entire paragraph under
MOTION: Mr Walton made a mot

Delmarva Advisory Council Aid Findings be stricken from the

Report. Ms. Coffey, representing Mayor Maloney, said s he felt

that t he Delmarva Finding was in conflict with the.recoTnmenda-

tion on page 36, which called for a Statewide Economic Develop-

ment Act. She, therefore, supported Mr. Walton's motion. This

motion was seconded by Secretary Bryson and approved by all

present.

'PRIVATE FINANCIAL SUPPORT FINDINGS

Mr. Bradford felt that the recommendation in this section

was meaningless, as he has stated on previous occasions. How-

ever, he also pointed out that the sentence preceeding this

recommendation.is misleading. It, presumably,. s ays that

Delaware banks should have the same percentage of business

loans as any other State for the average of all banks in the

Country, which is suggesting to the banks how they should

run their business. Mr. Bradford felt that this was not the

prerogative of the Delaware Tomorrow Commission. He did'not

think an yone would quarrel with the statement "Delaware's

Banks should be encouraged to give greater leandin g support".

However, he felt that to tell the banks that they haveto give

more loans to business is,"crazy". Mr. Krapf noted that he

had voted against this sentence previously, and he would..

note against it now. Mr. Bardford said he would present the

position of Secretary Daniello, in his absence, concerning

the purchase by Delaware banks of industrial bonds.

Mr. Weiner made a motion that the heading."Private

Financial Support Findings" and the paragraph following the

heading be stricken from the Report. However, the recommen-

dation in this section will remain in the report, being placed

with the recommendationsunder "State Financial Inducement

Findings". This motion was seconded by Mr. Krapf and approved

by all preseric.

STATE AND LOCAL PROGRAMS

Mr. Showalter, at the Sussex County Hearing, felt.that

the Commission should address itself to solar power and wind

power. The Commission felt there was no contradiction with

their recommendations in this section.

The Civic League of New Cas@tle County felt that the

Com.m.is-sion should reword the sec:ond recommendation in this

section toread: "Delaware's utility companies must develop

a plan for meeting long and short term,energy needs for

business and industry including i@he development of newenergy

sources and the conservation of present energy to the satis-

faction of the Public Service Cornmission". Mr. Weiner felt

that the wording the,Commission has in this.recommendation is

inclusive., There were-no motions to amend this section.

RAIL SERVICE FINDINGS

The Civic League of New Castle County said that "they

strongly support the State doing all in its power to insure

continuation of the Railroad Freight Service--and we continue
to support the constructionof the north-south toll road--

..as,the only viable alternative means of,delivering goods,

people, and.services to the lower parts of the State in the

failure of the rail transportation system". Mr. Walton said

that, because the bridge went out at one time, people think

thewholerail system "went to pot". He felt it might be more

feasible to.build-two,rail crossings over the canal than.it

would be to build a toll road in the State. Secretary Hall.

noted that the toll road wouldn't cost anything, however, the

rail crossings would cost "a bundle" and the Corps of Engineers

would not do it. There were no recommendations to change this

section, hwoever, Mr. Cooperson requested that the editor.olf

this report make an effort to "clean up sloppy grammer".

CITY OF WILMINGTON FINDINGS

The Civic League of New Castle County felt that the

"Wilmington Wage Tax" is one of the major reasons why middle

and upper income people are moving out of the city and think

that perhaps some transfer of services to thenext higher

level of government would enable use of a tax based on a

broader geographic area (such as a county-wide supplement to

the State income tax). The Commission saw no reason to amend.

this section.

TAX FINDINGS

Comments were made by Mr. Williams and Mr. Lipstein at

the New Castle Hearing. Mr. Lipstein (New Castle County Civic

League) advocated "piggy-backing of the State's income tax

on the Federal". The League of Women Voters said that they

want it to be clear to all who read the Commission Report

that, if capital gains and personal income taxes are adversely

affecting business location, it is because the business leaders

are making such decisions on personal consideration.

Mr. Oldach said that the recommendation in this section

simply says that we should make a study. He suggested that

this recommzndation be amended to read: "An objective study

of Delaware's income and capital gains.tax structur e should

be made promptly to bring the personal income tax rate, in-

cluding capital gains, in line with more progressive states".

Mr. Weiner modified Mr. Oldach's recommendation to read: "An

objective study of Delaware's income and capital gains tax

structure should be made promptly in order to alleviate the

serious disadvantage which Delaware now has in competing

with other progressive States for new business". He said,

"in other words", you don't want@ to just study it, you want

to study it in order to propose'a program of action". Several

Commission members,expressed concern with theuse of the word

progressive". Mr. Biondi further amended this recommendation

to read: "An objective study of Delaware's income and capital

gains tax structure shoul.d be made promptly and the necessary

changes initiated to place this State in a more competitive

MOTION: position with other States". Mr. Larson moved that Mr. Biondi's

amendment to this recommendation be adopted. This motion was

seconded by Mr. Krapf and carried.

Mr. Bradford questioned whether the "piggy-back" issue

should be addressed specifically. It was agreed that the study

should cover this issue automatically.

OFFSHORE OIL AND GAS DEVELOPMENT FINDINGS

There were no comments made on this section in conflict

with what was written.

LAND USE PLANNING AND REGULATION

Mr. Biondi said that there were specific recommendations-

made on this section by the Delaware Society of Professionhl

Engineers. He further stated that the comments made on this

issue were generally supportive. There were two other posi-

tions expressed: 1. The recommendation that, in the Land Use

Planning And Regulation Section, the Commission take a position

that the Coastal Zone Act be included as part of the Land Use

Plan recommendations, that it remain intact in any Land Use

Plan which is developed; 2. The recommendation that the Commis-

sion not advocate the retention, even as i nterim guidelines,

of the Coastal Zone Act (as regulatory mechanisms during the
interim period). The overwhelming.pos ition taken at the public

hearings were in favor of the recommendation as written. Mr.
kOTION: Weiner moved.that this section not be changed.
Mrs. Slights felt that the Chairman did not paint "quite

aclear picture of this issue". Out of 31 speakers, 9 spoke to

the issue of retaining the Coastal Zone Act in its entirety.

There were three who indicated an opposing view. Mr. Biondi

said that there was also a majority of the public who did not

show up. He felt that there were three positions taken-

1. That the Commission recommend that the legislature

and anyone else involved lock itself into the cur-

rent provisions of the Coastal Zone Act, as it cur-

rently stands, as a necessary inclusion in any land

use plan;

2. That the Commission should immediately repeal the

Coastal Zone Act and not continue it in existence

unt4I a land use plan is put into effect; and,

3. The position of.the Commission and that of the Land

Use and Community Development Committee, which is

spelled out in the Report.
Secretary Schranck seconded Mr.. Weiner's.motion that this
section not be amended. On the question, Mrs. Slights felt

that the Commission was not dealing with this question as

fairly as they had: dealt- with, other comments made at the

Public Hearings. Secretary Bryson felt that the purpose,

of the Statewide Land Use Plan. was to avoid some of the in

equities between the present Coastal Zone Act for the total

State without destroying the concept of protecting, the Coastal

zone. He said there was no point in incorporating,the Coastal.

Zone Act "in toto" into a Land Use Plan. Mrs- Slights. said
the Commission has not addressed the issue. of how. we are going
to deal with legislation, such as,, the Beach Er0sion Act and the.

Wetlands, Act,.after we superced them. Many, speakers at the.

public hearings felt that the issues covered in the, Coastal

In support of his motion, Mr. Weiner pointed out that-

there were several people who, having read the Commission's

recommendation, did not come up to,testify for or against the

Coastal Zone Act, but who. have understood that the,Commission's

proposal was, that: (1) the present regulations, are to remain

intact until a: new Plan, and new, regulations are developed, and

(2) at that time, the Comprehensive, Statewide. Land Use Plan

would supercede the, current Act., because it would-be a much

broader thing. The. Commission's sentiment is that the coastal

Zone. Act provisions, would be given due consideration.

Mr. Larson felt that those ,who advocate the retention of

the, present provisions of the Coastal Zone Act ought to address.

that position to those drafting the Statewide Land Use Plan.

The Commission is not going to draft. the,Statewide Land Use

Plan, the State Planner will be responsible for the drafting

of this Plan. Mrs. Slights said that her understanding,

from Mr. Keifer, of how he would determine how he would draft

the Statewide Land Use Plan, was that "he would go under the

direction of the Commission and that the Commission would

settle the issue and not the State Planner". 'Representative

Seibel said that the legislature will have the final say on

what sort of Statewide Land Use Plan is implemented.

Mr. Cooperson felt that the Commission, on page 24, has

said tha t the people of Delaware are mature and reasonable

enough to adopt measures that will continue to protect the

Coastal Zone so that we will still have orderly growth and

development. Therefore, Mr. Cooperson recommended that Mr.

Weiner's motion be passed. Mrs. Slights felt that the Commis-

sion was doing an injustice to those who testified on this

issue. On previous testimony, if there was a great deal of

testimony against a particular issue, the Commission had voted

to amend the Report to comply with the wishes of the people.

The majority of the Commission did not agree with this summary.

MOTION: Mr. Weiner's motion to leave this section as written was

approved with Mrs. Slights and Mr. Walton voting no.

Mr. Conaway, in his letter to the Comm ission, expressed

concern that the Statewide Land Use Plan, recommended by the

Couunission, not turn into merely a zoning map. Mr. Weiner

said this was also one of his fears and asked for clarification

on this issue. Mr. Larson said that the reference to the Land

Use Plan in the Industrial section of this report is to local

land use plans. There were Iong discussions on this issue at

previous Commis-sion meetings as recorded in t he minutes, at

which 'time Mr. Weiner's concerns were addressed.

Mr. Cooperson pointed out that the third s-entence in.. the

-second paragraph on page 45 is misleading and incorrect. He

felt that the demand,for land development is primarily gqnerated
by theptivate :sector. Secretary Bryson suggested that that

sentence be amended.to read: "One of the questions being ralsec

now.,is that since the State government provides financing for

roads, s-chools,,z-ewage disposal and other.facilities, the demand

for which is largely regulated,bylocal government lan-d develOP7

ment decision, should the State'government take back some or all

of the land use regulatory responsibility it has historically

MOTION: delegated.", Mr. Cooperson made a motion that Secretary Bryson s

sugg,.esti-on 'to change the word."determined" to "regulated" be

;adopted. This motion was seconded by,Mr. O'Donnell and approved

by all present.

'COST OF PUBLIC SERVICES

Comments wer-e made on this section by the Civic League of

NeVtCastle -County, Mr.Drexler., the County Executive of New

Castle County, and Mr. Williams.. In general,these comments

e
were in agreement with the Commission's position. Several peopi

recommended that the Commis.sion go beyond what the Commission

had recommended in terms of more specific recommendations.in the

Report. Mr. Biondi asked if anyone on the Commission felt that

changes should be is section. It was moved by
any made to th

OTION: Mr. Krapf and seconded by Mr. Ryan that this section be accepted

as written. This motion was agreed.to by all present.

On the issue of whether or not the Commission should con-

tinue in its present form, Mr. Krapf stated that he did not

feel that the Commission should be an ongoing thing. Mr. Biondi

pointed out that the Governor requested, in his State of the

State Message, that when.he has legislation that he believes

satisfies the Commission's recommendations, that the Commission

hold public hearings on the legislation and react to the hear-

ings, as well as to the legislation itself. Mr. Weiner supported

Mr. Krapf's statement and also felt that his statement was not

in conflict with what Mr. Biondi pointed out and what the Gover-

nor has in mind. Secretary Schranck felt that there was a

danger of this report "dying" and he felt there ought to be

some ongoing group to oversee the implementation of the policies

suggested in this report.

On the subject of implementation recommendations, it was,

generally agreed that it was not necessary for any Committees

to meet, again. The implementation of these.policies will be

left to the Administration and the Legislature. It was agreed

that the CoTaaissionwill present the final report of the Com-

mission to t he Governor; will review and participate in the State-

wide Land Use Process; and then the Commission will disband.

The Governor will be putting together an Administration proposal

with respect to the Commission's report, and submitting it for

review to the people, the legislature, and the Commission. The

Commission will be called to meet again to plan how to revi ew

what has been proposed, with respect to the Statewide Land

Use*Plan, and details of the public hearings.

Mr. Krapf said that it had been a pleasure to serve on the

Com mission, and that,there had.been a great many compromises.

He felt that this is what good government is about. Mr. Krapf

further complimented Mr. Biondi for his leadership and hard

work on this Commission. (Applause).

MnBiondi pointed out that he had not met with the

General Assembly on the week of January 20, as previously

agreed to.

The final report, in the form agreed to at this meeting,

will be submitted to the Governor, the legislature, the public

(upon request) and the media.

It was further agreed that a dinner, would be arranged,

with the General Assembly and the Governor (dutch treat), at

which time-Mr. Biondi would speak about the Report.

Mr. Biondi pointed out that it will be necessary for-.
members of the'Commission to take an active role in sp eaking

to the public on the Commission's Report.

There being no further business, the meeting wag adjourned

at 11:00 p.m.:

Respectfully submitted,
C-3 %A a Q@

Dee Burkley
Recording Secretary

APPENDIX F

PUBLIC HEARING ON THE DRAFT REPORT OF THE DELAWARE TOMORROW COMMISSION

TUESDAY, JAN. 6, 1976

CENTRAL MIDDLE SCHOOL

DOVER, DELAWARE 19901

The proceedings of this hearing,went as-follows:

Good evening, I am Frank Biondi, Attorney at law with offices in the, City of

Wilmington. I'm Chairman of the Delaware Tomorrow Commission.
I would like to ident ify the-other gentlemen at the table with me- here:
Cliff Hearn,, who's also a member of the Bar who serves as Secretary to the

Commission; Dave Keifer, State Planner whose office has provided the service

and coordination for the -work of the Commission. Other members of the Com-

mission and, its Committees are seated here in the audience, and I'm very happy

to have them here with me. tonight. If I get into any trouble, I hop& they'll

stand up and be identified.

The Delaware Tomorrow Commission -was created in June of 1974, began its
work in, September of 1974, and was charged by the Governor with certain

specific responsibilities,. They were to determine what the state government's

historical experience has been. in regard to growth, to determine alternative

ways that state goverment can provide for eff ective growth, to evaluate the

potential impact of various growth alternatives in the private and public

sectors, and. to recommend to the state goverment policies and strategies for

effective and rational growth in the residential, commercial, and industrial

areas. The Commission was broken-up into three committees: a Land Use and

Community Development Committee, an Economic Development committee, and a Cost

of Public Services Committee. The Committees were staffed not only by members

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of the Cm.mi sion but by other citizens with eqxwtise. in the various areas.
The Committees met, studied problems, discussed then in depth and made

ions to the Commission. The Commission then held long delibera-

tions and decided on thp- preliminary report, which is before you at this time.

We are going to hold this hearing tonight; there will be another hearing in

New Castle tomorrow night and a further hearing in Georgetown the following

night. Following the completion of these hearings, the CamAssion will take
the minutes of the hearings and the material submitted, sit down and.deliberate
further with respect to the matters uhich are the subject of its report,-then

issue a final report to the Governor, the General Assembly, and to the people

of the State. The Commission is not so arrogant as to asm that it has

suggested all of the proper solutions to the problems it has discussed; in

facti the Commission is not so arrogant as to suggest thatit has even identi-

fied all the right problems. We do believe we have identified some of the

problems in the State which have to be addressed in a rational and planned

manner. The purpose of these hearings is not to hear further from the

Commission, but to. elicit a public response to the Commission's recommenda-

tions. I will, therefore, ask those members of the public wiio want to speak

to the Commission's report to come to the microphow, identify themselves,

give their name,. address, and organization of which they are a part/or

epresenting, if such is the case. WLw TAmts to be first? Bill Miller?

MR. MMUZR: My rv-i--a is William J. Miller. I an the President of the

Delaware Society of Professional Engineers, and speak to you tonight in

that capacity. My residence is Dover, Delaware.

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The Delaware Society of Professional Engineers Coastal Zone Committee

has reviewed the Delaware Tomorrow Commission Report as part of our

continued interest in Delaware's land use, management program. The Board

of Directors endorses the comments offered.

We commend the Commission for its, effOrts to establish a clear, set of

policies for development in,Delaware.

our comments are generally limited to the sections on Land Use and

Community Development and Land Use Planning and. Regulations which we feel

have, extreme Importance. These comments represent a continuing development

Of themes presented' in our March 1975 report to the Governor and General
Assembly.,

Land Use and Community Development

Community Development

We agree with the Commission that "sprawl" should be discouraged in all,

future development. The comission should clarify its concept of the desired

level of urban concentration. High density spread over too large anarea is
obviously undesirable. population centers shouldbe limited to a manageable

and efficient size. By designating population limits for develOPed areas,
good utility and transportation planning can be realized.,
Diversity Of housing types, not only high density, should be encouraged

in the population centers. Type of housing and lot size should depend on

the market. place, limited by the overall PLanned development density and,
priorities for other uses.

Redevelopment of existing older cities has been tried with varying

degrees of success. Successful redevelopment of the core city can be

accomplished only if coordinated with the surrounding community. Additional

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developmenton the fringes of Wilmin couradd
,gton should- be-dis _g so: tIA-s,-area

can rebuild wbat already exists and not be burdened with extensive new

facilities.

I We agree that decent housing is a necessity. Extensive progra have

been tried in the past several years often with limited success. The

subject is much too complex to discuss in detail at this time. We would

hope, though, that the programs developed would very carefully examinethe

previous successes and failures. Some limit on the number of public housing

.units to be developed In each population center mist be established.

We agree that Commercial development should be zoned in clusters and

coordinated with planned populati-on centers, and that strip higbway

commercial dwve@ t is undesirable. However, once areas are designated

for cormercial development, a developer should be able -to proceed through

the normal permit process without any additional need to justify a project.

The ecorxx-dc risk is his and not subject to review by a agency

We agree that sites most suitable for industrial development should be

designated Utility and transportation systems should then be planned to

te industrial siting. We call your attention to the fact that

studies have been made (Fantis Co.) to determine the most suitable types of

industry for Delaware. These studies =st be carefully considered in

developing industrial land use policies. We would like to empbasize your

re im that rehabilitation of existing industrial buildings and

sites seems a sensible approach, unless, however, the site is no longer

compatible with today's development plans.

We support the recommendation to establish tax incentives to encourage

renovation and rehabilitation of older properties.

We concur with the Commission's Utilities Finding, item #2, that "the

routing, signing and timing of new utility installations, especially

interceptor sewers, can be a valuable tool for, guiding land use" and

believe. they should be. We point out that the Public Funding Recommendation.

item #2, of not funding utility capacities beyond immediate needs is in

conflict; it will have a negative effecton the planning process.

We, concur that improved mass ion is directly tied to planned
population centers and planned comnercial and industrial sites. Mass trans-

por:ation routesi must be convenient for potential users and attratt..@and-:maintitn

these users.to, be economically feasible.
With planned development, utilities and: ion can be designed

for the maKimum anticipated use. The self-fulfilling situation then mwks

to our advantage - development is encouraged where planned.

The transportation policies which are developed should encompass all

vehicular activity. . The reference to "cars" and "automobiles" could easily

be expaided to satisfy this condition; in addition, it is assumed that the

transportation policies included,all forms of transportation even if they are

not expressly contained in the report. Air, water, and any other trans-

portation probability qualify for consideration.

Agriculture and Open Space

Maintenance of prime agricultural farm land is very ixqxwtant to assure

food Aupply-for present and anticipated population levels. The recommenda-
tion @O modify estate and. inheritance tax laws to assure orderly transfer of

agricultural land is irqperative if the planned development and agricultural

land policies are to be achieved.

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We support the Conservation and Open Space Policies and implementation

measurers listed on P. 24. However, we believe public acquisition of open

space should be limited to unique and important conservation areas and areas

for planned park and recreation space. We assume implementation policy #2

on P. 24 has this intent.

Participation in planning for the effects of off-shore drilling for oil

and a possible deepwater terminal should and is being considered in Delawarels

Coastal Zone Program. The Iewes-Rehoboth Area has been given first

priority in development of the land use program.

Land Use Planning, and ftulation.

DSPE is very pleased that the CamLission has supported our blarch 1975

Coastal Zone Study Report, and does, therefore, agree wholeheartedly.

This program is now well underway under the direction of the State

Planning Office, and -we strongly encourage the ccmplete support of all levels.

of VeXLLMMILIC and all

FolIg!tt
The Commission's report outline many tions and policies to

help maximize the quality of life In Delaware. A mechanism must be estab-

lished to implement these programs. DSPE would like to offer scme suggestions

to follow-up on the effort to date:

RECCM2MMON: The Governor should continue the Delaware Tomorrow Camdssion

and its sub-ccmittees, charging the Ccmmission to review and recommend on

specific programs to carry out the and policies in the report.

RECOMMENDATION: The Governor should assign development of specific programs

to the appropriate departments in the State Government.

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RFMMUATION: The Governor should assign overall coordination to the

office which can best handle the job for him; the Commission to serve-as

the "watdWce' and provide the strong advisory position recommended above.

PKER4REATION: The Land Use and Ccmnzdty Development Committee sh:)uld

maintain close with die- State Planning Office (a Commission

member) and the Coastal Zone L Committee. The development of

the managemimt program is well undemmy and can, serve as the'nucleus on which

to build.the other program.

A closing comment:

Policies eoommended by the Commission umt be carefully coordinated

with other programs of government to determine the priorities for spending.

Many of these -J--4 policies should receive very high priority for

implementation; none should be considered as a sivple add-on to the plethora

of existing program.

MR. MI=: Thank you very much Mr. Chairman, and I have copies of this

report if you would like to have them.

MR. BIONDI: Thank you Mr. Miller. Would you please give copies to Miss

BLwkley of the Planning Office, who is seated there in the.front, and who

will maintain the record of the hearings for US.

Who else-would like to speak at this time? Is there anyone else? Seems

like everyone to listen. Is there anybody in the audience wbo would

like to make a comment whatsoever an the Commission's report, the mmmer in

which it is proceeding or any recoamendation whatsoever, or to ask any
questions? You don't have to make a statement. If you want to ask any

questions that's fine too.

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MR. FETTERKAN:

Kurt Fetterman
Dover, Delaware

Is the end result to encourage industry into the State of Delaware? In

other words, in order for Delaware to overccme the anti-industry image it

has to be very pro industry or encouraging to industry. Will this CamLission

or report or whatever encourage industry into the area?
MR. BIONDI: I think that's difficult to answer. What the. Cammission. is

talking about is eliminatir? t1ose factors, fram a negative point of view,

which have been iuportant- deterrents to the location of uxhLstry in the

State w&ich should be eliminated, but consistent with a rational plan for

growth and consistent with t of our environmental needs and also
you heard Mr. Miller speak of one of*the.Ccmmission's reccimmendations; namely,
the preservation of prime farm land. Our Commission's Report is a balanced

report which looks forward to a balanced growth in the State in the future.

NR. FmEwm:

is there still entbwiasm about industry coming into the State?

MR. BIONDI: I don't know where it-is-I think the Commission has been

selective in its growth recamxndations, if that's what the portent of your

question is. If there are no other comments, yes sir.

NO NAHE:

Miere can we gL-t a copy of these reports?

MR. BIONDI: Okay, the reports may be obtained fram. the Office of the

Delaware State Planner. I would indicate to you that the.preliminary report

is a 53-page document which is labeled: "Draft Report of the Delaware
Tomorrow Ccamission." If arrj of you have riot received the report yet, or

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have received it, but are not prepared to. comment on it, you may address

are State Planning Office. They
comments concerning the report to the Delaw;

will be distributed to members of the Commission. It is our plan to distribute

comments made at these meetings to the members of the C=mdssion together with

written statements made to the members of the Commission, and hold further

deliberation. Now, as I said, the. draft report is a 53-page report. There is

an appendix to the report 4-dch is not paged through, but as you see is four

inches, actually it's not that difficult to read. The appendix to the report

contains the executive orders creating the Commission, studies made on behalf

of the Commissim, the full report of the F=namic Development Commdttee and

also contains minutes of the Commission meetings. We were very careful to

transcribe the minutes of the meetings.and to make a full.record of the views

and opinions of the members of the Commission and that is. available also from

the Office of the Delaware State Planner to anyone who desires to.receive it.

MR. FE77EMW:

Maybe I misunderstand. I thought this was supposed to be related to

the Coastal Zone Act.

MR. BIONDL I'm afraid you do misunderstand. The Coastal Zone Act, and the

implications of. the Coastal Zone Act, is only one small part of the problem

of ccmnercial-industrial-residential growth in the State. The Ummission has

examined the patterns which have existed in the State over the last 20 years

in.the area of land usage/community development. In my own view, the recom-

of the Commission in that area are of longer range and deeper

s in the. long run developuent of the State than is the one issue

concerning the coastal zone. The Commission also looked at the overall

problen of wmmmic development, and the Cammission has focused heavily on
the problem of the cost of public servies in the State and the implication,

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both fromthe point of view of econanLc development and future growffi and

the quality of life of our individual citizens of the continue@d growth and

the cost of services both at the state, county, local and school district

levels in the State. We are not focusing on any one .iss ue. That issue may
be the sexiest in the report but, in my own judgment, it is not. tlL-- most

significant in the report. Now these are available, and I u&ght also say they

are availablewithout charge in case anybody is worried about that. Is there

anybody else in the audience who desires to ask any questions.or speak to the

report?

MR. COOK:

H. Wallace Cook
Newa:rk, Delaware

One thing that surprised me was the statenmt in yourdraft. report, on

page 31, that in 1945 Delaware had no indebtedness and now we have over
$500 million. I fail to see any recommendation for solving that problem.

Are you going to make any recommendation?

MR. BIONDI:

I think that the Finance and I mist, in answering these questions,

speak for the Commission as the Commission view the problem rather than

as I would view the problem personally. The Comnission, has looked for the

first time at the cost of public services sector that I can find of record

in the State at d1w overall cost in the State government to the people of

the State. They have looked at the budgets of the three counties of the State,

they have looked at the budgets of the major cities in the State, and the 26,

school districts and have also looked at the contributions made to the public

institutions in the State of higher learning such as the University. The

Commission has looked at all the expenditures by these various units and the

Commission has looked at all the sources of revenue of these various units.

The conclusion the Comission has reached as the result of this analysis of

the cost ofpublic services in the State is that the cost of public services,

both from the point -of view of operating expenses and from the point of view

of debt :service and overall capital expenditurs, have reached the point where

they seriously threaten the economic well-being of the State and the quality

of life of the citizens of our, State. Now we have looked at it from the point

of view where it is necessary not only to talk about reducing

and controlling capital expenditures and :operating expenditures at these -levels,

but -it is also necessary to primarly take a look at the existing governmental

structure in the St ate - both State Government, counties, sch ool districts,,
etc-, and to call into question the very .structure which provides

the services. Are over-governed in this State., For a State of 560,000

people,do we need all the various levels of government as currently exist?

In -discussing this report before another,group I was asked a specific question

by a member of the General Assembly, andl -told that member he may have missed
the entire point of the report because the first question which he was being
,asked was the validity of his own existence - of his own office. I think that's

the core:of -the Comission recommendation. We have not used specific numbers

in the report because it is extremely,difficult to project governmental revenues

and -expenditures over a long period of time,and probably we could not get

agreement on the Commission with respect to any single revenue source if we were

to go and try to name a number. We know, however, that ten years down the road

the cost of public ,services-in the State, at all levels, when added together are

going to be substantially greater than they are at the present time-
absent, new sources of revenue, and the Commission doesn't recommend neW sources

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of revenue as a way@ to go What we recommend is that we take a look

at the entire goverrmiental service structure in the State and decide whether
or not we really need it as it exists at the present tin-e. But absent that
and absent the fulfillment of other policy recommendatlons that the Com-

mission has in the land use and community development area and

the economic development area, the public deficit by the year 1985 will nmke

the current problem in the State look very miniscule. It is inherent in

the Cbmmission's recoamendation that a more stringent approach with respect

to capital expenditures not only for State goverrmient but for counties, cities,

and school districts, all levels of govenment, be adopted. Are there any