HSBC Layoff Announcement Highlights Delaware's Failing Business Climate

Today's announcement by HSBC to shed 500 jobs at its New Castle, Del. site highlights Delaware's failing business climate.  What drove HSBC to discontinue credit card and collections at this site, may only be a partial truth.  What was not report in the News Journal article, was whether HSBC is shifting those functions to another state or country.

Since HSBC did not outright state it was divesting the entire credit card operation, the likeliness of shifting these jobs to another state or country are pretty high.  And that is a bad story for Delaware and for New Castle County. The next follow-up to this story should be why did New Castle County and Delaware governments fail HSBC to make such as decision. 

The questions that need to be answered are:

• What did Delaware or New Castle County not do, that others states or countries do to prevent another recurrence?
• What did the Delaware Department of Economic Development not do to retain those jobs?
• What factors did HSBC utilize to evaluate why to shed those jobs?

Governor Jack Markell, New Castle County Executive Paul Clark and Delaware Economic Development head Alan Levin have a daunting task ahead in trying to understand what happened here.  Not only do they need to be held accountable for this action by a private employer in our governments inability to have a favorable business climate, but they need to put in stop-gaps to prevent another firm from doing the same thing.

Delaware may have the top bill in legal ranking nationwide that supports our business community, but this alone is not enough.  Delaware needs businesses and jobs for every Delawarean that wants a job.  The Tax Foundation's 2010 state rankings on business friendliness  may have Delaware ranked 8th nationally but state and county budget shortfalls will lead to higher taxes in 2011 and beyond.  Delaware's education ranking by the American Legislative Education Council as 19th best in the nation is a call for dire improvement to create an educated workforce.

Another facet to Delaware's ailing business climate could be that marketing (or lack thereof) of what Delaware has to offer businesses.  A September 2010 report by Development Counsellors International, and independent firm that analyzes business friendliness for governments submitted a report to Delaware's Department of Economic Development.  The report highlights Delaware's weaknesses and challenges.  Some highlights includes Delaware's weaknesses on infrastructure, small labor pool, high cost to establish business and lack of incentive to conduct business in Delaware.  The challenges include addressing the same weaknesses, as well as overcoming more competitive incentives from other states and having more business zones with established commercial sites.

Delaware and New County Government leaders facing a daunting task, and we can only hope they have the knowledge and fortitude to get us out of this conundrum.  Delaware's workforce is reeling from bad political decisions and state and county coffers are suffering as a result.  Until Delaware focuses on jobs and job retention, this picture will not improve.  Delaware and New Castle County needs leadership and leadership now.

Delaware Liberals Cause Budget Shortfalls at DelDOT and NCCo Government

Tax and spend liberals have lived up to that moniker through Delaware.  Today, reports about budget shortfalls at DelDOT and the New Castle County were made public. 

Blue Hen Conservative broke the story on the fiscal wrecklessness of New Castle County back in October 2010, during the heated U.S. Senate campaign.  While mainstream media (News Journal) ignored this blog post and warnings of Republican U.S. candidate Christine O'Donnell, New Castle County taxpayers may have to pick up the slack. 

DelDOT fiscal mess is the fault of its leadership, and the failure to bring about cost reform to the agency.  Delaware drivers will most likely pay the price at the pump and through higher tolls to close this budget gap.

When will Delaware voters realize that elections matter?  It does not have to be this way.

New Poll Shows Mike Protack is Republican Favorite for County Council President

Founders Values is a well known Delaware educational group that focuses on the founding principles of our nation. They strive to educate the electorate and children on those founding principles and on the Constitution and related documents. They have been active for about 18 months and they have organized many events including a number of TEA Parties across the state. Their members have been an active force in the recent political landscape in Delaware and have even impacted legislation in the state and nationally.

In June of 2010, Founders Values administered a survey of likely Republican voters in the U.S. Senate primary between longtime Congressman Mike Castle and Conservative activist Christine O'Donnell. The poll found O'Donnell leading Castle by nearly a 3-1 margin. It was the first (and almost only) poll that found O'Donnell in the lead among likely voters until her upset victory on Sept. 14th. While laughed at initially by local media personalities, the poll proved to foreshadow the results of the Republican Primary.

The group obtained the names of the two front runners for the Republican nomination in the Special Election for New Castle County President. Delta airlines pilot Mike Protack, who ran for Governor in 2008 and former State Representative Tom Kovach are the names who have been mentioned as the leaders for the spot. Protack ran unsuccessfully in a Republican Primary in 2006 against eventual nominee Jan Ting who faced Tom Carper(Christine O'Donnell was also a write in candidate in that Primary Election). He then ran in the GOP Primary for Gov. in 2008 but left the race to run as the Independent candidate. Protack ran in 2010 for the 3rd County Council seat but faced a primary opponent in Janet Kilpatrick who was seen as Mike Castle's personal nominee to oppose Protack who was backed by the TEA Parties. Kovach ran in the 2008 special for the 6th district Representative seat in Brandywine Hundred. He narrowly defeated the Democrat (by just over 100 votes) in the race but lost this year to Debra Heffernan.

The telephone poll conducted on 11/12 & 11/13 and was a survey of more than 300 likely Republican voters in the New Castle County Council President special election. 60% of the respondents chose Protack where just 40% chose Kovach as their desired nominee. See the Founders Values Press Release for more information.

Founders Values Executive Director Jon Sherman said "We believe that these poll numbers represent the mood of the Republican electorate and we hope that the leaders of both parties will understand that this is an important process that should be left to the people to decide."

Mike Protack has been tied to the Patriot movement in recent years. He was an early supporter and helped to organize the Wilmington TEA Party events in 2009 and 2010 and earned the endorsement of the conservative group Common Sense Communities Society in the Republican Primary. He has a very good name recognition and being a card carrying union member helps him with with a voting bloc that does not often fair well for Republicans. He has been plagued by the notion that he is a perennial candidate for one office or another but even that stigma appears not to hurt him among members of his party when compared to Mr. Kovach.

Tom Kovach is a contrast to Protack as he is the hand picked candidate by Mike Castle. Castle is the long term Congressman who was ousted by Christine O'Donnell and the TEA Party groups in Delaware. Castle and Kovach all but endorsed Chris Coons and publicly were quite critical of O'Donnell and her "TEA Party supporters" despite the fact that those supporters contained a majority of the Republican Party voters. Kovach is rumored to be a supporter of the policies of Chris Coons including the Stoltz development of the Barley Mill Plaza location that citizens group CRG has been a staunch opponent to. This could pose problems for Kovach when it comes to raising money and garnering votes from the Greenville and Elsemere areas affected by the development. Many Republicans believe that Congressman Castle has waged his own personal war against the majority of party voters who ousted him in September and considers those who supported O'Donnell his enemies. He has built a coalition of current and former legislators and party officials and some see Mr. Kovach, a staunch supporter of Castle, as yet another example of Castle's personal war with the electorate.

Only time will tell who the Republicans support. What's a near certainty is that the Democrats will choose AFL-CIO Vice President Tim Sheldon. He will be backed by Paul Clark and Clark's wife Pam Scott who is an attorney with Stoltz in the Barley Mill case. Though Sheldon, the Democrat would be the party's first choice, it's not inconceivable that they could work out a deal with Castle to bring in the more moderate Kovach as Council President. If Protack or a more conservative candidate were to get the nod, it's likely that they would face off in a heated blitz with Sheldon. The date of the election has not yet been set but the Democrats are due to announce their choice this coming Friday.

Who is Chris Coons? - Fiscal Conservatism

So, now that Christine O'Donnell has defied all odds and beaten incumbent Congressman Mike Castle to grab the Republican nomination for U.S. Senate, the nation focuses on County Executive Chris Coons. Mr. Coons has spent the last few months flying inconspicuously under the radar. In fact, his name recognition outside of New Castle County is nearly zilch while Christine's is now in national headlines. That's all going to change now. Mr. Coons will have his record examined thoroughly and from initial conversations with members of all political parties, that spells problems for the current New Castle County Executive.

Chris has had his commercials running over the last 2-3 weeks and I have begun a cursory look into Mr. Coons' claims.

1.) He claims to have taken the reigns of county council steeped in corruption and debt. Interestingly, in 2005 Chris Coons said the County's finances were "fundamentally sound"

"While the county's economic health is ‘fundamentally sound,' Coons said, there's been a widening gap between expenses and revenues in the past several years. His proposals would help avoid a projected $152 million shortfall by 2009." (Angie Basiouny, "NCCo Exec Proposes Reining In Spending," The [Wilmington, DE] News Journal, 3/30/05)

It turns out that in 2009, The News Journal reported that Coons said "‘We're 18 Months From Being Out Of Money -- Unable To Operate, Not To Use The "B" Word,'"

"‘We're 18 Months From Being Out Of Money -- Unable To Operate, Not To Use The "B" Word,' Coons Said, In A Reference To Bankruptcy. ‘That's where we are, and it's at a time when many families are struggling, and they're looking to government to help them.'" (Jeff Montgomery, "Sobering Challenges Reflected In Speeches," The [Wilmington, DE] News Journal, 1/22/09)

Now this seems to me to be a bit of a quandary for Mr. Coons. His commercial says that he balanced the budget as County Executive, yet the County went from "fundamentally sound" to "unable to operate".

A deeper inspection reveals even more problems with his commercial. He uses the AAA bond rating of the County as proof of his fiscal conservatism but what he doesn't tell you is that he raised taxes 3 times since he took the reigns in 2005.

In 2006 Chris proposed a 5% increase in property taxes that his Democrat controlled County Council passed instead of cutting spending.

Just a year later in 2007, Coons again had to initiate a tax increase. This time the bill was blown up by 17.5%. Again, he chose to raise taxes instead of working to reduce the cost of county government.

In 2009, amidst the height of "the worst recession since the Great Depression" Chris Coons brought yet ANOTHER tax increase to his Democratically controlled County Council. The result was a 25% increase in property taxes and not a DIME cut from the budget.

In fact, the bond rating company (Fitch Ratings) that has given the County the AAA bond rating said they only did so because Coons increased takes by 25% in 2009 which made the County more stable. Between 2004 and 2009 (when Coons has been in charge) the County lost more than 30% of it's reserves. Despite his claims to have balanced the budget, New Castle County carries a debt burden of $1,639 per man, woman and child in the county.

Still think Coons is a fiscal conservative? The County's spending has increased 10% since he took over and the county budget has grown by a DRAMATIC 33%! Prior to becoming County Executive, Chris voted for every operating budget submitted by his predecessor whom he now claims to have save the county from. In 2008, as cash balances fell, Fitch Ratings put a watch on the county. That watch was a warning that downgraded the status of the county finances from "stable" to "negative". Coons' answer? Not cutting spending on rapidly accelerating union worker costs, not working to slash and cut budget line items that the county couldn't afford. No, his answer was to raise taxes by 25%.

This is NOT the resume of a fiscal conservative.