Accountable USA - Delaware

Delaware has just a few active programs, and because all economic development tax credit programs in the state are as-of-right (available to any company meeting broad requirements), tax code provisions dominate the state’s economic development spending.

Delaware’s largest subsidy is the Strategic Fund, which received an appropriation of $32 million for new grants and loans in FY 2014.  This fund was a large part of the package used to land a Fisker Automotive plant in 2009 (see below).

The other major program in the state, New Jobs Creation (formerly Blue Collar Jobs Act) , aims to promote job creation, brownfield redevelopment, recycling, waste reduction, retail development, and business expansion in “underdeveloped” areas. Nearly any business may participate.  AstraZeneca is a major tax credit recipient in Delaware (see below).  The general structure of  New Jobs Creation tax credits has been applied to other business tax credits, such as the Bank Franchise Tax Credit program aimed at banking institutions.

Delaware’s confidentiality practices regarding specific subsidy deals are so strict that even state agencies must use a FOIA request to obtain company-specific information from one another.  The state does not publicly disclose the names of economic development recipients for any of its programs, giving the state dismal scores for online transparency.

Key Subsidy Programs

Subsidy Program Recent Annual
Cost
Online Recipient
Disclosure
Recipient Disclosure
Score
Job-Creation/
Job-Quality Score**
Monitoring/
Enforcement Score***

Bank Franchise Tax Credits

state income tax credit for hiring new bank employees and meeting investment requirements

$2.5 million (FY2013)
0/100
55/100
50/100

Blue Collar Training Grant Program

workforce training grant for firms which meet requirements relating to wage rates and the hiring of state residents

not available
0/100
33/100
44/100

Delaware Strategic Fund

"deal closing" fund providing grants and convertible loans (which become grants if certain conditions are met) for major relocation and expansion projects

$30 million (2011)
0/100
60/100
60/100

New Jobs Creation

corporate income tax and other credits available to firms meeting job and investment requirements (formerly Blue Collar Jobs Act)

$7.6 million (FY2011)
0/100
35/100
53/100

New Jobs Infrastructure Fund

discretionary grants and loans for infrastructure improvements

$40 million (FY2012)
0/100
not included
not included

* The score is derived from the Good Jobs First report Show Us the Subsidized Jobs (January 2014).

** The score is derived from the Good Jobs First report Money for Something (December 2011).

*** The score is derived from the Good Jobs First report Money-Back Guarantees for Taxpayers (January 2012).

Major Subsidy Deals

Fisker electric car assembly plant (2009)

After General Motors closed its Wilmington assembly plant, Delaware thought that its automobile industry was finished. But only four months later, an upstart company called Fisker Automotive announced that it would take over the facility to produce plug-in hybrid sedans. The state offered the company a total of $21.5 million in subsidies from its Strategic Fund: a $9 million grant to cover utility costs and a $12.5 million loan to help pay for plant improvements. The loan is convertible to a grant; i.e. if the company invests the expected $175 million and creates 2,500 jobs within five years, it will be forgiven. In addition, New Castle County agreed to abate property taxes for five years. Fisker has also received a $528 million loan from the U.S. Department of Energy. United Auto Workers Local 435, which represented workers at the old GM operation, expects to sign a collective bargaining agreement with Fisker, whose management has expressed a willingness to cooperate with the union. The sale of the plant to Fisker closed in July 2010. Fisker later revealed that it would build its first line of hybrids in Finland. (Key sources)

AstraZeneca (1999)

After pharmaceutical giants Astra and Zeneca reached a merger agreement in 1998, Pennsylvania and Delaware entered a bidding war for the U.S. headquarters of the combined company. In April 1999 AstraZeneca announced that it had chosen Delaware, which offered the company a subsidy package of land and cash worth $18.7 million plus tax credits whose potential value was not stated but were later reported to be about $30 million. Also made available were some $70 million in road improvements around the facility. Local officials agreed to zoning waivers. In 2010 the company announced the elimination of some 550 research jobs in Delaware. (Key sources)

Walmart in Delaware

  • At least 1 Wal-Mart location has received subsidies worth about $4.1 million in Delaware.
  • We found no instances of property tax assessment challenges by Wal-Mart in Delaware, but given the absence of centralized data, it is still possible that appeals have occurred.
  • Many Wal-Mart workers are ineligible for health coverage from their employer or choose not to purchase what is available, because it is too expensive or too limited in scope. These workers often turn to taxpayer-funded health programs such as Medicaid. Delaware is among those states that have not disclosed data on the employers with the most workers or their dependents enrolled in such programs.

For more information, see the Delaware page of Wal-Mart Subsidy Watch.