Saturday, January 18, 2014

Spin versus reality in today's Delaware

When CNBC offered each governor the chance to comment on how attractive his or her state was for new investment, you can be certain that Governor Jack Markell was no different from the others in that he intended to put the state's best foot forward.

But I'll also bet they didn't show him the ratings before he wrote his comments.

Let's take a look at spin versus reality in today's Delaware:

Spin:
In Delaware, we listen to the priorities of our business people.
Reality:
CNBC rates Delaware #1 of 50 in "Business friendliness" 
Ok, not bad, Governor.  Now let's take a look at the details (where the devil usually resides):

Spin:
As part of our efforts to ensure entrepreneurs have access to the resources they need, we helped launch "Start It Up Delaware," a public-private partnership that brings together our financial, accounting, legal and real estate communities to assist new companies. 
Reality:
CNBC rates Delaware #14 of 50 in "Access to capital" 
 Still in the ballpark.

Spin:
Meanwhile, we are modifying or eliminating more than 140 state regulations to make it easier to do business and to improve government efficiency. In departments large and small we looked for and found ways to reduce paperwork, streamline permit applications and eliminate unnecessary rules, without sacrificing public safety. As a result of these changes, entrepreneurs and established companies can spend time building their businesses and hiring instead of filling out forms and waiting in line.
Reality:
CNBC rates Delaware #24 of 50 in "Cost of doing business" 
That's starting to sink, isn't it?

Spin:
Last month, experts from the Federal Reserve Bank of Philadelphia confirmed that Delaware's economy is "well-positioned" for "decades of growth ahead." They credited our state as a "first mover" in identifying opportunities for growth and praised our portfolio of generally high-wage industries. 
 Reality:
CNBC rates Delaware #27 of 50 in "Economy" 
Ouch.  That's below average.

Spin:
We understand that entrepreneurs want to locate in areas with great schools that produce a skilled workforce. 
Reality:
CNBC rates Delaware #30 of 50 in "Workforce" 
Oh.

Spin:
Delaware offers a high quality of life, with beautiful beaches, parks, scenic farmland, a vibrant arts community and a rich cultural and historical heritage. 
Reality:
CNBC rates Delaware #34 of 50 in "Quality of Life" 
But that's only 16th from the bottom, right?

Spin:
We're increasing enrollment in high-quality early education, raising standards in our public schools as a leader in implementing the Common Core curriculum and working with the business community on STEM programs that are relevant to the job market. 
Reality:

CNBC rates Delaware #34 of 50 in "Education"
Let's see, we spent $119 of Race to the Top money and we raced to number 34?

By the way, back in 2008, before Race to the Top, CNBC rated Delaware as #26 of 50 in Education.  Apparently it's a real muddy slope going up that hill and you slide back a lot.

Spin:
Recent legislation places tighter controls on workers' compensation medical costs and ensures that insurance carriers' requests for rate increases receive a high level of scrutiny to tackle recent increases in premiums. We have also reformed ourunemployment insurance system to reduce the burden on employers and have focused on lowering gross-receipt taxes.  
Reality:
CNBC rates Delaware #37 of 50 in "Cost of living"
Yeah, I realize the Spin and the Reality don't match up well here.  That's because the Governor apparently didn't even try to spin our cost of living.  Instead he talked about lowering business taxes.

Spin:
Recognizing our increasing reliance on the Internet to communicate and do business, we also prioritize maintaining the country's best broadband infrastructure.Delaware has the fastest connection speeds in the country, nearly 9 percent faster than our closest competitor last year.

Reality:
CNBC rates Delaware #39 of 50 in "Infrastructure"
I guess the Governor doesn't think that, you know, roads or bridges or anything like that counts as infrastructure.

Spin:
As concerns about jobs leaving the country intensify, Delaware companies in advanced industries are bringing jobs back from abroad. ILC Dover, known for making spacesuits for NASA and personal protection equipment for military, Homeland Security and industrial users, moved manufacturing operations—and the accompanying 115 jobs—from Mexico to Seaford. And Hologic, a leading manufacturer and supplier of diagnostic, surgical and medical imaging equipment, has decided to move jobs here from Germany. 
Reality:
CNBC rates Delaware #39 of 50 in "Technology"
Well the spin sounded all technological-like, didn't it?

Spin:
In Delaware, we listen to the priorities of our business people. By working with them on all fronts, from driving down costs to improving our education system, we make the First State a great place to start a new company or expand a growing one. 
Reality:
CNBC rates Delaware #31 of 50 overall in attractiveness to business
Actually, I think that's pretty nice of them, considering the sub-rankings.

And just for fun I thought I'd throw in one last spin vs reality comparison, because we need another top twenty finish so we don't get all pessimistic:

Spin:
Supported by Democrats and Republicans, the regulatory reform process demonstrates our ability to bring together the right people and engage the public to make good decisions. Our close-knit community consistently allows business leaders to work together with government representatives at the federal, state and local level to resolve challenges. 
Reality:
Business Insider rates Delaware #12 of 50 in corruption
Democrats, Republicans, and liquor distributors--all working together in a close-knit community.

Despite these rankings, CNBC gives Delaware a "most improved award"--but it is really worth reading the whole thing:

Delaware improves to 31st place from 43rd last year. The First State has a well-earned reputation as a welcoming place for business thanks to its Court of Chancery, which insulates businesses from the whims of juries. Roughly half of all publicly traded companies are incorporated in Delaware, according to the state's Division of Corporations. 
But Delaware typically does poorly overall in America's Top States for Business because merely incorporating in the state is apparently more attractive than actually locating there. 
While the state has made improvements in its traditionally high Cost of Doing Business, it still finishes in the middle of the pack at 24th in the category. And it falls to 27th from 19th in the Economy category. 
Delaware owes its overall improvement to its perennial strong suit: Business Friendliness. The state returns to first place in the category this year, after an uncharacteristic 19th-place finish last year. Delaware had been under fire for what businesses saw as an overly aggressive unclaimed-property law that raised hundreds of millions of dollars in what the Council on State Taxation called a "stealth tax" on businesses.
So basically Governor Markell has us moving up in the world because we are so strong in the corruption business friendliness area, despite the fact that every substantive ranking in the poll places the First State well below national averages.

You know, if we ever actually acknowledged problems, then we could work on them. 


h/t to kilroy

2 comments:

tom said...

Last year's Freedom in the 50 States study by the Mercatus Center at George Mason University placed us at #17, largely due to some of the business friendly items mentioned above.

I expect this ranking to drop substantially in both of the 2014 & 2015 editions of this study as the data they use lags by about 2 years.

tom said...

sorry, that URL should have been http://freedominthe50states.org/overall/delaware