Governor Markell’s Fourth State of the State Focuses on Jobs, Education and Governing Responsibly

“This is Delaware’s time to lead. Creating more and better jobs. Improving our quality of life. Providing the best schools and learning opportunities for our children. Getting the most out of each tax dollar. Strengthening the trust of our people in their government. These are challenges even in ordinary times. We don’t live in ordinary times.”

As Thomas Friedman and Michael Mandelbaum recently wrote, companies and countries both gain the greatest amount of ground on their competitors “in the turns” which are periods of greatest change and uncertainty. After years spent battling challenges such as inheriting a historic budget shortfall and the effects of a national recession that hit the state particularly hard, Delaware has the chance now to leap ahead and lead forward. The state, Markell said, must seize this chance to “win in the turns.”

“When there are big shifts in the marketplace, when others are overwhelmed and in disarray, they put distance between themselves and their competitors. As tempting as it might seem to take this moment to pause and catch our breath, this is not the time to stand still. This is the time for Delaware to leap ahead, to lead.”

The division and derision that has marked debate in Washington, DC and other governing bodies has been largely absent in Delaware, where citizens and their legislators have pulled together across the state and across partisan lines to keep the state moving forward. The Governor thanked the legislature for their work to set the state up for success.

“At a moment when Washington, D.C. stands for deadlock and dysfunction, Delaware’s strength resides in the capacity of its people, even in challenging times, to work with common purpose, to choose perseverance in place of pettiness and partisanship.”

Job Creation: Capitalizing on our Economic Strength
Expanded Focus on Small Business and Entrepreneurs

Jobs and economic growth have been, and remain, the administration’s top priority.

“We must put ourselves in the shoes of those who create jobs. We’ve got to understand the industries in our State better than any other state. And we’ve got to be more committed to the success of businesses in our state than any other state.”

“Winning the turns” means continuing to make progress with the state’s ongoing efforts at job creation, including fully funding the Strategic Fund, which has helped attract and retain jobs at significant employers like PBF Energy, Sallie Mae, Baltimore Air Coil, Fisker Automotive, Miller Metal, Bloom Energy, Mountaire Farms and Capital One; investing in infrastructure, including the use of the Delaware Infrastructure Fund to attract businesses expansion efforts like Amazon.com; and continuing to modernize the Port of Wilmington to increase our capacity to handle global trade.

It means demonstrating that economic development and environmental protection are compatible goals through existing efforts that have modernized our energy fleet while reducing air pollution by 8,600 tons per year of nitrogen oxide and 33,000 tons per year of sulfur dioxide (equivalent of taking 450,000 cars off the road); and connecting people with the First State’s history and natural beauty including the launch of the First State Trails and Pathways Plan, a $13 million effort to build miles of new and enhanced trails throughout the state for every Delawarean to enjoy.

Seizing Delaware’s time to lead also means adopting new efforts to get people back to work now and in the future by focusing on small businesses. This includes further supporting emerging start-ups and growing companies by applying best practices found at entrepreneurial support centers across the country and helping existing small businesses get access to credit through the federal Small Business Credit Initiative. The state is pursuing innovative ways to give small businesses the edge, including the first statewide partnership with Facebook to help Delaware companies fully engage the powerful potential of social media.

“We already have terrific small businesses but we aspire to see more created and to see them grow quickly. To accomplish that, we must nurture the small businesses and new companies that will thrive in the hospitable soil for job creation that our leading employers and our world-class workforce create around them.”

For their work, the Governor also recognized two members of the Delaware National Guard in the audience, Sergeant Bruce Sevens of Dover and Senior Airman Jason Duricek of Wilmington, both of whom served in Afghanistan.

“The first thanks we owe all of our veterans when they come home is the chance to partake in the abundance of opportunity that they make possible for the rest of us. Their mission puts them in harm’s way, but their morale is high and their skills are exceptional. Let’s work together to ensure they have the opportunity to put those skills to work when they come home.”

Delaware recently added representation of veteran-owned businesses to our Supplier Diversity Council, to ensure that they have a fair opportunity to compete for state business. To encourage the private sector to hire returning veterans, the Governor proposed expanding tax credits to Delaware businesses that hire veterans.

Schools: Creating the Workforce of Tomorrow
Expanded Emphasis on Early Childhood Education

Just as a businesses’ greatest asset in growth is its people, the state’s greatest asset for economic growth can be its workforce. Keeping the state’s commitment to the strongest possible public schools provides significant economic benefits now and in the future.

“The biggest driver for a business when deciding where to locate and expand is the quality of the workforce. That talent will determine whether the business becomes an innovation leader or gets left behind in the creative dust of its competitors. This is why, when the history of our time here is written, the determined push we are making to raise student achievement will prove to be the biggest game-changer of all.”

The state has made significant commitments to making schools stronger, including a reform plan that won national recognition through the first Race to the Top Competition. Working together, parents, teachers, administrators, private employers, foundations and public officials have established high standards to ensure an honest understanding of what is necessary for success in the global economy; improved the assessment system so parents and teachers can track student progress and identify student needs quickly; supported teachers with resources to help them student achievement; and made progress on evaluations for teachers based in part on the progress students make.

Over the past year, Delaware has also launched a World Language Expansion Initiative, increasing opportunities to study the languages needed for global competitiveness and making completion of a world language a graduation requirement. The Governor further proposed to create partial immersion programs in twenty schools over the next five years.

“In today’s global knowledge economy, those who are not pushing forward are falling behind. For Delaware to maintain its position of leadership, it is absolutely vital that we keep pressing ahead. Around the world, young people are working hard in schools that are dramatically improving and if we stop our own efforts now, it will be to the detriment of our kids and their future.”

To press forward, the Governor emphasized the importance of implementing without additional delay the state’s Performance Appraisal System, which has been crafted with the advice of hundreds of Delaware teachers. As a parent, he highlighted the need to ensure that these efforts help children develop a love for learning that inspires their imaginations and creativity, and committed to working with the Delaware State Teachers Association and the state’s business community on a new effort to raise awareness of the truly great things that are happening in Delaware classrooms.

“Finally, pressing ahead means acknowledging what research has clearly established — raising student achievement begins before children enter kindergarten. I’ve heard this message from hundreds of teachers — children receiving quality early care and education are more likely to be successful in school and in life. Investments that promise high yields get my attention and, in the realm of public policy, there is no higher yield investment than this one.”

Delaware announced historic investments in early childhood education during the spring of 2011, and the state was recognized for these plans with significant federal funding through the Race to the Top Early Learning Challenge in December. The plan, which Delawareans are working together to implement, includes (1) the professionals who care for Delaware’s children will have the proper training; (2) the early childcare facilities will have the best teaching and learning tools; and (3) the successes and challenges of centers will be closely monitored to ensure continual improvement.

The Governor indicated that the state aims to raise the percentage of high-need children in quality-rated programs from 20 percent to nearly 80 percent over the next four years and committed to introducing a new kindergarten assessment through collaboration with the Delaware State Teachers Association and many kindergarten teachers.

Governing Responsibly: Transparency and Cost Containment
Expanded Focus on Driving Down Health Care Costs

To succeed, Delaware needs to invest in business-supporting infrastructure, quality of life, our children, and our workforce. Governor Markell emphasized that responsible governance is critical to ensuring the effectiveness of these investments.

“This requires a state government that is innovative, efficient and transparent. Governments that are open and transparent are more likely to manage taxpayer resources responsibly.”

Government transparency took several steps forward in 2011, with streamlined procedures for responding to requests for public records from the executive branch. The Governor called on counties, towns and school districts to join this commitment to ensuring citizens have access to information, and he commended the General Assembly for their significant progress over the past three years.

To build on this progress towards greater transparency, Governor Markell announced that the administration would work with President Pro Tempore DeLuca and Speaker Gilligan, and Majority Leaders Blevins and Schwartzkopf to implement a new online reporting tool where citizens can see which lobbyists are advocating for clients on specific pieces of legislation.

“We have been successful in pulling together in tough times in no small part because of faith in the responsiveness of Delaware government. The trust of people in their state government should not be undermined by a perception that lobbyists have hidden access here in Dover.”

The Governor has worked with state agencies and Legislators to make government more efficient through initiatives like the “I Found it Cheaper” website for state procurement, eliminate more than a thousand executive branch positions, slashed the state vehicle fleet, renegotiated leased space, and stopped unnecessary printing. In 2011, leaders from both parties and representatives of employees worked together—in contrast to the pitched battles in other states—to confront the unsustainable long-term costs of state employee pension and health plans, saving more than $480 million over the next 15 years.

Further efforts to increase efficiency are needed, including reforms to the criminal justice system. Through the Justice Reinvestment Initiative, state officials are continuing to review opportunities to improve investments to achieve greater impact.

Governor Markell also highlighted health care as the cost driver that “looms above all others and will swamp all the savings we achieve elsewhere if not addressed.” State Medicaid spending increased by $56 million for the Fiscal 2012 budget, and the proposed increase for 2013 will be $21.7 million.

“The incentives we have in place in our health care system reward neither efficiency nor quality. These incentives encourage more services and tests, not better results. We have a system that doesn’t encourage healthy behavior in patients and doesn’t discourage unhealthy behavior. In essence, we don’t have a health care system; we have a sick care system.”

Because the Medicaid population combined with State employees and retirees represents nearly 40 percent of the health insurance market in Delaware, the Governor committed to work with the Delaware Medical Society, the Delaware Healthcare Association, and the community to insist on incentives for providers that are aligned to improve quality and discourage waste.

Some progress has already been made: starting April 1st, Delaware will replace a traditional reliance on institutional care for seniors with a strong emphasis on community living. State agencies are also coordinating efforts to improve the quality and reduce the cost of care for those who have traditionally been cared for in the state hospital and young people aging out of foster care.

The use of technology is critical to improving health care quality and reducing costs for individual patients and doctors. A next step is to leverage technology to create a claims and cost database to enable the state to understand what efforts are effective:

“Business leaders have come to understand the key to improving performance is harnessing the capacity of information technology to aggregate and analyze data. This database will allow us to figure out why some providers get better results and why some providers create more costs without better results to show for it. We will be in a position to reward what works and change what doesn’t.”

The Governor discussed the need to encourage individuals to take responsibility for making healthy choices by building on efforts begun by the Governor’s Council on Health Promotion and Disease Prevention, the Sussex Outdoors Initiative, Delaware institutions of higher education, and others. He also announced that state campuses will become smoke-free.

“Turning around this cost curve will not be easy and it will take time. But it is work to which we must commit — urgently and earnestly — if we are to put ourselves on a sustainable financial course and retain the freedom to invest in our children and our future.”

Transcript of the Governor’s 2012 State of the State message.

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