O'Mara sees progressive change for Delaware's economy, schools & more

With the Delaware Primary Election weeks away, 350,610 registered Democratic voters will have the opportunity to decide between three candidates for the governor’s office. While the state continues to grow, its demographics shift, too. Older and out-of-state residents are increasingly retiring in Delaware while the Black and Hispanic populations continue to grow, as well.

The next governor will have four years to contend with a struggling school system and housing affordability crisis as they contend with flat revenue growth for state finances. The Delaware Business Times asked five of the six candidates running for governor the same questions on the minds of many in the First State’s business community, including National Wildlife Federation CEO Collin O’Mara.  Republican candidate Jerrold Price did not return our request for an interview. The conversation with O’Mara has been edited for length and clarity.

Why run for governor? 

Delaware is just in desperate need of reform. We have the potential to be performing much better in our schools, our health care systems and our economy overall. More of the same isn’t going to get it done. I got into this to propose a different policy agenda than some of my other colleagues. If you look at other Democrat-leading states, a lot of the places where we’re underperforming is where those states have figured it out. We’re not adopting those same solutions that prove to be successful. So this is an opportunity to reform the system but also to get much better outcomes for people across the state.

Between 2017 and 2023, Delaware’s GDP has grown 6.7%. At the same time, the country has grown its GDP by 14%. What plans do you have to bring our economy on track to reach that level?

It’s really about building on the strengths of our state that we’ve had but making sure they evolve to the 21st Century. We don’t have auto plants, but we can replace that with clean energy. There’s opportunities with the hydrogen economy, offshore wind and renewables. We have huge experience from existing companies like Chemours and Dupont and there’s new companies here like Versogen. There’s a huge opportunity for us to grow in clean energy. There’s also an opportunity in fintech  and cybersecurity, and we can also head more in life sciences to focus on developing a focus on sustainable chemicals of the future. When we think about agriculture and the poultry sector, they’re facing pressures that come with a changing landscape with climate change. To address that, we can look to smart ag technologies to get ahead of that. 

If we did some of these things, you’d see growth in the 15 to 20% range. We’ll see about 40,000 jobs just staying with the status quo. I think the state has been aggressive in pursuing economic strategies in the past. 

The Delaware Prosperity Partnership (DPP) has done good work in site location, but there’s some federal pieces that the state hasn’t tapped into for clean energy, like the CHIPS Act for semiconductors. I do think it’s possible to make this kind of alignment in four years where we can focus on what Delaware is good at. These sectors are very much in demand, and there’s the federal dollars to leverage that evolution. My strategy is just about taking our existing strengths and taking it to the next level.

Gov. Carney has formed a public-private partnership with the DPP to make decisions to attract, retain and grow businesses in the state. If elected governor, what do you envision your administration’s role with the DPP?

They’ve done an incredible job working with companies looking for new locations. Where we need to evolve is frankly looking at planning for the future and being more strategic in which direction we need to go. One of the recommendations of the Delaware Business Roundtable recently was to develop a Futures Council, which dovetails nicely into this. We need to be very specific about how we help more Delaware based companies grow. 

We need to make sure the innovation that starts at the University of Delaware or Delaware State University stays in Delaware. We also need to develop a culture of entrepreneurship, and it’s not just research and development for companies in other parts of the world. I see that we can work with the DPP to push for a cohesive strategy for the economy we’re trying to build in the future.

There have been several investments made in the past four years through state taxpayer-backed grants. Do you agree or disagree with this approach?

I think we don’t do enough to support Delaware companies that are trying to grow. The companies that can go from five to 50 employees are more likely to have a long term commitment. I’d like to see more focus on homegrown, small businesses. In the past, we didn’t have the money for small business programs, but there was the funding for grants for a couple of warehouses that are automated. I’d rather see funding invested in companies to make them grow here. But there’s also the question of speed being more worth it to companies than money, and that’s where it gets to permitting.

Collin O’Mara was the first to formally file for the governor’s race earlier this year. His platform promises infrastructure investments on the front end to improve outcomes for all Delawareans. | PHOTO COURTESY OF THE COLLIN O’MARA CAMPAIGN

The U.S. Census projections have shown that Delaware’s senior population continues to grow while our younger residents are leaving. What plans do you have to attract, train and secure workers in our state?

I was knocking on doors the other day, and someone told me their kid wants to stay in Delaware but they’re not sure how it would work because they need a job and they have student loan debt. For me, it’s a question of how we get those students, especially those graduate students to make the decision to stay. There’s a huge population of people we can retain, especially with our tuition rates. There’s also people who are aging out of the military and ending their career at the Dover Air Force Base, and most of them are retiring men at the age of 40. That group of people have incredible technical skills in engineering. 

If you look at the 30,000 job openings, there’s a massive skill mis-match here, and a lot of those jobs aren’t necessary jobs for young college graduates. We have to make the investment in the infrastructure for the future, and Delaware Workforce Development Board aligns with that so we can match the skills and upscale what we have.

The Delaware Economic and Financial Advisory Council has reported tightening revenue projections. The once-in-a generation $1 billion American Rescue Act Funds must be committed by the end of this year, before the new governor is sworn into office. What is your plan when it comes to balancing the budget?

The combination of those two factors requires looking at the budget in a holistic way that arguably hasn’t been done since 2017. There’s a lot of places right where we spend a lot of money because we don’t make upfront investments and we’re paying for consequences. For example, we’re paying more in health care costs because we’re not investing in programs to make folks healthier on the front end. 

I’d like to go line by line to find places where we have made those kinds of expenditures because we’re paying for a suboptimal outcome if we didn’t make those investments. If we spent more on child care, housing and education, we’d actually save money in other parts of the budget. And that would make us sustainable.

Gov. Carney has also instituted policies such as the budget stabilization fund as well as passing “one-time” programs with a supplemental appropriation bill. Do you plan to continue this approach, or will you manage state finances in a different manner? 

It’s incredibly important that we keep our triple A bond rating. We need to make sure we have enough reserves for a Rainy Day fund, while being fiscally responsible. But right now, we have not done nearly enough to actually look at the return on investment. If you focus on expanding primary health care, the more we pay in emergency room costs. 

I do think you would see a much more aggressive investment strategy from us, to make sure we’re making investments in categories we’ve talked about for years while being fiscally responsible, while being realistic on what investments will strengthen the economy. Depending on what the revenues look like, we can make a decision to add to the budget stabilization fund.

Do you think Delaware has used that once-in-a-generation ARPA funding wisely and in a way that will solve significant challenges facing the state? If so, what example can you identify where this funding has made a major impact in our state? 

I think we’ve been less innovative than other parts of the country. The current administration was very effective at using the resources for the kind of the pandemic response and investments in affordable housing… but other states are using this to help build out water infrastructure, public transit broadband. Other states have been looking at how to help build out the systems that were in some ways exacerbating the vulnerability shown by COVID. We haven’t been nearly aggressive in that view.

Collin O’Mara walks in a parade, promoting his campaign’s efforts to focus on the future economy that will address climate change and more. | PHOTO COURTESY OF COLLIN O’MARA

Much of Delaware’s tax base relies on income, corporate taxes and franchise fees. What, if anything, would you change about the tax policy here in the First State?

We haven’t had significant tax reform since 1998. We have one of the lowest kinds of standard deductions, and a fairly anemic child care credit. If you modernize things like that, that would reward people for getting into the workforce which would solve a lot of our issues. I’d like to think of the tax code as we get folks out of poverty, and there’s places to improve … we have a tax code that is pretending people who earn $60,000 are wealthy, it doesn’t reflect reality. 

There’s also some areas in gross receipts that can be looked at. Small businesses are just trying to make a profit and are paying taxes beyond what they have in their revenue. Some pieces [of the code] haven’t kept up with the cost of goods. But there’s also ways we can invest in public benefits, for example, the accommodation tax for short term rentals that just passed in Sussex County. I think there’s opportunities to look into some of the transfer tax or the accommodation tax to help sustain those economies, like putting more into beach nourishment. We also haven’t looked at our excise tax in a while, particularly for vaping and cigarettes, and there’s also some public health benefits for visiting those. I think we need to look across the board. And figuring out an additional dedicated stream of resources to deal with funding inequities is going to be important.

Much has been said over the years about how slow the permitting process has been. What, if anything, would you change about it – or would you leave it as is?

When I was [DNREC Secretary], we made the case that we can be robust and efficient at the same time. When I started, the Brownfields Program, it was well over three years to get through and after a couple of years, that process was down to six to nine months. How we did that was looking through the requirements and doing a value stream mapping, looking at where the delays were. We found that much of it was delays between comments that were taking months at a time. You see the same thing with certificates of occupancy, impact studies, transportation… and the county zoning process.

There’s no reason that we’re not able to turn decisions quickly. It could be one of our competitive advantages if we can get people in the room on this. Before I was with DNREC I was working for the Mayor of San Jose, and the whole first floor of city hall was a permanent station to help folks figure out what they needed and the timeline they were on for projects. The model is basically saying we’re not going to make people work to figure out what they need. We’re going to bring the team together.

Delaware was recently reported to be ranked 45 in the country in third and eighth grade test scores. What specific policies do you have to improve public education in Delaware?

We have danced around [how to improve public education] for the past 40 years. Our schools are underperforming and we’re losing a generation of kids. I think it all starts with an equitable funding formula, one that is based on needs and not headcount. Because when you solve that need, that sets a baseline funding and then you can make sure you have the resources to really help kids learn. We also don’t have the staffing ratios that are based on needs, and so I want that to be looked at as well.

I think we need to upstream universal pre-K because states that do have it are showing a significantly greater rate of reading proficiency by the time students are in fourth grade. We also need to be thinking about how to break that cycle. If we invest in universal meals, that helps a child who’s been on a bus for an hour and hungry and in class for hours, and who may be acting out because he’s hungry. 

Some of these benefits are going to come over the course of a generation, but some of these, like staffing ratios, have immediate impacts. You can see that overnight in Pennsylvania, school breakfast was adopted and test scores went up and kids acting up went down. 

As we’re making progress, there’s also a conversation that needs to happen around the school districts. We have 19 school districts for 1 million people, and in Philadelphia, the school district represents 2.5 million. There’s some efficiencies that can be made in that regard.

But the reality is that we’re going to need millions more investment per year in education. There’s some conversations that need to be had around property tax assessments and how that creates an equitable funding platform for all these resources. But if we make these changes, we can have that transformational change. We don’t have to wait.