DELAWARE GENERAL ASSEMBLY NEWS
Official Statement:
November 13, 2025
Statement from the House Republican Caucus on the Passage of House Bill 255
By House Republican Caucus
NOTE: The following is a reaction to today's House passage of House Bill 255.
Needing a minimum of 25 votes to pass, the measure garnered 26 "yes" votes, all of which were from members of the House Democratic Caucus. The final tally was 26 “yes,” 13 “no,” and two absent. The leadership of the Senate chose not to bring their members to Legislative Hall today, despite being called back into extraordinary session by the governor. Although unconfirmed, it is believed the upper chamber will convene next week to consider the bill.
Less than eight months ago, the Delaware General Assembly enacted legislation to reform Delaware corporate law and restore predictability to the adjudication of cases coming before the Chancery Court. This was a reaction to companies, including SpaceX, Tripadvisor, Dropbox, Andreessen Horowitz, The Trade Desk, Neuralink, and many others, announcing plans to leave Delaware and incorporate elsewhere. The First State's long-standing status as a destination for incorporations has reaped enormous benefits. Corporate franchise taxes, business entity fees, corporate income tax, and escheat (abandoned) property provide more than a third of our revenues. Those figures are measured in the billions of dollars and are a fixture of our state’s financial foundation. By contrast, House Bill 255 will make permanent changes to our state’s business tax code to deal with a fleeting situation and a comparatively modest amount of revenue. This legislation is not only a sharp break with historical precedent, but by decoupling our tax code from aspects of federal law, we are denying Delaware businesses incentives for facilitating research & development and the purchase of new equipment. Enacting HB 255 will make our state less attractive for developing domestic enterprises and give corporate leaders who are uncertain about retaining their presence here another reason to relocate. Just yesterday (11/12), Coinbase announced it was leaving Delaware to reincorporate in Texas. The company's chief legal officer cited Delaware’s unpredictable business climate as the top reason for the company's decision. Meeting in an extraordinary session and changing our House Rules to allow remote voting solely to ensure the passage of House Bill 255 will do nothing but confirm that Delaware is now a volatile business venue. Enacting this measure is a fool’s bargain that trades short-term monetary gains for long-term financial stability and an uncertain future.
Opinion Article:
November 12, 2025
Decoupling is Bad Business for Delaware
By Rep. Mike Smith
As someone who had the privilege of working for one of Delaware’s greatest governors, Mike Castle, I learned early on that good policy is about balance — balancing our budget, our economy, and our reputation as a state that means business. Governor Castle taught us that stability, transparency, and fiscal discipline are not partisan ideals; they are the foundation of Delaware’s economic success. That foundation is what’s now at risk. There’s growing talk in Dover about “decoupling” Delaware’s tax system from the federal Internal Revenue Code in response to short-term revenue forecasts. On the surface, this may sound like a simple technical adjustment. In reality, it would be one of the most disruptive and short-sighted moves our state could make — one that would inject uncertainty into our business climate, complicate compliance for thousands of Delaware employers, and undermine decades of fiscal credibility. Delaware’s Fiscal Reputation Was Built on Stability Delaware’s status as the “corporate capital of America” is not an accident. It’s the result of careful stewardship and a commitment to consistency. In 1977, then-Governor Pete du Pont created the Delaware Economic and Financial Advisory Council — known as DEFAC — to provide non-partisan, data-driven revenue forecasts and to prevent the kind of political swings that can destabilize a state budget. DEFAC’s role is to ground our decisions in facts, not fear. It is why Delaware has maintained one of the most predictable and transparent budgeting systems in the country. It’s also why, even in times of economic uncertainty, we’ve avoided the fiscal chaos that plagues other states. DEFAC’s most recent report showed a modest two-year revenue adjustment of about $146 million — roughly 1 percent of Delaware’s projected $13.6 billion in revenue. That’s well within the 2-percent “set-aside” we intentionally built into our 98-percent budget spending rule. In other words, our system worked exactly as it was designed to. There is no fiscal emergency. There is certainly no justification for rewriting Delaware’s entire tax structure in response. Decoupling Would Create Chaos for Businesses Delaware currently operates under rolling conformity — meaning our tax code automatically aligns with changes to the federal code. This makes filing easier for businesses, reduces administrative costs, and allows the Division of Revenue to efficiently leverage IRS systems. It’s one of the quiet, practical reasons so many companies choose Delaware. Decoupling would break that alignment and create a compliance nightmare. Businesses would have to track separate state and federal rules, adjust their books, and potentially file amended returns — all for a change that may not even move the fiscal needle. For small and mid-sized businesses, those costs are real. Ask any Delaware entrepreneur — whether it’s Sam Calagione at Dogfish Head in Milton, the innovators behind startups like Niimax, Avkin, or Second Chances Farm in Wilmington, or the Edge Grant recipients across Sussex and Kent Counties — what they value most in a state partner, and they’ll tell you: consistency. They need to know the rules of the game won’t change mid-season. Decoupling would do exactly that. Bad Optics, Worse Outcomes Beyond the practical headaches, decoupling sends the wrong signal. States like Texas, Nevada, and Wyoming — all competitors for new investment — would love to see Delaware trip over its own success. They would seize on this decision as proof that Delaware is unpredictable or that our business climate is no longer stable. Let’s be clear: as a small state, whatever Delaware does will not move national markets. But it could absolutely move perception — and perception drives investment. If businesses think Delaware is turning away from its pro-growth, pro-innovation roots, they’ll think twice about where to expand, hire, or headquarter. Let DEFAC Do Its Job — and Let Delaware Stay the Course Decoupling would be a drastic departure from decades of bipartisan fiscal discipline. The better course — the Delaware course — is patience and prudence. Let DEFAC continue to do its work. Let the new federal tax provisions play out. And if future forecasts truly warrant action, we can revisit the issue with deliberation, not panic. Governor Castle used to say that Delaware succeeds when it “acts like a business — measured, steady, and forward-looking.” That philosophy helped us build a world-class corporate franchise, a thriving innovation economy, and one of the strongest reputations in the country for responsible government. We should not throw that away for the sake of a short-term forecast. Decoupling may sound like a technical fix, but it’s really a signal — one that says Delaware is willing to sacrifice consistency for convenience. That’s not the message we should send to the entrepreneurs, investors, and workers who have made this state what it is. Delaware has been the First State in more ways than one — the first to lead, the first to innovate, and the first to earn the trust of American business. Let’s keep it that way.
State Rep Mike Smith
News Release:
November 6, 2025
Bills to Allow Remote Voting, Make Tax Law Changes, to be Heard in Committees Tomorrow
By the House Republican Caucus
The Measures will be the Subject of Next Thursday's Extraordinary Session of the General Assembly Two measures under consideration in House committee hearings tomorrow could have a significant impact on future state spending and how lawmakers vote on bills. The House Rules and House Administration committees, both of which are comprised entirely of the five members of the House leadership, will take up House Bill 255 and House Resolution 19. House Bill 255 deals with the impact on Delaware from the federal One Big Beautiful Bill Act (OBBBA), which was signed into law in early July. Delaware, like other states, links portions of its tax laws to the federal code, so tax cuts and incentives included in the OBBBA can have an impact on Delaware tax collections. At issue are two provisions of the complex law that pertain to tax breaks for large businesses, specifically those related to research and development expenses and equipment investments. The new provisions gave business owners greater flexibility in claiming deductions for these expenses and made these favorable terms retroactive to 2022. According to the Delaware Division of Revenue, if no action is taken, Delaware would lose a total of $410 million in revenue over the current and next two fiscal years. HB 255 would "decouple" Delaware's tax code from these aspects of the federal law, reportedly reducing the state’s three-year total revenue loss to $73.8 million. In calling the General Assembly into an extraordinary session to address this issue, Governor Matt Meyer stated that the shortfall was because: "Washington keeps handing out tax breaks to the wealthy while working people get left behind." Not everyone agrees with that perspective. The Delaware BioScience Association (Delaware Bio), a group dedicated to advancing bioscience innovation in Delaware, noted in a recent post that the OBBBA “once again allows companies to deduct their domestic R&D costs upfront instead of stretching it out over five years.” Proponents of the change maintain that it provides both predictability and a boost to advanced manufacturing and rising start-ups in the biotech sector, enterprises that many Delaware officials believe will be key to delivering future quality jobs and new sources of state and local revenue. Delaware State Chamber of Commerce tax expert Marie Holliday was quoted in the same piece saying that the legislation was an investment in the long-term growth of critical emerging industries. “I believe this is a win for our state,” she said. State Rep. Danny Short, R-Seaford, a member of the budget-writing Joint Finance Committee, questioned the governor's skewed sense of urgency. "Early this year, the Meyer administration presented the JFC with projections showing slowing state revenue growth and significantly higher outlays outpacing that growth," he said. "In fact, it predicted that spending would increase by 5% in each of the next two fiscal years, that we would entirely burn through our $469 million reserve budget smoothing fund, and would face a budget deficit of nearly $408 million by FY 2028. That's an amount nearly identical to what the governor cited in calling us back into session! Somehow, that wasn't a priority, but this is?" Rep. Short also noted the lack of accountability by House and Senate Democrats, who control the annual state budgeting process, as well as the former Carney administration, for the dramatic increase in state spending over the last five years. Comparing FY 2021 to FY 2025, actual General Fund appropriations jumped by $2.4063 billion, or more than 53.2%. "That does not even include the expected 7% increase in the current fiscal year," he said. The second measure to be considered tomorrow is House Resolution 19, which would amend the internal rules governing the House of Representatives to allow members to vote remotely whenever the House meets outside its regular session, which begins on the second Tuesday in January and concludes at 5 p.m. on June 30. The new rule requires that at least 21 of the 41 House members be present in the House Chamber, and that members wishing to vote remotely must ask for and receive permission from the Speaker of the House to participate. If approved when the House meets next Thursday, the rule change would permit up to 20 members to participate in the voting from anywhere in the world. Rep. Short noted that House Bill 255 is a three-fifths supermajority bill, requiring a minimum of 25 of the chamber's 41 members to approve. The House Democratic Caucus has 27 members, so the absence of just three of its members would eliminate the possibility of passing the measure solely on Democratic votes. "While it's not explicitly stated, I believe there is an expectation for lawmakers to meet in person at Legislative Hall, debate bills face-to-face, allow the press and the public to witness, and be available for questioning afterwards," Rep. Short said. "The only time we should be casting votes remotely is under the most dire of circumstances. I view this rule change as not only a political convenience for the upcoming session, but also as the camel's nose under the tent. If we pass this, I predict it will not be long before this rule is again modified, further expanding the use of remote voting." Tomorrow's committee action on both HR 19 and HB 255 will start at 11 a.m. in the Joint Finance Chamber of Legislative Hall in Dover. The proceedings are open to the public and will be streamed. To watch the meeting virtually, or offer comments to the committee, visit the General Assembly home page and access the appropriate links under the "What's Happening" box.
Opinion Piece:
November 3, 2025
Real Solutions to Fix Delaware’s Deficit, Not Another Tax Hike
By the State Rep Bryan Shupe
In recent days, Delawareans have been asking a straightforward question: Where can the state cut spending right now to avoid another tax hike? It’s the right question. Delaware faces a serious budget deficit, and while some in Dover reflexively look to taxpayers for more money, families and small businesses cannot afford to be the state’s ATM. At home and in business, Delawareans make hard choices, cut waste, and live within their means. State government must do the same. With a special legislative session on November 13, we have a chance to shift direction — away from short-term spending and toward long-term responsibility. That means identifying real, immediate savings, not commissions, studies, or vague promises to save later. Here are three places to start today: 1. Stop the $150 Million Legislative Hall Parking Garage and Private Tunnel At a time when parents are asking for more reading support in classrooms, when neighborhoods are asking for more police presence and safer streets, and when infrastructure needs across Delaware continue to grow, the state should not be spending $150 million on a luxury parking garage and private tunnel for politicians. This project must be stopped — not paused or reconsidered. Stopped. Delawareans work hard for every dollar they earn. They deserve a government that prioritizes their needs, not perks for elected officials. Ending this spending would immediately protect taxpayers and send a clear message: public service is about serving the public, not subsidizing comfort for politicians. 2. Re-Evaluate the $145 Million University of Delaware Subsidy Delaware taxpayers currently provide $145 million to the University of Delaware, much of which funds salaries and benefits. Meanwhile, K-12 schools across our state are fighting for critical resources — whether for reading specialists, school safety officers, or student mental health support. Higher education matters, but taxpayers shouldn’t be the only funding source when the university has an endowment and private fundraising capacity. We need a balanced conversation about how much UD can absorb internally and how much taxpayer support is truly necessary when our local public schools continue to struggle. This isn’t anti-education — it’s pro-accountability, pro-transparency, and pro-prioritization. 3. Eliminate Over $50 Million in Private Wilmington Building Subsidies Each year, buried in bond bill epilogue language, more than $50 million in taxpayer dollars is directed to privately owned buildings in Wilmington. These are not state facilities. They are private real estate projects funded through carve-outs that many Delawareans never even hear about. This spending should stop. Government shouldn’t quietly funnel millions to private developers while volunteer fire companies, EMS providers, and school districts across Delaware fight for basic funding. Every community deserves fairness — not just the one with the most political pull. The Bigger Issue: A Spending Culture That Outpaces Reality These cuts alone total more than $345 million. But the deeper problem isn’t just a handful of projects — it’s a culture of spending without long-term discipline. Over the last four years, Delaware state spending has grown 30%, while revenue has grown only 18%. For next year’s budget, spending increased another 7%, despite revenue growing less than 2%. In a household or business, that math doesn’t work. It shouldn’t work in government either. Budgeting based on political convenience instead of economic reality always leads to the same result — tax hikes. Unless we change course, Delawareans will once again be forced to pay more to fix problems government created. A Responsible Path Forward: The Government Limitation Act (HB 427) To protect taxpayers and restore responsible budgeting, I have revived HB 427, the Government Limitation Act. This legislation caps annual state spending growth using real-world economic indicators, like GDP and private-sector wage growth, ensuring that spending grows responsibly — not recklessly. Many states use similar models successfully. The result: more stable finances, fewer sudden deficits, and fewer tax increases. This is not about partisanship. It is about stewardship. Delaware’s budget should serve taxpayers — not the other way around. Fiscal Discipline Today Means Lower Taxes Tomorrow Delaware stands at a turning point. We can continue overspending and turning to taxpayers when the bills come due, or we can lead with discipline, transparency, and respect for the people who fund this state in the first place. Delawareans sacrifice, plan, and work hard. They deserve a government that reflects those values. Stopping wasteful projects, prioritizing core needs, and adopting long-term fiscal safeguards will protect families, strengthen our economy, and keep Delaware affordable for the next generation. Now is the time to act. Let’s protect taxpayers instead of punishing them. Let’s stop the waste, fix our budget, and chart a responsible path forward — before the problem grows larger and the price for inaction becomes even higher.
State Rep Bryan Shupe
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