Neighboring Effects

MESSAGE FROM THE PRESIDENT

May 12, 2025

As a kid growing up in the Chicagoland area, it was a “big deal” to travel to another state. Yes, we could drive north to Wisconsin and cross the border in about an hour, and do likewise traveling southeast into Indiana. When I relocated to Washington, D.C. and then here to Delaware, I got used to other states being close to one another and that traveling to one, and then another, was no big deal. However, for organizations like ours, and policymakers, it is a big deal. What our neighboring states say and do, and the actions they take, directly impact our workforce. Because of Delaware’s geography, a substantial majority of Delawareans have relocation options. The reasons to look elsewhere can vary—from school choices, a more diverse housing inventory, taxes, and more.

Here in Delaware, we’re grateful to have no sales tax and low property taxes, though that’s about to change. Currently, a proposal to raise the personal income tax rate on thousands of Delawareans is being considered in the General Assembly. At the same time, over in New Jersey, those campaigning for public office are all talking about cutting taxes to keep residents from moving and as a way to attract people to move there. Our Legislature should remember that people have choices, and it doesn't take much to force the most mobile among us to consider alternatives.

News You Can Use

The economic calendar this week kicks off tomorrow with April results for the consumer price index and the NFIB optimism index. On Wednesday, a number of Fed leaders are giving speeches, while on Thursday we’ll see U.S. retail sales figures for April, the Philadelphia Fed Manufacturing Survey, industrial production numbers for April, March business inventories, and hear speeches by Fed Chair Jerome Powell, and Fed Governor Michael Barr. We finish up the week with import price data, housing starts, and building permits from April.

This is another busy week for scheduled earnings calls. Dole, Fox Corp, NRG Energy, Brinks, DaVita, Hertz Global, Simon Properties, and Topgolf Callaway Brands are among a long list of calls today. International Gaming Technology, Silicon Labs, Under Armour, KinderCare Learning Companies, and others are scheduled for Tuesday. Cisco Systems is the Wednesday headliner, while Walmart headlines the Thursday calls and is joined by Deere, Gambling.com Group, Telus, and others.

Michael J. Quaranta

President

Delaware State Chamber of Commerce

Uniquely Delaware

The Correlation Between Tax Burden and In-Migration

Delaware is the only state in its region to have maintained a positive domestic migration rate over the past four years. While neighboring states like Pennsylvania, New Jersey, and Maryland have experienced net outmigration, Delaware has continued to attract new residents. But that edge is fragile.

According to the Trends Shaping Delaware's Future report, “a lower tax burden appears to be loosely correlated with population growth,” with states like Florida, Texas, and Tennessee seeing surging populations while high-tax states are losing residents. As other states cut taxes to stay competitive, any move that increases Delaware’s tax burden could risk tipping the scale. Read the full report >

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