by JL Haynes, Public Policy & Advocacy Manager

During the second session of General Assembly 152, the Legislature and the Carney Administration tackled significant issues facing Delaware. The Governor’s Recommended Budget, SB 225, highlighted concerns from the business and nonprofit communities about rising healthcare costs and competition for talent. Governor Carney’s $6 billion budget contained two for-state health plan cost increases, prompting a significant policy response in HB 350 from the majority legislative caucus. Recommended increases to teacher salaries also resulted in an additional cost to the budget. 

Through the markup process, the General Assembly added $50 million to the Budget Stabilization Fund via the one-time bill, SB 326, to maintain the teacher raises in subsequent years.  The chairs of the Joint Finance Committee made another notable markup change: Senator Trey Paradee and Representative Kimberly Williams removed all named external organizations in the State Operating Budget and epilogue, SB 325, moving $4.3 million to the Grant-In-Aid Bill, SB 327. This will ensure a constitutional number of votes for authorizing state funding to external organizations.

The Grant-In-Aid bill ballooned in size to $98 mm and included increases for GIA applicants, with the largest percentage going to fire companies, EMTs, and paramedic services. We continue to see a trend where Grant-in-Aid increases in size but the proportion of funds to nonprofits is declining.  This year only 41% if the bill was directed to community-based organizations that are not first responders.  There also was a reduction in the Community Reinvestment Fund (CRF) , despite the total Bond Bill, HB 475, being over $1 billion. This year’s CRF requests totaled over $200 million with only $40 million available for community organizations, resulting in funds for just under 150 organizations.

Bills of Note

After Governor Carney’s State of the State address, House and Senate leadership introduced HB 350,  creating the Diamond State Review Board for nonprofit hospitals. This board establishes an external politically appointed body to review nonprofit hospital budgets to reduce healthcare costs. DANA opposed this legislation, as state oversight of a nonprofit would usurp the authority of the nonprofit board, impacting their ability to fulfill their fiduciary responsibilities. This could set a precedent that would extend this type of oversight to all nonprofit organizations in a contractual relationship with the State. After months of negotiation, the hospital systems and the Administration reached a compromise, and the Governor signed the bill. However, the final draft still includes the concerning governance implications, so DANA continues to monitor its implementation for potential sector impacts.

From a regulatory perspective, DANA commented on Rule 601 changes to Gathering licenses and continues to monitor the promulgation of regulations for the Paid Family Leave Act and the Data Privacy Act.

DANA monitored several other pieces of legislation, including:

• HB40: Grant-In-Aid Committee: Establishes a Grant-In-Aid Committee | Status: Stalled in Senate Executive Committee | Position: Neutral.
• HB291: Campaign Contributions and Expenditures: Requires prohibited campaign contributions to be paid to the State Treasurer for deposit to the General Fund. | Status: Awaiting Governor Action | Position: Support
• HB438: Paid Family and Medical Leave Insurance Program: A cleanup bill for the PFML program. | Status: Stalled in House Appropriations Committee | Position: Monitor
•  SB13: Protect Medicaid Act of 2024: Establishing Health Equity fund |Status: Awaiting Governor Action | Position: Monitor
• HB17: Paid Sick and Safety Leave: This Act requires all employers in the State to provide employees with a minimum of 1 hour of earned sick time and safety leave for every 30 hours worked. For employers with nine or fewer employees, the time may be unpaid, job-protected time instead of paid time.  | Status: Stalled in House Appropriations Committee | Position: Monitor
• HB389: Charitable Gaming: Creates an annual raffle license and extends the reporting requirement to 60 days after the event | Status: Awaiting Governor Action | Position: Monitor

 For a full list of our legislative tracking please click here.

DANA was successful in making changes to legislation and regulations to improve their impact on the nonprofit sector.  Feedback from our Public Policy Community of Practice was included in Representative Eric Morrison’s final iteration of HB 17 Paid Time Off. Additionally, public comments from the nonprofit sector on the Rule 601 Gathering Licenses resulted in some nonprofit-friendly adjustments to the final regulation.

A major focus this year was on grants and contract reform. DANA had moderate success in the Grant-In-Aid epilogue language, with the Controller General’s Office codifying some language related to the Grant-In-Aid application audit requirement.  Section 9 of the bill’s epilogue language clarifies that applicants can provide a range of documents to satisfy the audit requirement.  DANA plans to continue working on lasting contract reform through the summer while amplifying the sector’s Get Out to Vote activities. Many members participated in our contract coalition, the nonprofit rally, or signed a letter requesting specific policy changes, laying the groundwork for a big push for sweeping change in the upcoming election year. 

Thank you to all our members for their advocacy efforts this year. We plan to maintain this momentum through the summer and into the fall budget process and we look forward to advocating fiercely for our sector!