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Pushing the data of the Moody’s Analytics regarding Delaware being the only bad risk in the country, some other illuminating factors emerge.  The revenue data taken from our tax receipts over the past two years, portends to ever decreasing departmental budgets state wide in 2013 and 2014.

This problem will be compounded further, by this fourth quarter competing with the largess of last fourth quarter.  If you remember, incomes were very high in December 2012, as a lot of capital gains were cashed in to beat the tax increase beginning in 2013.  There was a huge flood of tax revenue that pushed up estimates, both in personal and corporate income taxes.  The December revenue was 23.3% higher than December 2011.

That largess won’t be coming in this year and we will have to deal with the difference.

Second, due to impingements to our economy, our tax revenue will be under last year.

Delaware employment is growing slowly.  Yet there are only 18 states with a total unemployment (U6) higher.  As a result, personal income tax revenue is down.  This was compounded by a tax decrease recently given to the top 1% of earners. Passage of this tax rate decrease, means those who were the only people actually gaining income, will now, not be paying any of their increases into the treasury, as is being required of everyone else.

Across the nation, total state tax revenues first quarter 2013 rose 6.8%.  Across the nation state income taxes grew 18.4%, state corporate taxes grew 9.4%, and state sales taxes grew 5.5%  ….  Delaware does not have a sales tax.

Only 6 states had declines in personal income tax that same quarter.  Delaware led the pack as having the largest decline at 15.8%. States less shy about raising taxes, California and New York had the highest gains.  $6.3 billion and $1 billion respectively.  Incidentally as correctly predicted by the kavips economic model, both economies are thriving.

Based on withholding data, Delaware’s amount withheld dropped from a 9.3% increase in last quarter 2012, to a 2.0 increase in first quarter 2013, both over the previous year.  At the outset, the potential exists for a loss of that 7.3% difference in fourth quarter 2013.

The wealthy pay in the form of estimated payments.  They don’t use withholding.  The average estimated payment’s percentage increase over 2012, was 12.2%.  However the 4th quarter payment was a jump of 23.3% over the fourth quarter of the previous year.  Meaning the average of the previous 3 quarters was a negative or -3.7% from the year 2011.  Only that windfall of the fourth quarter, driven primarily by federal tax changes, gave Delaware its positive increase in estimated payments for 2012. Bottom line.  We were lucky. First quarter 2013, they are up 7.9% in comparison.

Corporate tax.  Overall across the nation, corporate tax increased by 9,4% this first quarter of 2013 over the same quarter last year. 30 out of the 46 states that have corporate income taxes showed increases. 16 of them were double digit increases.  Virginia suffered the largest decline: $87 million.  New York showed the biggest gain:  $239 million.

Tax Revenue is directly related to economic growth.  Growing economies increase personal income taxes and sales taxes as income gets spent. Delaware’s economy is estimated by the Federal Reserve of Philadelphia for the three months prior to June 2013, to lie between the growth rates of 0.1% and 0.5%.

Take the first quarter of 2013.  It is a harbinger of things to come….  In Delaware, the amounts collected Jan-March.

  • Personal income tax:  2012 = $411 million   2013 = $346 million …. drop of $65 million or -15.8%
  • Corporate income tax: 2012 = $65 million    2013 = $73 million …. increase of $8 million or 12.3%
  • Total with other (fees) included:  2012 = $956 million  2013= $883 million…. drop of $73 million or -7.6%….

Our current state budget is running $73 million in the red based on actual versus revenue projections.  And this does not even include the fourth quarter drop off. Delaware was one of only 5 states capturing less personal income taxes in 2013’s first quarter than in 2012. Rhode Island, Indiana, Utah, West Virginia were its team mates. Delaware lost $65 million (-15.8%); West Virginia was second losing a comparative paltry $21 million. or -5.4%.  The others:  Rhode Island -$13 million (-6.4%); Indiana -$5 million (0.5%); Utah -3 million (0.6%)

It was estimated that over the year Delaware’s tax decrease would cost the state $70-80 million.  if averaged per quarter, that would be $17 to $20 million lost to the state every 65 working days.

One would conclude that a big part of Delaware’s state revenue problem is a direct result of that tax break we handed over to the top percent of Delawareans…. There are 15 states with higher top marginal tax rates than Delaware.  All but one of them (Idaho) are showing better growth than Delaware.  The belief that lower taxes creates jobs and better state economies does not agree with reality experienced by other states on a daily basis.

Again, the national economy as a whole is looking better.  Delaware is looking like the exception.  After the Great Recession the national total of state revenues dropped for 5 consecutive quarters. The national total of all state’s revenues has since grown 13 consecutive quarters…

The same criticism that applied to Obama after the Obamacare vote, applies now to Markell after the SB 165 vote.  Instead of trying to fix something that was working fine, one’s attention should have been spent on all that which isn’t (working fine)….

Recommendations for 2014:

Go to multiple tiered tax rates:

  • 10% on $1 million or more
  • 9% on $500,000 or more
  • 8% on $250,000 or more
  • 7% on $125,000 or more
  • 6.75% on $60,000 or more
  • Spend most of our money on Delaware’s people.  Hire empty positions. Keep the money here in state as much as possible.
  • Cut out from budget most consulting fees for out-of-state entities.
  • No hiring of outside specialists or corporate buddies.
  • Add more teachers, firemen, policemen where needed.
  • Push for building an offshore wind farm; override all Pepco’s objections.

The deep blue sea… How often have we heard that? So which of those adjectives are the more predominant, which of those words carries the most descriptive weight? A conundrum?

Not if you add the word “water” to each of those descriptive adjectives…. as in”


Still puzzled? Add the noun “wind”

Deepwater Wind
Bluewater Wind….

The Washington Post reports a deal has been struck and the first Offshore Wind Farm, (which was to be Bluewater Wind 5 years ago), is now going to be Deepwater Wind off Massachusetts and Rhode Island.

Rhode Island will now become the center for wind farm technology on the East Coast. If Delaware ever gets to this point, and one would think Markell would have been on top of this one, we will now be buying all our stuff from Rhode Island and importing it down the East Coast on barges, instead of vice versa.

The wind kinda of went out of Delaware today.

Opportunity Sets For Delaware To Become the Wind Hub

You'll Come A Waltzing Matilda With Me

2012 is a record breaking year.. We guessed because the ice melt was the largest ever recorded, and broke the old record a month before the melting season ended. Right now, summer in the other half of the world, is breaking records in Australia. They even had to put a new color on the temperature chart to show temperatures over 50 degrees C…..

If you look at this global temperature list, and add 2012 to the top,(the authors have not already), you see a point I’ll drive home.

Out of the eleven hottest years ever recorded, ten have occurred since 2001…. Which means only one of the top ten hottest years, 1998, was not in the past decade…

Here is the scary part. A 3 degree rise, was deemed to be cataclysmic. The US rose 1 degree last year…. As the chart shows, up till now, rises were in the tenths of a degree.

2012 just blew everything right out of the water.

And as mentioned last summer a tongue of ice cold Labrador current penetrated the Gulf Stream, and almost turned it away from Europe; wow, that would really change things over there

And you know who is to blame? People in the Caesar Rodney Institute who said global warming was a hoax, and the Republican party of the United States of America, who prevented all proper actions that could have minimized the extent, from seeing the light of day…

So be nice. The next time someone says they are a Republican? Say: “Oh, gee thanks again for ruining the world.”

I’m sure it will make their day….


The House and the Senate agreed Tuesday to extend a 2.2 cent per kilowatt-hour credit for wind power production through this year as part of the “fiscal cliff” deal. It also changed the incentive to let wind projects earn the credit if under construction — rather than in service — by the end of the year. Letting the credit end would eliminate 37,000 jobs. AWEA in December proposed extending the credit for this year and then ramping it down to end after five more years.

Time to get busy, Delaware.

Back To Building Offshore Wind
Photo Courtesy of Google right click for full image.


It’s time I put this in perspective.

Here are the news feeds.

A Different Romney Wins The Debate.
The Family Intervenes and Pushes Stuart Stevens Out of Inner Circle
Titians of Finance to Fight for Raising Taxes

Coupled with the opinion polls, what is happening is very obvious.

Americans support Democratic middle class values, they abhor the wing nuts of the Republican Party.

The opinion polls tell it all. While Romney was campaigning to see who could be the most conservative, he did very poorly against the Democrats when polled. Americans far preferred “the imploders” at first, people more mainstream in appearance, like Rick Perry, Newt Gingrich, Rick Santorium, .. that is until they became familiar with their values…

It is not coincidental, that the last two Republican presidential candidates were the ones with the most LIBERAL credentials. Because America accepts those credentials. What America rejects, is slash and burn Conservative policies, that require no personal freedoms to individual Americans, whether it is economic, vaginal, religious, or political. Everyone is expected to conform to a very narrow norm.

So we now have a Republican who did exactly what he said early during the primaries. He shook the Etch A Sketch and is now running as the Liberal Governor of Massachusetts.

“I will not give a tax break to the top 20%.
There will be no tax cut on the top one percent.
I will not get rid of Roe versus Wade. Abortion is here to stay.
I will not put religion into government. Government is Government. Religion is Religion.
I will not nuke Iran.
I will not cut one penny from government spending.
I will support the rapid growth of wind farms and solar energy.
I will not cut 716 million from Medicare, even if it IS in my economic plan.
I never proposed $5 Trillion in Tax cuts.
I will not cut spending. I will raise it by 2 Trillion Dollars.
Government is too small. I will grow government to make it better.
I will not stop women from getting abortions.
I will not stop the removal of God from government….
Homosexual marriage is not really that bad after all, as long as they LOVE each other and it’s not just sex.”

These were all in the debate. It was a different Romney speaking. Why? Because as a conservative he was losing. As a conservative he was out of touch with America. As a conservative HE WAS IN THE MINORITY WITH MINORITY VALUES.

As Conservatives long expected, Romney is a liberal. They know it. Really? How does anyone expect a Mormon to support Pat Robertson and the 700 Club? You do it out of expediency; not a genuine shared system of belief….

But the point of this is not about Romney. It is about Conservatism. Conservatism fails, and simply for that reason alone, it is not upheld by a majority of Americans.

Which means, to win, one has to be a Liberal Republican… Just look at the polls. As soon as the Liberal Romney comes out of the closet, the polls get real tight….

But, as we saw with Bush W. You may run as a Liberal, but when you get in, it’s the Conservatives who take over. Two wars, a pharmacy company bailout, and regular government operation, all which were financed by our grand children’s future payroll deductions. They get to make less money so today’s Republicans can take it all.

In other words, to be a Republican President, you have to “trick” yourself into that position.

So, America, I know it sounds nice now, but over and over and over you have said, no that is not what we want.

What we do want, is someone who will do what we want, when they get into running America. let’s take the last president for example. Obama got us out of a recession in record time. One that was far worse than the Great Depression to some extents. Obama saved the American Automobile Industry. To do so he had to drive hard bargains against all parties . Obama killed Osama Bin Laden. America got what it paid for when they voted Obama.

Why change horses in the middle of the stream, especially when the other horse is heading back in the other direction? The wrong direction according to almost all Americans?

Romney knows that backwards direction leads to ruin. That is why the new Romney pushed the campaign message- minder outside the inner circle, and why Romney is now currently running for women’s rights. for the secularization of government, for the complete protection of the environment, for the elimination of greenhouse gases, and for the increase of taxes on the wealthy. That is why Romney is doing better in the polls….

Conservatism is truly dead.


From Aaron Nathans of the News Journal…..

NRG/Bluewater Wind got good news on a different front Monday, as the federal government moved one step closer to issuing the developer a lease on a tract off the southern Delaware shore.

The Department of the Interior announced it would open a 30-day public comment period on the environmental and socioeconomic impacts of offshore renewable-energy projects off Delaware, Maryland, New Jersey and Virginia.

If the department determines no significant impact off Delaware, it will move forward with Bluewater to sign the lease, said its president, Peter Mandelstam. He said he hopes to secure the lease by the end of the year.

Once a lease on these ocean blocks has been secured, construction permits can begin. Or better put: Bluewater can proceed with more detailed environmental reviews to try to get a construction permit.

And to those of us who marshaled the deal in 08, here is a reminder of how time flies… Bluewater faces a September deadline to exit the Delmarva contract or pay $2.75 million, money it would get back if it successfully completed the wind farm.

The following concern has also been noted in the Federal overview of the project. Construction will take place near an area off Delaware, where ships typically anchor. Wind development should be avoided in that area, the U.S. Coast Guard has argued.

The anchorage area, off Delaware Seashore State Park, sits on the outer edge of Bluewater’s proposed development area.

map of Bluewater's location vis a vis shipping lanes

Every time I pay my electric bill to Delmarva, I sigh, knowing that had wind gotten underway faster, I’d be paying 60% less…….


It’s been news that NRG, who owns Bluewater Wind, is dragging it’s feet and being criticized for doing so.

John Kowalko correctly points out, that without the Obama administrations support for continuing credits, even he, it were his money on the line, would back out too…

So don’t blame NRG.. Blame the Tea Party. They changed the political climate in Washington far too much, that even though Obama campaigned for lifelong extension of wind credits, he now, has to put that once solid expectation, on the negotiating table…

Would you invest $2 to $4 billion if it would cost you $250 to $500 million every year? Of course not!

Forcing NRG to go through without the support of wind credits, is wrong.

We would scream if it were to happen to us, they should too.

The issue is that we don’t have renewable credits guaranteed anymore because of the Tea Partiers… They, not NRG, are the ones to blame, if Delaware does not become the first state to have cheap clean efficient energy created off it’s own shores….

So how do we go around them? Two ways. The simplest was conceived by Tommywonk: use existing nuclear guaranteed loans to build the wind farm. The money is available; do the paperwork, and pull a Black Eyed Peas…. “Let’s get it started…”

The second way, was brought up during Delmarva’s fight to stop the purchase agreement. That was to do what we did the last time private capital investment froze up: The Great Depression… Have the Government build the wind power source… During the Depression, the Fed’s built TVA, the Columbia River System, Hoover Dam, and a myriad of other dams, producing a large part of those states electrical needs.

New York, conceived, funded, and ran the New York Power Authority, which built, staffed, and ran the power generative facilities at Niagara Falls…

Whether it is our state, or the Feds who take the lead on building a government run wind farm off the coast of Bethany Beach, either way, it appears that some form of government will necessary, to start the turbines turning….


Wind Potential Offshore USA
Map Courtesy of US Dept. of Energy (right click for full image)

As one can see there is a lot of competition for offshore wind… At one point in time, Delaware was poised to become the center of offshore wind manufacturing. Unless we move quickly, that place in history will be lost….

And just like our once ground-breaking New Castle- Frenchtown Railroad, although considerable investment was put in place to get it running, the rest of the world quickly passed us by…. because Delawaeans did what Delawearns do… sit on their hands…

We need to court GE with all the good reasons why they should build their new 5.0 offshore turbines here in Delaware. We need to spawn the development of an offshore tower construction company set up in Lewes. We need the MAPP lines connecting DC to our coast to continue forward quickly without interruption. Furthermore, we need to get NRG moving on building Bluewater Wind as fast as possible. Finally we need Delaware’s political contingent, including the Vice President, to create the tension always necessary to make bureaucratic things “happen”..

Time is wasting; we are sleeping.. The alarms gone off; it’s time to WAKE UP!.


1. Internet search giant Google announced Wednesday it is partnering with banking conglomerate Citibank to invest in what is set to become the largest wind power project in the world, in southern California. Mountain View, Calif.-based Google said its wind farm, which will be part of the Alta Wind Energy Center in the Tehachapi Pass in Kern County, would generate up to 1.5 gigawatts of electricity. It said that would be enough to power 450,000 homes through Southern California Edison.

2. Windpower 2011 finished up today in Anaheim.. Out of that, the big news was that the regular boasting of 41,000 MW of domestic capacity and celebration of providing electricity equivalent to ten nuclear power plants were contextless figures that ignored wind’s chronic problems of intermittency, geographic/transmission difficulties, and its inability to provide baseload power. Breakthroughs will be needed to address these challenges, and experts agree that the R&D funding gap necessary to achieve those breakthroughs will come from governments, not private industry.

3. Delmarva Power, a Delaware-based business unit of Pepco Holdings Inc. said it has filed a request for the approval of its revised agreement with Synergics Eastern Wind Energy LLC, which has moved its wind farm located in western Maryland to central Pennsylvania. The filing was made with the Delaware Public Service Commission.Delmarva Power said it also has other agreements in place to supply clean, renewable energy to its customers. Some of these include a 15-year contract with AES Wind Generation, a unit of AES Corporation (AES – Analyst Report), for 50 megawatts of wind power; a 20-year contract with Synergics for up to 40 megawatts of wind power from its Roth Rock project in Maryland, expected to go fully operational next month; a 25-year contract with NRG-Bluewater, a unit of NRG Energy Inc. (NRG -Analyst Report), for up to 200 megawatts of offshore wind power from its planned project off the Delaware coast; and a 20-year contract with White Oak Solar Energy for up to 16,500 megawatt-hours in solar renewable energy credits, to go operational this summer. A quick check here, shows it has either yet to be filed, or has not yet been uploaded to Delaware PSC site.

4. Wind power’s vast supply chain, which produces the 8,000 components making up a typical wind turbine, continues to grow deeper roots here in the U.S. Today the industry employs 75,000 people, and over 400 wind-related manufacturing plants dot the map in 43 states, from California where the industry began 30 years ago, through the Midwest which now leads wind development, to the Southeast even though its first wind farm is still on the drawing board.

5. This past February, Secretary of the Interior Ken Salazar and Secretary of Energy Steven Chu unveiled a coordinated strategic plan, A National Offshore Wind Strategy: Creating an Offshore Wind Industry in the United States, which pursues the deployment of 10 gigawatts of offshore wind capacity by 2020 and 54 gigawatts by 2030. They announced $50.5 million in funding opportunities for projects that support offshore wind energy deployment.

6. The Connecticut House of Representatives overwhelmingly approved legislation Tuesday requiring first-ever regulations governing state review of wind power projects. Lawmakers voted 132-6 to back the bill calling on the Connecticut Siting Council to adopt regulations on setbacks, a wind power project’s impact on natural resources and other factors.

7. Currently, the market is being shepherded by developers who are scrambling to put turbines in the ground ahead of a 2013 expiration of lucrative federal tax credits for wind. Beyond that date, the industry’s fortunes are hazy. “You are going to see a real slowdown in ’13,” Vic Abate, General Electric Co’s vice president of renewables, said in an interview this past Monday at the above mentioned U.S. wind industry’s annual trade show in Anaheim, California. “Over the next 12 months you are going to see all great news. You are going to see project starts are up, units are being shipped, orders for turbines are going up. It’s going to give you a signal of security, but the reality is they are all targeted to end on December 31, 2012,” he said. A government support plan that must be renewed every couple of years only makes matters worse. “The hardship on the industry is this sort of stop-start policy,” said Lisa Frantzis, managing director for renewable and distributed energy at consultant Navigant. “If you look back it’s always been extended, but the timing can really impact things.”


Matthew Wald in his New York Times blog, has more information about the construction of the Electric Superhighway up and down Delaware’s coast.

Onshore, we use an AC grid, or one based on alternating current. But the link in the Atlantic would have to be buried, and alternating current does not work well in long cables that are enclosed because the interaction between the current and the cable casing drives up voltage to unwanted levels. So the system has to be direct-current.

Nearly all the submarine cables use direct current, a form of transmission favored by Thomas Edison but mostly rejected in the late 1800s in favor of alternating current, the kind of electricity now used to run most appliances. But alternating-current lines are hard to bury, because an interaction between the current and the cable casing drives up voltage to unwanted levels.

The cost of putting a cable under water can be lower than burying cables on land, because workers can lay the cables from giant reels, allowing stretches of more than a mile with no splices. But underwater lines are still more expensive than lines on transmission towers. Much of the cost in each case is to transform the electricity to direct current, a form that is easier to use in buried cables.

New technology offered by two European companies, Siemens and ABB, has lowered the cost for some direct current projects, and shrunk the size of the terminals where alternating current is converted to direct current and back, a crucial consideration in urban projects.

One of those companies Siemens, has a plant here in Glasgow, Delaware. Recently, European transmission experts were in town to deliberate.

So the new proposal for an Atlantic Wind Connection is actually about a series of links terminating at substations built on platforms that would sit in the ocean like oil drilling platforms, except, of course, these are clean-energy installations harnessing wind power. They would have to be hurricane-proof and include a spot where a service vessel could moor. Wind farms would tie into the system here.

The cable itself, weighing about 30 pounds a foot, would be lowered into a shallow trench that would be blasted by a device called a jet plow that squirts ocean water into the soil. The cable goes into the trench and is gradually covered over with sediment.

The cable itself is copper, with 1.75 to 2 inches of insulation and multiple shielding layers. It may have a steel outer guard. The outer diameter would be about six inches.

But beyond three miles from shore, no matter where it goes, the cable has a major advantage over cables on land: it faces only one landlord at the outset, the Department of Interior. And the department is sympathetic to wind.

This is a wake up call for Delaware. Governor Markell, Congressman-elect John Carney, Senator-elect Chris Coons, and Senators Ted Kaufman and Tom Carper, all need to get moving on this opportunity now, if only to head off those other states who will be trying to muscle in… These next 24 hours are critical.