Report: State’s permitting process is too lengthy

DOVER — A new report commissioned by a number of pro-business groups says Delaware’s permitting process can be harmful to economic development.

The analysis, conducted by accounting firm KPMG at the request of a handful of business organizations from across the state, is based off interviews with state entities and businesses and reviews of permitting requirements. It concludes Delaware has artificial barriers to entry for many companies.

“Delaware takes at least 18 to 24 months to process a permit assuming no rezoning is required,” it says. “Other states, such as Alabama, Maryland, Pennsylvania, South Carolina, and Tennessee, are doing this in substantially less time.”

That timeline is at the heart of the report: The groups that commissioned it are part of an initiative called Ready in 6, which seeks to reduce red tape and enable businesses to get started in six months.

Delaware can do several things to combat the delay, the findings state, such as promoting more cooperation between agencies and local governments, fast-tracking certain major projects, streamlining the Department of Transportation’s review process, implementing greater use of technology and collecting data to determine how well the state is doing in business growth.

According to the report, a six-month delay for an office building could cause a loss of 60 to 280 jobs and between $6 million and $26 million in employee pay.

Per the analysis, there are several major steps a prospective business must go through before starting. The owner must get approval from the Office of State Planning Coordination, have DelDOT conduct a traffic impact study and present the proposal to the local government, to name a few.

He or she likely will also have to go before at least one of the Department of Natural Resources and Environmental Control, the Department of Health and Social Services and the State Fire Marshal.

The report says greater interagency cooperation, as well as stronger partnerships with counties and municipalities, could make a big difference in speeding up the process.

Another recommendation is the expanded use of Transportation Improvement Districts, areas that “comprehensively coordinate land use and transportation within a specific geographical area and to secure required improvements to transportation facilities within that area,” according to DelDOT’s website. Transportation Improvement Districts currently exist in southern New Castle County and west Middletown, with ones in Dover, southeast Milford, east Middletown and the Rehoboth Beach area under development, per DelDOT.

Greater use of data can allow officials to measure Delaware’s success in reducing unnecessary regulations and speeding up the process, the report recommends.

“Coupled with low taxes, a prime location and a high-quality workforce, a more favorable permitting environment would make it significantly more likely that Delaware would be more competitive as we work to grow, retain and attract businesses to our state,” said Rod Ward, chairman of the Delaware Business Roundtable and co-chairman of the Delaware Prosperity Partnership. “These recommendations should serve as a roadmap for policymakers to develop a more predictable permitting process and a more competitive Delaware.”

The findings also note Delaware’s economy is changing. Gone are the big Cs: chemicals, cars and chickens. In their place, “specialized service sector industries including healthcare and life sciences, tourism, finance and information/technology, and aerospace/aviation” are booming, the analysis says.

A spokesman for Gov. John Carney said the administration has been focused on promoting job growth, pointing to changes in DelDOT’s permitting process, a new fund to help pay for infrastructure improvements that would lead to job growth and a committee created to focus on making government more efficient and accountable.

“This is an issue the Governor takes seriously, and we work hard to make sure that Delaware remains competitive with surrounding states when it comes to attracting good-paying jobs. There is a balance we need to strike to protect Delaware consumers, while strengthening our economy,” Jonathan Starkey wrote in an email.

The groups behind the Ready in 6 effort are the Delaware Business Roundtable, Delaware State Chamber, Kent Economic Partnership, Greater Kent Committee, Sussex County Economic Development Action Team, ACEC Delaware, Delaware Contractors Association, Delaware Chapter of Associated Builders and Contractors, Committee of 100, Central Delaware Chamber, New Castle County Chamber and Home Builders Association of Delaware.

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