In Delaware, Gov. Markell worked to make Democrats the jobs party

3 x 2 jack markell delaware governor
Gov. Jack Markell, who leaves office in January, says he's preparing a tough final budget.

Fifteen U.S. states have AAA credit ratings: they’re so careful with a buck, they can borrow money as cheaply as the U.S. Treasury. (Pennsylvania and New Jersey pay extra.)

Twenty-five states have Republican governors and legislatures. Just six are run by Democrats. (The rest, like Pennsylvania and New Jersey, are split.)

Only one of the AAA states is run by Democrats. That's Delaware, where Gov. Jack Markell, a onetime Nextel and Comcast manager, has spent the last eight years grappling with issues Donald Trump and Bernie Sanders raised in this year's presidential race: the collapse of heavy industry and hometown corporations that used to pay solid family wages.

The DuPont Co., which once employed 1 in 10 Delaware workers, now employs just 1 in 100. The state's sprawling auto, steel, and oil plants closed in the recession.

Markell responded to plant closings, at first, with an aggressive industrial policy, which sometimes worked.

He trimmed state workers' benefits and set up a fund to subsidize employers. His administration paid millions to reopen the oil refinery in Delaware City, and cut corporate taxes to persuade DuPont Co. CEO Edward Breen and his merger partners at Dow Chemical to base two of their three successor companies in Delaware.

The state also lost $20 million on a federally backed, failed scheme to build Fisker electric cars at Wilmington's former GM assembly plant, and forced electric ratepayers to pump more than $100 million into an alternative-energy manufacturing plant at the former Chrysler site in Newark, which has failed to deliver promised jobs.

Like President Obama, Markell steps down in January; he’ll be replaced by former U.S. Rep. John Carney.

Will the state ever replace its lost corporate jobs? I asked. “We already have,” Markell told me, dropping federal labor data into my lap.

Delaware companies now employ 455,000, up from 429,000 on the eve of the 2008-09 recession, and 392,000 at its worst.

That’s the highest post-recession growth in the Northeast, notes Mark Turner, a Republican who heads WSFS Corp., the state’s biggest bank, and the Delaware Business Roundtable, a corporate lobbying group.

“Delaware’s in a great spot. And I give a ton of credit to the governor,” Turner told me.

Don’t get too optimistic, says State Sen. Greg Lavelle, who leads the Republican minority in the state Senate. While he praises Markell’s pro-business efforts, Lavelle warns that between corporate tax cuts and increases in health-care spending, Delaware faces a multimillion-dollar deficit that suggests growth is slowing. Markell says he’s preparing a tough final budget that some of his fellow Democrats won’t like.

Do Delaware’s new jobs replace early-retired DuPont scientists, or are they mostly sweaty positions at places like the giant Amazon warehouse in Middletown?

"This is broad-based," insisted the governor. Cancer drug maker Incyte is hanging iron at its new Wilmington headquarters. JPMorgan Chase & Co. has replaced DuPont as the state’s top business employer, with nearly 10,000 staff .

But Markell says it’s risky waiting for big business alone. Automation and foreign competition have wiped out a lot of manufacturing jobs that aren’t coming back.
What’s still in short supply, Markell says employers too often tell him, are “good people to work for them.”

So the programs Markell says will make the most long-term difference in keeping Delaware in business are education programs, like the three-year-old “Pathways to Prosperity,” which has put 6,000 high school kids in tech-college classes leading to manufacturing, bioscience, and other job-readiness certifications.

The state has forced upgrades to most of its preschools, added Chinese and Spanish public-school “immersion” programs, expanded pre-college testing, and added training for prisoners facing release.

Markell praised Zip Code Academy, the state-backed, corporate-funded program that investor Ben du Pont and marketing guru Jim Stewart helped establish in Wilmington.

He finds hope in start-ups like College Ave. Loans, a fast-growing private lender backed by Comcast and founder Joe DiPaulo’s ex-boss, former Sallie Mae chief Albert Lord.

Does Markell feel regret at cutting taxes and subsidizing profitable out-of-state companies? “I'm not prepared to compete with my arms tied behind my back. I knew where else DuPont could go. I know JPMorgan could expand in Ohio, or in Arizona.”

“What’s Delaware’s next big thing? Lots of little things,” banker Turner told me. “You can’t rely on DuPont forever. We need a growth agenda that focuses on bringing lots of small employers to the state.”

Turner is encouraged that in New Castle County, where most Delaware citizens and businesses are located, and in Wilmington, the state’s biggest town, Markell’s fellow Democrats voted for “moderate Democrats that are pro-business and pro-jobs” when they voted out incumbents in the September primary.

Like Markell in his day, “Mayor Mike Purzycki and County Executive Matt Meyer will be working with the private sector,” Turner said cheerfully. The banker says other states -- and the Trump administration -- would do well to copy Delaware’s example.