The end-of-the-year budget  bill

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Hello everyone,

Earlier this month, this column took note of the nervousness over whether a popular tax break for smaller breweries and distilleries in Delaware and elsewhere would get an extension.

The measure had the support of the vast majority of members of the House and Senate, but anything can happen this time of year.

Over the weekend, President Trump signed a one-year extension of the tax break which has helped to create jobs in Delaware and elsewhere.

The extension was tacked on to a budget bill that avoided a “Santa Claus shutdown” of the Federal government.

The bill includes a pay hike for federal workers and paid parental leave. Delaware was one of the pioneers in moving toward paid parental leave for state employees.

The perk for government workers will put pressure on small and mid-sized businesses to add the benefit that has long been available in most first-world nations.

While the overall bill, which contained items that will aid agriculture and other areas in Delaware, will clearly add to the growing federal deficit, calls for reining in spending are muted these days. After all, the rate of inflation and the unemployment rate remain low.

Speaking of unemployment, the state’s 3.8 percent jobless rate is worth watching. (See below) The rate has been rising by a tenth of a point since summer after falling to as low as 3.2 percent.

At a time when a four percent rate is often viewed as full employment, the uptick is not expected to be much of a political issue unless the figure moves well past that mark.

We’ll get a better feel for the numbers when the normal yearly adjustments are made that use hard data from payrolls rather than a heavy reliance on estimates.

One employment number that could change is total retail employment, which rose this year. That figure comes during a year of store closings. In the past, we saw a decline in retail jobs at a time when stores were opening. The job total was later adjusted upward.

Finally, the budget bill contains some major changes in funding retirement plans. Smaller businesses will have more flexibility in setting up their own plans. One benefit that makes a major change in inherited Individual Retirement Accounts, may come as a shock to some.

As noted earlier, the newsletter will take a break for the holidays until Jan. 2.

We have much to be thankful for as the year winds down. Revenue, website traffic and the number of subscribers to this newsletter rose by double digits in 2019 thanks to the support of readers and advertisers.

Here’s wishing you the happiest of holiday seasons and a prosperous 2020. – Doug and Sharon Rainey.

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