Delaware’s new Gov. Meyer takes on court reform, port fight, corporate giveaways, and hospital bills

Delaware Gov. Matt Meyer, a Democrat who took office in January, agreed to meet with The Inquirer after his first month to talk about the state’s finances, jobs, and the pressures on the corporate-friendly Chancery Court. Here are highlights, edited for clarity:

The smaller the yard, the bigger the dog. I’m four weeks in. We’re in issues from the port to the corporate franchise to the challenge in relations with the federal government, and trying to build a budget.

The Delaware Prosperity Partnership is a very important marketing arm of the state. It’s got tremendous private sector support. It’s unprecedented in Delaware history that you have private sector partners investing collectively [along with government funds] in Delaware’s future.

I’m a former teacher [and corporate lawyer]. I have not been shy about saying, and studies show, that sizable grants and tax breaks to out-of-state companies aren’t necessarily in the best interest of taxpayers.

I’m all for marketing the things that are best about Delaware and for fixing permitting so it goes really quickly and efficiently and for giving companies the opportunity to expand.

But to keep using it as a mechanism to give away taxpayer dollars when we need resources for our roads, schools, police, affordable housing? We have to be very careful about how we use state money for business going forward.

We are home to DuPont and Incyte and some of the best companies in the world. We will make strategic investments in industries where Delaware is winning — and will continue to win — in biochemistry, financial technologies, agriculture, logistics technologies, where we can attract the best and brightest.

Delaware, for over a century, has been the place where leading corporations make their corporate home. We have been a stable, steady, incorruptible arbiter of corporate disputes. It’s really important to business that there’s a steady, stable bedrock of law, so when there is disagreement between shareholders and management, there’s clarity, consistency, predictably and fairness.

[Corporate fees] are over a third of our state budget. If you take that and [program cuts] in Washington, D.C., and the fact we have to get a budget passed by June 30, it’s really hard. We need to make sure we retain and grow this corporate franchise.

Last year in the media and in politics, that franchise came under attack. On my first day in office, we started meeting with leaders in the corporate bar and around the country who are making key decisions about where companies incorporate. And with C-suite executives and individuals on boards that are concerned about leaving Delaware.

I didn’t talk to Shawe. Mostly I talked to a lot of corporate lawyers. You know, I was a summer associate at Wilson Sonsini [and a mergers lawyer at Simpson Thatcher & Bartlett, and a poverty lawyer at Community Legal Aid].

One firm was talking about setting up a practice group to decide where to incorporate. That’s an alarm for us. They never had to do that.

So we said let’s shore up this corporate franchise. Let’s make sure everyone knows we are serious about clarity, predictability, and fairness.

The first problem [with prior Delaware law] is the controlling-shareholder problem. Tech founders and private equity want to make full use of their status as controlling shareholders.

There’s also a larger group: the big companies that just have concerns about things becoming more hostile to them. The way Delaware won’t randomize judges [a single Chancery judge gets all cases involving a single company]. The federal courts, other states, randomize.

What I was hearing, I felt a little like when I was a sixth-grade math teacher and a student would not go to recess because they knew they’d get in trouble because that proctor didn’t like them. Some of these companies complain a particular judge doesn’t like them.

We now have 2.2 million corporate entities; that’s more than double the number of people that live in the state. We got 81% of the companies that had IPOs last year. Things are not terrible.

I was not involved in the sausage-making. Delaware has prided itself on effectively maintaining the balance between the rights of stockholders and the rights of the board and management. It’s hard. It’s easier said than done. This is an attempt to address that balance.

We have an obligation as the state owning the port to create and grow good union job opportunities. We have the potential to be a leading global port. But we have to watch every dollar.

We need to move as a state toward value-based care models and incentivize the public to use primary care. Sometimes her staff faces a backlog of 100 people in the emergency room. Half didn’t need to be there, if we had a functional health-care system. That’s what we’re moving on.

We want to work with the hospitals, if they’re willing. If not, there’ll be a fight.