Bill to eliminate possible unapproved school property tax hikes to be introduced in Del.

Property Tax Credit Extention

DOVER, Del. – A bill soon to be introduced in the Delaware General Assembly would eliminate the potential for school property taxes to be raised statewide without a referendum.

Early last year, all three county governments in the state agreed to reassess the value of all residential and commercial properties within their jurisdictions. These actions settled a lawsuit against the counties in which the plaintiffs, Delawareans for Educational Opportunity and the Delaware NAACP, had alleged that an outdated model for valuing property shortchanged students and public schools in the First State.

Delaware state law requires that property tax assessments be based on actual property values. The counties are charged with inspecting properties and adjusting variations, but there is no policy that establishes how often this process must be done, making them reluctant to move ahead on their own initiative. As a result, Sussex County reportedly last assessed property values in 1974, and Kent County in 1987.

We’re told reassessment is supposed to be done in a revenue-neutral fashion, with the tax rates reset so the same approximate total revenue is generated at the end of the process. But, one little-known aspect of the law is that it allows school districts to realize up to a 10% total revenue gain following reassessment.

“The intent of reassessment is to level the playing field and restore equity in property values and the taxes paid by property owners,” said State Rep. Mike Smith (R-Pike Creek Valley), the prime sponsor of a new bill that would eliminate the possibility that reassessment will produce a school revenue bonus. “I have young children and I support getting schools all the funding required to do everything they need to do. At the same time, we have a referendum process in this state, with schools needing citizen approval to raise taxes. The loophole in the current reassessment law essentially allows a significant tax hike to be imposed on Delawareans without their knowledge or consent, subverting the referendum process.”

In Delaware, the county governments collect property taxes for themselves and the public school districts. The majority of the revenue goes to the schools.

Rep. Smith’s bill is expected to be introduced next Thursday, just before lawmakers return to work on May 3rd following the legislature’s Easter Break.

Categories: Delaware, Local News