Del. Lawmaker wants to stop future house reassessments from increasing property taxes without vote
DELAWARE- A Delaware lawmaker is looking to prevent any increase in property taxes in the state not voted on as part of a school budget referendum.
Currently, Delaware schools are funded 70 percent by a direct budget line from the state legislature, with 30 percent coming from property taxes. However, with court-ordered house value reassessment on the horizon, lawmakers say the higher value of homes could lead to a bump in the property taxes paid.
That increase is capped at 10 percent of what property taxes were the previous year and would be an on-time increase per reassessment.
Delaware House Representative Mike Smith says any increase without a vote would undermine voters’ right to have a say on their property taxes and is introducing legislation to prevent any increase before reassessments get underway.
“The referendum process is a very popular process and gives people a way to say where their money is going, and this gives a way to circumvent that,” he said.
He tells us with inflation on the rise, families in the first state don’t need another increased cost shrinking their budget.
“The reason for the bill was mainly in response to a change in prices and how people are getting squeezed right now but also it takes away from the ability of the voter,” Rep. Smith said.
But Capital School District CFO Ade Kuforiji tells 47ABC, that argument assumes housing values going up, which is not always the case.
“What they are not saying also is that the next property; their value may go down so somebody is undervalued and some are overvalued but from the view of the school district in the aggregate it is not increasing the budget,” he said adding “reassessment is not a revenue source for us, reassessment is revenue neutral.”
Rep Smith tells us, that reassessment across Delaware, looking to reverse years of systemic undervaluing of black communities, could see entire neighborhoods jump in value.
Kuforiji tells us even if that were to happen, the ten percent cap would still severely limit any new revenue from the added home value.
“You can only make the new rate a ten percent increase compared to the previous year which is still a very nominal number,” he said adding that the ten percent bump still only applies to the 30 percent of the total budget accounted for by Delaware’s property tax. That 10 percent increase would only apply to the year following the reassessment and a new referendum process would be the only way to further increase the rate.
He tells us for that reason, he believes if Rep. Smith’s bill were to pass, the district would not see any significant financial difference.
“If that number goes from 10 percent to zero percent I would venture to say I don’t see a significant change,” he said.